Credit: Ulrich Spaan /// Retail Institute Cologne

Technology Trends Should Be Retail Trends

The extent to which a retailer can satisfy the needs of its customers significantly depends on the technology it utilizes and masters. Consumers have become accustomed to the often highly individualized approach provided by e-commerce, and they expect the same in the brick-and-mortar environment. Technology stands ready to meet the challenge.

Every two years, the EHI Retail Institute conducts a comprehensive study on technology trends in retail. The latest study was conducted in 2021 – in the middle of the pandemic. The results clearly show how the pandemic has affected the investment behavior of retail companies and which trends will be at the forefront in the years to come.

As a direct result of the coronavirus pandemic, many companies are working with even more vigor to perfect their omnichannel strategies in order to provide customers with the much-cited seamless shopping experience. This particular trend received a sustained boost as a result of the weeks-long lockdowns experienced by many industries, and it has impacted the customer experience in a variety of ways. While the term “Click & Collect” was still foreign to many consumers prior to the pandemic, the service has since established itself as an integral part of the shopping process. In addition, individualization and personalization in the area of CRM have become increasingly important in the brick-and-mortar retail segment as a result of the growing digitalization of consumer behavior. Consumers have become accustomed to the often highly individualized approach provided by e-commerce, and they expect the same in the brick-and-mortar environment.

Artificial Intelligence Grows Increasingly Important

The ever-rising flood of data generated by the comprehensive digitalization of all retail business processes has led to AI-based decision-making gaining further importance, especially in the areas of procurement, assortment management, and pricing.  In that context, investments in analytics will be of the utmost importance for decision-makers in the retail sector in the coming years.

Another direct consequence of the COVID-19 pandemic is that many companies are currently stepping up their investments in self-checkout and self-scanning solutions. Touchless payment has become the norm for many consumers over the past two years, just as the use of touchless services via smartphone has become more widespread. As a result, for the first time in the history of the EHI study, autonomous stores rank among the top trends of the next few years. In 2021, for example, numerous new pilot projects were launched by teo, Rewe Pick&Go, Netto, and Edeka 24/7, with more to follow in 2022. Discounters are also carrying out extensive testing of the checkout-free store, most recently at ALDI in London.  That development is particularly noteworthy because investment in autonomous stores did not play a role in the companies’ strategies in the previous years of the study.

The development of electronic shelf labels (ESL) also continues to be an exciting topic. These have become firmly established in numerous retail sectors, and their use will continue to expand in the upcoming years. The announcement made by the major food discounters that they will be pushing ahead with the use of ESLs will further accelerate the momentum of their spread.

EuroCIS, Europe’s leading trade fair for technology and digitalization in retail, took place in Düsseldorf at the end of May. The key issues highlighted at EuroCIS – analytics, payment, connected retail, customer centricity, seamless store – all reflect the findings of the EHI study and are perfectly aligned to provide retailers with a comprehensive range of solutions for the challenges they currently face.

About the Author

Ulrich Spaan is Senior Vice President at the EHI Retail Institute, University of Cologne.

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