Over the past three years – mostly due to the pandemic and geopolitical crisis across the globe – retailers faced supply chain disruptions, inflationary pricing, economic uncertainty, and changing consumer behavior.
The year 2023, however, promises a positive outlook as retailers adjust to a new normal. According to Statista, the global retail market is forecasted to reach over US$32 trillion by 2026, a 14% jump compared to the sales generated in 2022.
The use of technology across various domains with strict focus on refining customer’s shopping journeys has become a top priority for retail executives worldwide. A growing interest in emerging technologies, particularly Artificial Intelligence (AI) and automation, will further advance retail operations.
“The future of retail lies in the convergence of ground truth data, location technology, and AI capabilities. Retailers who embrace this shift will undoubtedly outpace those relying solely on traditional market intelligence methods,” opines Mike Davie, SVP & General Manager, Quadrant – Appen, Singapore.
Majority of retail trends today are technological-driven, specifically omnichannel experience and integration.
Omnichannel Experience
Today, consumers choose to make purchases online and expect to be able to pick-up the items in-store or at the curbside/parking lot of the store. Such seamless experience and hybrid shopping are shaping the future of retail. Effective omnichannel retail allows consumers to move freely between physical and digital storefront, creating a unified, seamless brand experience on any platform, at any time. This not only improves the overall shopping experience, it also helps build a relationship and encourages brand loyalty.
“Retail has been moving online and into omnichannel aggressively for a while, but we observed that the pandemic really kicked these trends into high gear,” says Marc Carolus, SVP, Insights & Analytics, Location Products, Mastercard, Germany.
“Paying online and picking up goods in stores or in parking lots has been strategically important for many retailers and is a great way to warehouse and distribute goods directly to customers using existing logistics and infrastructure. This enabled them to absorb significant new demand very quickly.”
The use of contactless payments and mobile wallets also enables customers to make secure payments using their smartphones. “In this age of digital transactions and payments and customer experience, location and geospatial data provides fundamental information in order to be able to provide services to customers at the right place at the right time in the right manner. And most importantly, in a secure manner,” says Jagdish Narayanan, CIO, Reliance Jio Payments Bank, India.
In this regard, adoption of Cloud native tools is becoming increasingly important.
“Retailers are realizing the benefits of migrating their data to the Cloud such as scalability, adaptability and security. With Cloud-native architecture, retailers can seamlessly scale up during peak sales periods, adapt quickly to changing consumer preferences and more importantly, safely and securely store and access their data,” says Helen McKenzie, Geospatial Advocate, CARTO, UK.
Omnichannel Integration
Omnichannel retail refers to providing a consistent experience to consumers, irrespective of the space they chose to make a purchase – physical store or online. By integrating omnichannel retail platforms, consumers will be able to make use of the store’s physical and digital capability seamlessly, at the same time.
Here’s how geospatial and location play a role in omnichannel integration:
In-Store Pick-up
Many retailers now offer a service called ‘buy-online- pickup-in-store (BOPIS)’ for the convenience of shoppers. This service allows shoppers to pick-up their online purchases at the nearest physical store.
With this option, consumers can save time and avoid shipping charges. Map data is embedded within the retailers’ mobile app to help consumers find the nearest store, along with navigation capability. The application can also be used for product returns.
Wayfinding
Navigating a superstore for a specific item could be a challenge to shoppers. Retailers now provide Store Map feature on their mobile app, which includes unique store layouts, with product location mapped down to the exact aisle and shelf area. Shoppers can use the mobile app to navigate within a physical store or within a large shopping mall. Some shopping malls also use interactive kiosks with indoor map data to assist shoppers to locate retail stores.
Indoor mapping solutions can also be integrated with other location-based services, such as personalized recommendations, promotions and last-mile delivery services, further enhancing the customer experience. “Through indoor maps, retailers can attract and engage customers, drive foot traffic, optimize store layouts and increase sales and customer loyalty,” says Morten Brøgger, CEO, MapsPeople, Denmark.
Cashierless Store
Cashierless store lets consumers enter a physical store, grab what they want, and get going, without stopping to pay at the counter. Their e-wallet accounts will be automatically charged after they exit the store. This omnichannel shopping experience is enabled by Computer Vision, Sensor Fusion, and Deep Learning. Location technology is an essential component in this infrastructure.
The cashierless technology was first introduced and patented by Amazon, known as ‘Just Walk Out’ technology, for its Amazon Go stores. However, today, many retailers such as Tesco, 7-Eleven, Sainsbury’s, Aldi, and Carrefour are testing or using this frictionless technology in their selected stores.
