The retail industry is transforming through a period of unprecedented change. Emerging technologies such as Artificial intelligence (AI) and automation technologies have vastly altered every stage of the retail journey, from inventory management to customer service. Retailers are also integrating data analytics into every touchpoint of their business, including sales predictions, store optimization and product recommendations.
The ability of actors in retail to effectively use AI, data analytics and other emerging technologies to meet changing customer expectations will be a key determinant of becoming a winner in the new decade. These technologies will also dramatically impact operational activities, such as workforce management, inventory and sustainability efforts.
Robert Hetu, a research vice president with the Gartner retail industry services team, has gathered his thoughts around how emerging technologies will shape the future of retail. Optilon has summarized the most important trends from Hetu’s thoughts.
Combining AI with a modern approach for demand forecasting, creating tailored market assortments and optimizing safety stocks will affect how much capital companies are tying in safety stock. A potential inventory reduction of 20% was already displayed in a recent report from Optilon.
While Gen Z and Millennials are more prone to sustainable practices, all generations are now a priority for sustainable consumption. Recommerce, meaning selling of previously owned products, is quickly growing in popularity. The secondhand apparel global market value reached $24 billion in 2018, with projections to achieve $51 billion by 2023.
“Generation AI”, born after 2010 and that has always been influenced by AI, will start spending their money in the next decade. This generation will rely on technology to preselect the best offerings for them taking prices, ratings and product specifications into account. Retailers that will not be able to leverage prescriptive product recommendations will lose existing customers and won’t be able to attract new customers. This is due to lacking ability to stay relevant and influence their customers.