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Retail Tech Trends: Convergence of Online and Physical Shopping

Writer's picture: Delian PartnersDelian Partners

The progress in digitalization and the development of new technology has completely changed the way people want to shop. To stay competitive, offline retailers are implementing innovative technologies such as Virtual Reality, Augmented Reality, and Artificial Intelligence, to provide customers with a more integrated, digitalized, and interactive shopping experience. And today both online and physical shopping appear attractive to customers.


Recently the big e-commerce giant Amazon opened Amazon Style, its first physical clothing store in Los Angeles. In-store, customers can use their smartphones to scan QR codes on clothes and see more details about sizes, colors, or ratings. Through the Amazon app, they can also send items to one of the fitting rooms avoiding the stress to search for them in the store, and through the touchscreen display, they can search and rate their favorite items or ask for additional sizes, colors, or stiles. And then an Amazon worker will deliver all the items to them. Amazon Style is a perfect example of a hybrid ecosystem that brings the best of shopping online – great selection, prices, and fast delivery – into a physical store, creating an all-digital shopping experience



Many companies are deploying augmented and virtual reality to engage customers with a more personalized experience. Adidas and Ikea through AR technology allow customers to interact with a 3D visual representation of the products. For example, Adidas partnered with Microsoft Kinect to allow customers to virtually try on a full set of clothes through a body scanner at its physical stores or try them virtually at home through the Adidas app. Ikea introduced the “Shop & Go” feature on its app, which allows customers to use their mobile to scan, pay for items and skip the checkout line in the store. Also, thanks to the integration of AR into the Ikea app, customers can see how a piece of furniture might look in their home, and then pick up it from the store.



On the enterprise side, companies are taking advantage of AI technology to create data-driven businesses and optimize operations, reducing costs and increasing personalization. One of the UK's largest grocery chains Morrison’s integrated AI into its processes to analyze a vast amount of customer behavior data using sensors and cameras located in all its stores, enabling the company to reduce shelf gaps, cut inventory and minimize waste.


The retail sector went into a significant disruption from e-commerce competitors adopting AI and ML to process data faster and use them to provide a personalized shopping experience. Traditional retailers understood that investing in technology is critical to staying competitive and unlocking the potential of the in-store shopping experience, optimizing processes, and providing customers with a more immersive and digitalized service. According to Research&Markets, the Global Smart Retail Technology Market is expected to grow from $22.6 billion in 2021 to $68.8 billion by 2026, growing at a CAGR of 24.9% over this period.


 

The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.

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