Smart Parking System
Big shopping mall with multi-level parking lots can include a Smart Parking module in its mobile app, where shoppers can reserve and pay for a parking spot in advance. Such smart parking system uses sensors and real-time location data to guide drivers to their reserved parking spot, reducing congestion and enhancing convenience to shoppers.
Mall of the Emirates in Dubai has been offering omnichannel experiences to its shoppers via various digital services accessible in-store, at home, or on a mobile device. This includes a Digital Concierge service and smart parking service via its mobile app.
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Fuad Sharaf, Managing Director, UAE Shopping Malls at Majid Al Futtaim Properties said, “Our pride as a leader in offering innovative omnichannel experiences comes with the humbling need to always place the consumer first, providing convenience, simplicity, and ease wherever they are.”
“As cities become more connected and IoT devices proliferate, location technology plays a vital role in managing urban infrastructure, including parking system,” says Bas Jansen Venneboer, Managing Partner, Local Eyes, The Netherlands.
Apart from the push for omnichannel, key trends such as ubiquitous connectivity, an increase in online shopping, conscious consumers who want to know about product lifecycle, and a more personalized, customized, and immersive consumer experience, are leading to a paradigm shift. Let’s briefly have a look at these:
E-Commerce
By pairing a strong web presence with the latest e-commerce platforms, retailers are able to broaden their offerings, increase reach and remain open 24/7. Forbes estimated the global e-commerce market to reach US$6.3 trillion in 2023, and US$8.1 trillion by 2026.
“Many multi-story shops, big retailers has now online, e-commerce sites for online-shoppers. The long tail is on the way. Small businesses now can easily compete with the big names,” says Alim Küçükpehlivan, CEO, Basarsoft, Turkey.
Personalization
With the advent of AI, Machine Learning (ML), and Deep Learning (DL), retailers are able to analyze consumers’ online and offline behavior, search history, lifestyle, buying patterns, preferences, etc. This allows personalized product suggestions, sizing, and cross-sells of related items unique to the consumer. Hyper-personalization will quickly escalate to the purchase phase with minimal interaction – improving marketing efficiency, boost digital sales, and build long-lasting customer relationships.
Booking.com, for example, provides tailored recommendations to its consumers using millions of accurate Point of Interest (POI) data, combined with insights on consumers’ preferences, optimized with Location Intelligence. This includes providing consumers with information on nearby museums, shopping area, cultural events, etc.
“Geo is more than just providing hotel recommendations. We want to ensure our customers have the best experience throughout their trip,” says Priyanka Sharma, Manager, Location Intelligence, Booking.com, The Netherlands.
Immersive Retail
Simulation-based technologies such as Augmented Reality (AR) and Virtual Reality (VR) are becoming more prevalent in retail, providing innovative ways for consumers to experience products and shop more efficiently.
Immersive shopping experience enables consumers to try on products – beauty, fashion, home furnishing, etc. – virtually, whether they are in the physical store or online store, before making a purchase. This makes shopping experience more enjoyable and help brands to stand out in the marketplace.
Hannah Babineau, Head of Partnerships, The Data Appeal Company, Italy predicts that AR will be increasingly integrated with location technology. “Businesses can leverage AR navigation to guide customers through large spaces like malls or airports, providing real-time directions and personalized recommendations.”
Sustainability
There has been a shift towards eco-conscious consumerism in retail as new generation consumers opt for sustainable products and become more aware of negative environmental consequences.
As a result, many retailers continue to invest in sustainability initiatives such as sustainable packaging, sourcing materials from sustainable and transparent supply chain operations, offering product repair services, organizing product recycling campaigns, and many others.
Akshat Pipersenia, Head – Customer Strategy & Planning, Unilever, The Netherlands agrees “As a company, we have had very strong commitment to sustainability and ESG codes and we have been working closely with governments and partners in terms of developing a multi stakeholder model, which is now adopted by a number of other companies. We have been at the forefront of sustainability movement and it continues to be a big priority for us.”
Even from retail site selection point of view, many retailers are prioritizing energy efficiency and addressing climate risks. These areas receive substantial focus as organizations aim to reduce their environmental impact and promote long-term sustainability.
Location Intelligence plays a crucial role in enriching property information and providing insights into market trends and sustainability metrics based on location.
“By integrating geospatial data, it enables a deeper understanding of properties and their surroundings, empowering professionals to make informed decisions aligned with market trends and sustainability objectives,” says Yanqing Zeng, Lead Data Scientist, JLL, France.
Beth Crane, VP, Data Operations, Dataplor, USA believes that “With the development of AI, ML, and human feedback integration advancements, businesses can expect more advanced, accurate and comprehensive insight into competitor activity, customer behavior, and locations even in very remote areas for strategic decision-making.”
This is the first article in a four-part series on how technology is redefining the world of retail.
