08 - 09
May 2024

Which technologies will fuel the next wave of growth in retail?

AI, IoT, Robotics, AR, VR, and Computer vision sensor fusion to play a key role as per a report by RAI & Deloitte

New Delhi: Technologies like AI, its offspring generative AI, IoT, robotics and advanced analytics would emerge as the next catalyst that would fuel the next wave of growth in the retail industry as per an industry report.

By the end of 2025, around 20% of global retailers will use distributed AI (DAI) systems for revolutionising sales, marketing, supply chain and operations, according to a report titled ‘Future of Retail: Profitable Growth through Technology and AI’ by industry body Retailers Association of India (RAI) and professional services network company Deloitte said.

DAI is a type of artificial intelligence that is designed to mimic the decision-making process of humans. DAI systems can learn from experience and make decisions based on data, rather than being explicitly programmed to do so.

Furthermore, 45% of marketing leaders from the sector aim to invest in GenAI in the next 12-24 months.

“The next wave of growth in retail will be fueled by the integration of offline and online channels, facilitated by technology solutions, and workforce. This evolution towards a hybrid model, known as O+O (Offline plus Online) business, is already underway, with 90% of retail businesses still generating over half of their sales offline,” said Sumit Singh, CEO, DashLoc, a New Delhi-based marketing services that helps boost local businesses.

AI has transformed from being a mere tool to becoming the bedrock of profitable growth for India’s retail business, the report adds. The digital revolution has therefore transformed retail into phygital or omnichannel experiences, disrupting traditional models where brands are using technology to enhance customer experiences and garner greater ROI.

“These innovations are not just trends; they are the building blocks for future-proofing our retail industry,” said Kumar Rajagopalan, CEO, RAI speaking about AI and IoT.

The RAI CEO in an earlier interaction with Indiaretailing has pointed out that the retailers are now embracing AI not just as a tool, but as a core component of their business strategy. The ability of AI to process and analyse vast datasets provides retailers with unprecedented insights into consumer behaviour. These insights enable retailers to develop highly targeted strategies.

Speaking about AI in retail, Anand Ramanathan, Consumer Products and Retail Sector Leader, Deloitte India, said, “AI is revolutionising retail, offering personalised recommendations and solutions, with 71% of consumers expecting tailored experiences. This signals a move towards experiential engagement beyond mere transactions across consumer touchpoints. By focusing on enhancing operational efficiency, improving customer experiences, and making informed decisions, retailers can secure a competitive advantage.”

Speaking about the technologies that significantly impact customer experience, Narinder Mahajan, CEO and Co-founder, ODN Digital, a services company identified technologies like computer vision, sensor fusion, and deep learning.

“AI, AR and VR will take e-commerce and evolve the product experience for consumers many folds with other benefits like personalised shopping experience, pricing strategies and efficient supply chain management,” Mahajan added.

Let’s look at the key trends leading to emerging retail technologies

Personalized shopping experiences: Retailers use AI and data analysis to tailor product recommendations and marketing messages to individual customers.

Supply chain optimization: IoT and AI are used to track inventory in real-time and predict demand, helping retailers reduce costs and respond quickly to market changes.

Automation: Robotics technology is used for tasks like inventory management and cleaning, improving operational efficiency and reducing labour costs.

Omnichannel integration: AI and IoT technologies are used to create seamless shopping experiences across online and offline channels.

Data-driven decision-making: Advanced analytics and AI help retailers make informed decisions by analysing customer behaviour and market trends.

Enhanced security: AI and advanced analytics are used for security and fraud detection, protecting profits and enhancing customer trust.

Subscription-based services: Retailers offer personalized subscription boxes to foster customer loyalty and generate steady revenue streams.

Retail-as-a-Service (RaaS): Retailers allow small brands to use their retail infrastructure, creating new revenue streams.

Experience-focused retail: Retailers transform spaces into experience hubs, offering workshops and community events to enhance engagement and brand loyalty.

Community-focused retail: Retailers connect customers with shared interests and local vendors, creating a sense of community and enhancing brand loyalty.

More insightful and stimulating conversations on technology trends in retail are expected at the Phygital Retail Convention (PRC) 2024.