In the fast-paced world of retail, technology continues to be a game-changer, driving innovations that enhance the shopping experience and streamline operations. But with a staggering $263 billion expected to be spent on retail technology by 2027, it’s important to know which investments are truly improving customer experience.
Our recent report, based on the views of 100,000 consumers, sheds light on the tech that’s hitting the mark and what’s falling short.
Download our 2024 Retail Technology Report below.
The consumer perspective: what matters most?
When it comes to improving the shopping experience, consumers have spoken: simplicity and speed are paramount. But it’s important to remember that these concepts can vary greatly among different shoppers. Let’s dive into some of the most impactful areas.
1. Payment options: speed and ease
One of the standout findings is the consumer demand for faster and more efficient payment options. But here’s the twist: what one shopper considers “fast and easy” can be entirely different for another. For instance, while self-checkout is a breeze for some, others find it confusing and prefer the traditional cashier method.
Key insight: Retailers must offer a range of payment options to cater to diverse preferences. In grocery and apparel, over half of the customers still prefer cashier-assisted checkouts.
2. Right products at the right time
Inventory management remains a critical challenge. Despite significant investments in predictive analytics and AI-powered tech, about 15% of grocery shoppers still can’t find all the items they need. This persistent issue suggests that external factors like climate change and geopolitical disruptions are counteracting the benefits of advanced inventory systems.
Key insight: Continued investment in inventory management is essential, but retailers must also develop strategies to mitigate external disruptions.
3. The promise of retail apps
Retail apps are often touted as the future of omnichannel shopping, offering everything from augmented reality to personalized offers. However, consumers have a more straightforward need: help navigating the store and finding products.
Key insight: Retailers should focus on developing apps with practical features that enhance in-store navigation, rather than overloading them with advanced functionalities that consumers may not find useful.
Retail technology investments: what’s worth the $?
Our report breaks down some of the major technology investments happening right now, to understand the ROI of every dollar spent. Here’s a glimpse at the findings…
1. Self-checkout: a mixed bag
Self-checkout kiosks, costing around $30,000 each, are a polarizing topic. While 70% of consumers appreciate their presence, the majority still prefer traditional checkouts in certain sectors like apparel and grocery.
Verdict: Worth it, primarily for easing pressure on manned tills, though not a one-size-fits-all solution.
2. Sustainability: a growing priority
Sustainability is more than just a buzzword. With 73% of C-suite executives increasing their investment in this area, it’s clear that retailers are betting on green practices to build trust and credibility. And consumers are responding positively, with 67% indicating they prefer shopping at stores that focus on sustainability.
Verdict: Worth it, as sustainability becomes a key factor in consumer choice, even amid rising living costs.
3. Inventory management: steady but stagnant
Despite a robust market size of $2.13 billion in 2023, the impact of inventory management systems seems to be neutralized by external factors. The percentage of consumers unable to find what they need has barely changed over the past two years.
Verdict: Worth it, considering the complex challenges, but there’s room for improvement.
4. Chatbots: the jury’s out
With global spending on chatbots projected to reach $72 billion by 2028, there’s significant interest in AI-powered customer service. However, 72% of consumers report that chatbots fail to answer most of their questions.
Verdict: Mixed. As technology improves, chatbots could become more effective, but for now, they remain a supplementary tool rather than a primary solution.
4. Retail apps: underutilized potential
Retail apps represent a significant investment, often exceeding $1 million for major retailers. Yet, only 28% of consumers use these apps in-store, and their primary desire is for assistance in finding items.
Verdict: Worth it, but apps should focus on basic functionalities that directly improve the shopping experience.
5. Personalization: overemphasized?
While 79% of retailers invest heavily in personalization tools, consumer response is tepid. Only half find personalized offers relevant, and just 27% consider real-time offers the most useful app feature.
Verdict: Potentially overemphasized. Retailers need to reassess the effectiveness of their personalization strategies.
Aligning investment with consumer needs
Our report underscores a crucial point: the success of retail technology hinges on its ability to meet consumer needs without overcomplicating the shopping experience. Retailers must balance innovation with practicality, ensuring their tech investments genuinely enhance customer journeys.
To uncover the detailed analysis and comprehensive insights, download the full report below or learn more about our retail experience platform and how you can measure what your customers really think about your technology.
