3 technology trends defining retail: Connecting the dots at NRF

Each year, NRF offers retailers a temperature gauge on the hottest trends and technologies that will impact the retail industry in the months ahead.

This year certainly saw an increased interest in advanced technologies like artificial intelligence (AI), but the majority of conversations centered less around the potential of these technologies and more around how retailers can practically implement them into their stores at scale to improve customer experiences.

Naturally with a broader acceptance of technologies like AI and IoT in the retail community comes an eagerness from retailers to implement these technologies at scale, now. Yet, many retailers flagged complexity and scale issues with trying to glue together a multitude of existing and emerging technologies.

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They voiced interest in solutions that come pre-assembled and out-of-the-box, as bridging the gap between new technologies and existing infrastructure remains one of the key challenges retailers are facing today.

Below, are three trends that will have the biggest impact on the retail industry this year, along with how retailers can combat integration complexities that follow.

1. Artificial intelligence is the new black

AI made its debut on this year’s agenda. Despite what many may think, the real value of AI for retailers will be behind the scenes, rather than through robots or in-store automation.

Connected stores, for example, are generating a wealth of new data behind the scenes on the end-to-end customer journey. To glean patterns and actionable insights from this data, retailers will lean on AI’s capabilities, as the volume of data retailers are amassing is too vast for humans to process.

Additionally, AI will impact every retailer uniquely, depending on their value proposition. For example, high-end fashion retailers might look to build deeper customer relationships, using AI to analyse data in real-time and share personalised style tips with shoppers as they move around the store floor. Budget supermarkets are more likely to focus on driving supply chain efficiency with AI to bring products to their customers at lower prices.

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However, emergent technologies like AI are still fragmented. How do retailers actually plug AI into their local store systems, let alone their global systems? It’s challenging, as it’s not prototype R&D thinking where it can be trialled by a few. It influences core business processes that have a direct impact on the experience for all customers. As such, retailers need to ensure AI is fully integrated within their retail ecosystems, able to ingest data from any information silo via APIs.

By being fully connected to the retailer’s application network—made up of its applications, data and devices—AI can use live data to trigger automated processes that improve customer experiences. The strength of each retailer’s connectivity fabric will be key to making AI a success.

2. It’s a year for IoT maturity

The internet of things (IoT) is moving beyond the hype cycle, as many retailers are turning possibility into reality. They’re sold on the need for digital transformation and the value that IoT, wearables and mobile bring to the shopping experience.

Many large retailers have already launched pilots for these technologies in their flagship stores and have seen their potential. Now, they want to roll these innovations out across their wider store networks and make everything work at scale.

That’s a major challenge given how fragmented these new technologies are. Unless they are fully integrated with legacy systems like ERP applications and AS/400, IoT technology will just function in isolation.

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As a result, a retailer’s ability to use data and insights to drive transformation and connected customer experiences will be limited. At the same time, retailers don’t want to work out how to join up the capabilities provided by five or six different suppliers and fit everything together manually. They just want to plug it in, roll it out at scale and get going.

To work at scale, point-to-point integration simply isn’t an option. Not only would it be incredibly costly, it would also be a logistical nightmare.

Instead, retailers can use an API strategy to plug new IoT technology into their existing application network, where any existing or newly emerging system, application, data source or device can be quickly plugged in and out as market conditions change.

3. The future is about commerce, not e-commerce

Five years from now, retailers won’t talk about e-commerce; it will just be commerce. The entire retail experience, both online and in-store, will be driven by data. This will enable retailers to get a 360-degree view of the customer and offer personalised shopping experiences across every channel. For example, a supermarket could share recipes with customers via a mobile app based on the ingredients they take off the shelf, or suggest other complementary foods to pair with.

The continued trend towards digital self-service is also paving the way for automatic payments as customers walk out of the store, enabling retailers to take tills out of the equation entirely and create more seamless customer journeys.

This might sound futuristic; however, Amazon opened its first Amazon Go! store in Seattle last month pioneering this very model. Once the capability and potential has been proven, it’s only a matter of time before consumers expect these payment-less experiences as a standard.

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However, before they reach omnichannel utopia, retail systems and data must be integrated across the entire ecosystem. Forward-thinking retailer House of Fraser, for example, is tackling this challenge head on by modernising legacy systems and investing in new technologies, such as a new e-commerce platform.

With the goal of driving sales and reducing operational risk, integration has become a critical component of its IT strategy. For all the change that comes with renewing legacy systems and transitioning to new technologies, integration allows House of Fraser to isolate the negative impacts of that change and undertake it in a cost effective and risk effective way.

Integration is becoming more critical than ever for retailers. They need to find a way to connect all the emerging technologies and data sets with their existing infrastructures and global store networks, or they’ll struggle to capitalise on the transformation that is coming. API-led connectivity is emerging as the most attractive solution, offering retailers a simple method for connecting and exposing their digital assets and capabilities on their application network.

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What’s also apparent is that retailers need to go back to the basics in determining what their value is. Before adopting new technology, they need to take a long, hard look at what it means to be a retailer, why people shop with them and what their value proposition is. From there, retailers can then map digital technologies to help optimise both internal processes and digitise experiences for customers to add real benefits.

As that process continues, start to realise that everything seen to date has just been the tip of the iceberg. Self-service kiosks, IoT-enabled stores and everything else that’s visible on the floor at NRF each year are nothing compared to the changes retailers will see as they begin to bring these technologies together and connect the dots.


Sourced by Guy Murphy, industry technology evangelist, MuleSoft

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...