2020 was a difficult year for the world and offline retail in particular was hit hard. The COVID-19 pandemic saw the closure of many physical stores, brands disappearing, job losses and the disruption of supply chains affecting deliveries. However, innovation didn’t stop evolving, online retail boomed more quickly than ever before and delivery infrastructure became super sophisticated.
Here are our predictions on the tech trends that will shape retail in 2021.
The hottest trend in POS technology currently is the cloud-based POS. Cloud-based POS systems process and store transaction data online while an on-premise POS system stores data locally on the retailers store server. Cloud POS Market size exceeded USD 1.5 billion in 2019 and is expected to grow at a CAGR of over 27% from 2020 to 2026. Growing adoption of cloud-based payment systems for inventory, employee, sales, and customer management in small businesses will boost the market growth.
So, now is a good time as any to embrace the change. The advantages that a cloud-based POS offers to retailers are;
Easy to Setup: Legacy POS systems (on-premise/locally hosted) require time to set up and get trained on. Not to mention, it needs a trained engineer to help with its maintenance and when there are problems with the system. Cloud-based POS replaces all of that with a single app. Updates will come from the cloud to whatever device you are using. It makes the entire process a lot simpler, making it easier to setup and manage for retailers.
Features & Functionality: Most cloud-based POS have all features that are available in an on-premise POS system and can integrate with the ERP’s that your retail business is already using.
Pricing: Most cloud-based POS systems come with subscription based pricing as opposed to long term or perpetual contracts. The subscription pricing covers licensing, support, updates and hosting charges.
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eCommerce, BOPIS/Click & Collect, and Curbside Pickup have soared in popularity as many shoppers are expected to continue to avoid stores. According to a recent study, in 2020, nearly 41% of customers said they were currently shopping online for things they would normally buy in-store over safety concerns.
Digital commerce allows retailers to integrate sales channels across their enterprise and transform their retail operations into a single unified system. Social commerce, as an extension of digital commerce, allows retailers to integrate social media platforms to their existing sales channels enabling them to offer their shoppers, an even more seamless way to shop online.
Social commerce allows retailers to sell through social media platforms like Facebook, Instagram and Twitter. It differs from social media marketing as users are not redirected to an online store, but offers them the ability to checkout directly within the network they’re using at that moment. With the introduction of Facebook shops, expansion of Snapchat’s native stores for brands, social commerce is quickly gaining ground. Retailers can customise the look of their shops with banners, images and buttons with the ability to add a collection of products.
For 2021, our prediction is that social commerce will become an even more integral part of the digital commerce experience for retailers and shoppers alike.
Customer Loyalty & Mobility
Another key area for retailers to lookout for in 2021 will be customer loyalty and mobility. According to a recent survey by McKinsey, 75% of the consumers have tried a new shopping behaviour in response to COVID-19 with an astonishing 36% trying a different brand. Clearly shopper loyalty is decreasing and that retailers need to focus their energies on ensuring that they develop deep relationships with customers. Access to customer shopping history and their purchase preferences will allow retailers to build personalised incentive programs, enhance customer loyalty and boost repeat sales.
People always have somewhere they need to go. When customers drop by your store and make a purchase, they want to spend as little time as possible there, especially at the checkout line. Mobile POS allows store employees to transact anywhere on the shop floor offering a convenient, fast and safe shopping experience to customers. Recent research suggests that 74% of the customers would opt for safe and contactless checkout at stores in the long term emphasising the importance of Mobile POS for checkout with support for contactless payment options.
Sophisticated Delivery Channels
COVID – 19 has accelerated the rise in BOPIS/Click & Collect/curbside pickup as these allow consumers to shop with little or no contact. According to a recent survey report by McKinsey, 56% of the consumers will continue to use BOPIS in the long term even after the pandemic is over. The last quarter of 2020 saw a rise in adoption of curbside with as many as 80% of the consumers utilising the service according to a report by Bluedot.
An important factor in Delivery 2.0 will be fulfilment; it will be important to have inventory available and retail processes optimised for the fastest possible service especially when shoppers are expecting same or next day delivery. PwC reports that 88% of consumers are willing to pay for same-day or faster delivery. This will have a domino effect that will touch not just consumer-facing retailers but also their supply partners. We’re likely to see curbside/BOPIS/ Click & Collect become the norm and beyond as inventory management and order fulfilment technology and standards evolve in 2021.
Enticing Shopping Experiences Will Grow
The expectations and behaviours of the new generation of customers significantly differ from the previous generations. They enjoy user experiences that are supplemented by Artificial Intelligence (AI) or Augmented Reality (AR). It is extremely important for retailers to produce enticing retail experiences that can take shopping to the next level.
According to a Nielsen global survey from 2019, customers highlighted Augmented and Virtual Reality as the top technologies they’re looking at to assist them in their daily lives, with 51% saying they would be willing to use AR technology to assess products. While so many shoppers continue to rely on online shopping as a result of the pandemic, retailers need to leverage AR technology to bridge the gap between the digital and the physical and deliver the immersive shopping experiences customers need to make their purchase decisions.
What can retailers expect in 2021
2020 had a significant impact on retail. While there were many retailers who got washed away by the tide, there are others who stood tall by accepting, adopting and evolving with the change. The effects of this change will be felt in 2021 as well. The future of retail is changing, and so is the technology that’s powering it and if retailers are to thrive, they should embrace the changing technology now.