As retailers consider the comeback, personalisation and artificial intelligence are likely to be two key tech strategies they use, according to a recent US survey.
Released in March this year, the 2020 Retail Technology Report found retailers continue to invest in technology, with solutions that establish personalised relationships with consumers an area of increasing focus.
Meanwhile, artificial intelligence is an emerging area which is piquing greater interest.
Here’s a quick rundown of how retailers currently invest in technology and where their future focus looks set to lie.
Technology a significant investment
Evolving and ever-improving, technology continues to be a significant investment for the majority of retailers with back of house software traditionally attracting the greatest spend.
The survey found most retailers direct the bulk of their technology investment into strategies such as inventory management along with order fulfilment and management.
“The technologies that retailers are currently using (and spending on) reflect the omnichannel nature of today’s retail businesses,” the report reflected.
“Systems that can help retailers track inventory and fulfill orders across multiple channels are becoming more critical as consumers engage with brands across a variety of touchpoints, often in a single purchase journey.”
Meanwhile, they note bricks and mortar often harnesses this technology to employ strategic tools like buy online pickup instore (BOPIS) in a bid to improve the customer experience and their omnichannel offering.
This year however, more and more retailers are looking to establish a more personal relationship with their consumer, with the marketing department most likely to attract a budget increase.
Tech investment to continue
Over the coming months, investment into retail technology will remain a priority for most retailers, the report found, with two-thirds indicating they will increase their technology expenditure in the 12 months ahead.
Within these organisations, marketing departments are the most likely to see an increase in their technology budget, with a quarter of retailers directing extra funds there.
Meanwhile, 17 per cent of retailers will increase their spend on technology for digital, and 11 per cent will direct extra funds to product development.
Eight per cent of retailers will boost their technology spend on both customer service and the supply chain, seven per cent will increase spending on their omnichannel offering, six per cent will spend money on technology for merchandising, four per cent will increase tech spending in stores, and one per cent will increase their tech budget for human resources.
Retail – it’s personal
The biggest priority for stores adopting technology is establishing personal relationships with consumers.
In fact, the top five areas where retailers are opting to increase their spend in the year ahead by and large relate to personalisation.
“Leveraging data and technology to create one-to-one relationships with customers is a top priority for retailers,” the report stated.
“Nearly half of all respondents (48 per cent) identified marketing automation as a technology that they will be increasing spending on in the next 12 months, the top choice among a laundry list of other options.
“Furthermore, personalisation technology (43 per cent) and CRM platforms (33 per cent) were also among the top five for spending increases, reflecting retailers desire to use data and tech to better engage with customers and prospects.”
AI an area of interest
Many industry experts have long tipped the emergence of AI as a major tool for retailers. This year the 2020 Retail Technology Report” reflects that trend.
“Retailers have adopted, or are planning to adopt, artificial intelligence (AI) at a much higher rate than other emerging technologies,” the survey found.
“When asked to choose the emerging technologies that they’re not currently investing in but plan to do so within the next 12 months, 18 per cent of respondents selected AI, the highest of any technology listed.
“Furthermore, nearly one-third of respondents (32 percent) identified AI as the emerging technology that they believe will have the biggest impact on the retail industry within the next 12 months.”
So where will this AI play out? Well, predominately in marketing and enhanced customer relationships. Australia has traditionally been ahead of the curve when it comes to AI adoption, particularly when it comes to AI-driven marketing through initiatives like chatbots.
As the Australian Retailers Association explains: “AI helps companies effectively process and analyse the vast amounts of data that they gather to provide actionable recommendations for the business and its customer service team, to enhance interactions.
“For example, if a company can identify that a customer is continually abandoning an experience at a particular part of the journey or if a high percentage of customers seem to be asking the same questions over and over, they can quickly fix issues and optimise around gaps of information more effectively than ever before.”
The full 2020 Retail Technology Report is available at Total Retail.