We are amidst a digital technology revolution that is taking all industries by storm. Companies can no longer rely on a brand name to ensure growth and customer loyalty. Customers are increasingly adopting a digital lifestyle, and it is imperative that companies proactively prepare for their future in a digital economy. Digital channels now have a significant impact on critical financial and operational metrics. Companies now have to find ways of leveraging their digital channels to prevent themselves from becoming obsolete. This will lead to the retail industry undergoing a major shift in the coming years.
14.1% of all retail sales globally, and is projected to touch 22% in 2023. While it is true that many didn’t have access to physical stores during the pandemic and had to resort to online shopping, it can be said that the e-commerce experiment worked. More than half of the customers (52%) who switched to online shopping reported that they won’t be going back to their old ways anytime soon.
Does this mean that the future of physical stores and malls is bleak? This notion couldn’t be further from the truth. The shopping experience of the future will be one that seamlessly merges the digital and real worlds.
A customer experience includes every interaction a customer has with the business. From navigating the website and interacting with customer service, to receiving the product/service they purchased. Good customer experience promotes customer loyalty. It pays to provide exceptional retail experiences in the long run. It is a well-known fact that gaining a new customer is way more cost-intensive than retaining an existing customer.
With that in mind, let’s explore the three major digital technology trends that will improve the customer experience while shopping online.
- Personalization Using Artificial Intelligence
Customer expectations are evolving. There is a high demand for personalization in products. This is where technologies such as Artificial Intelligence (AI) come in by offering tailored experiences unique to each individual customer. Businesses can exploit data analytics and machine learning to understand their customers’ preferences better and predict their buying habits. This will pave the way for personalized marketing through customized moments across various storefronts and enhanced customer journeys.
Artificial intelligence in e-commerce is based on machine-learning algorithms that use behavioral and transactional data analytics to understand customer needs better. Customers tend to make additional purchases based on their current order to be completely satisfied – a psychological phenomenon called the ‘Diderot Effect.’ E-commerce leverages the capabilities of artificial intelligence and machine learning to recommend suggestions such as ‘similar products’ or ‘customers also bought.’ By analyzing user behavior, click patterns, and shopping history, artificial intelligence, and machine learning can personalize these recommendations for every customer.
Customers are more likely to shop in an online store that remembers customer preferences and provides relevant offers and recommendations. The majority of customers are willing to share their personal data for a personalized shopping experience. It is up to the companies to leverage data analytics and put forth meaningful paths for purchasing. Customers can become frustrated when they are bombarded with too much information or a wide range of products that they’re not really interested in. To avoid such information overload, brands must carefully streamline their e-commerce sites to suit the customer.
- Visualization Using Augmented Reality
Some customers consider the inability to visualize the product in 3D and settling for 2D images or videos as one of the major drawbacks of online shopping. Studies have shown that 51% of customers prefer to get a better look and feel of the product before making an actual purchase. This is where Augmented Reality (AR) and Virtual Reality (VR) can step in to create immersive shopping experiences for the customer.
Augmented reality helps customers visualize how a product would fit in their home without actually visiting a retail outlet, whereas virtual reality lets customers immerse themselves into the experience. To give an example, the customer will be able to visualize himself playing a match on the football pitch, if he wants to purchase a football through virtual reality. The possibilities for this kind of customer experience are simply limitless, and this is something that customers are bound to appreciate.
Many companies have already started using AR to boost customer experience. IKEA has launched an application called ‘Place’ to help clients visualize its products inside their homes as they would in real life.
AR sounds highly promising, given the near-universal permeability of smartphones right now. AR doesn't require special equipment, just an average smartphone with a camera to experience a range of products. These technologies are serving up a plethora of opportunities for the e-commerce industry, and the sooner they can catch on to the trend, the better they will fare.
- Automation Through RPA and CoBots
Robotic Process Automation (RPA) has the potential to transform e-commerce businesses. Functionalities of RPA like product categorization, automatic inventory updating, and workflow, can help save time and improve efficiency. For e-retailers, automation can be leveraged to simplify marketing, billing, customer service, warehouse management, and beyond.
Collaborative robots (CoBots) are another disruptive technology that can do wonders for the future of e-commerce. According to a report by Garden View Research, the global market size for collaborative robots is expected to grow at a CAGR of 44.5% from 2019 to 2025.
The concept is that CoBots assist employees in making their job easier by performing mundane, repetitive tasks while employees focus on other tasks that require human characteristics such as critical thinking, intuition, and individuality. These bots are not just simply cooped up in warehouses. They can be used in storefronts for enhanced customer experience and order fulfillment by delivery bots and drones.
In fact, the global drone market is expected to grow up to $43 billion by 2024, and a major chunk of this will be used owing to the usage of drones in the e-commerce sector. Drones are autonomous, Unmanned Aerial Vehicles (UAVs) that can be used to deliver products quickly as they can avoid the hassles of vehicular traffic. However, there are associated challenges in terms of a lack of proper regulations with regards to drone usage – permissible height, traffic control, and permissible speed, etc. Drone technology is still undergoing trials in countries such as India, Russia, and the USA and is bound to revolutionize the future of e-commerce deliveries.
Time for the Future
The widespread availability of smartphones will bolster the growth of the digital economy and e-commerce platforms. By the law of nature, humans are constantly evolving, and so are our technologies. Robot-assisted personalized shopping, self-checkout based on biometrics, and large-scale drone and bot-based order fulfillment are just a few of the endless possibilities that the future of e-commerce has in store for us. We are at the crux of a gripping digital technology innovation, and the possibilities for the future are abundant and promising.