It is incredibly important for corporations to conduct regular innovation activities: develop new ideas and technologies, test and implement them within their business model, constantly optimize these activities and increase their efficiency. Without all this, the corporation runs the risk of losing its position in the market, losing even loyal customers and, as a result, being out of business.More
Mobile devices as a growth point
As the shopper experience evolves and becomes even more personalized, retailers need to focus on rethinking the shopping experience, embracing mobile devices as the new leading selling point, and creating an engaging and user-friendly virtual store environment for online shopping, enhancing their digital experience: free and fast delivery and returns, clear and detailed product descriptions and images, and fast loading of site pages. To prepare for the demand for online shopping, retailers need to reallocate inventory between offline and online units or experiment with dark stores.
Investments in RetailTech in 2020
The volume of investments and transactions in the field of RetailTech (without division into categories) continues to decline: compared to 2019, funding decreased by about 5%, and the volume of transactions by about 8%. At the same time, investors showed the greatest interest in startups in the field of e-commerce. This area demonstrated most unicorns in the second half of 2020.
- Investments in Retail In-store technology projects (solutions applied in offline stores to improve the shopping experience or business processes) in the second half of 2020 increased by 152% compared to the first half of 2020 (up to $ 2.6 billion). The trend of funding In-Store technologies is likely to continue in 2021.
- Investments in e-commerce solutions increased in the second half of 2020 by 68% to $ 10.9 billion compared to the first half of 2020.
- Investment in Loyalty & Rewards solutions declined in the second half of 2020: while the number of transactions in the second half increased by 48%, funding fell by 26% compared to the first half of 2020. Retailers are investing in digital reward programs and adding new perks to attract customers who shop more online.
- Investment in Supply Chain & Logistics increased in the second half of 2020, with deal volume down 44% from the first half of 2020, but funding for supply chain and logistics technology companies increased by 15% to $ 6.3 billion.
- Investment in Meal & Grocery Delivery remained virtually unchanged in the second half of 2020: USD 4.4 billion. At the same time, the number of transactions decreased by 28%.
Forecast for automation, delivery optimization and sustainability
Store automation (Retail in Store) remains in the spotlight. The trend of increasing the number of SCOs continues to strengthen. Retail outlets without employees and cashiers are predicted to become more common.
Meanwhile, retailers are increasingly focusing on free shipping and fast order pick-up as a competitive advantage. Due to the increase in online sales of products, special attention is paid to logistics solutions for chilled and frozen products. There is also a hyperlocality trend in the field of food delivery.
It is also worth noting the predicted focus on machine learning (ML) in demand planning. About 42% of US retail executives noted that forecasting demand is the biggest challenge they need to solve, and 46% of them want reliable technology (according to a survey by Coresight Research).
The authors of the research predict the active introduction of autonomous robots to deliver the last mile. As robotic technology advances, more robots and drones are expected to be used. This is evidenced by the fact that both startups and large retailers are developing innovative solutions for autonomous delivery of the last mile.
It’s safe to say that caring for the environment will remain a key priority for retailers as consumers continue to focus on this topic. According to the global non-profit organization BSR, 93% of consumers around the world pay attention to sustainability criteria when choosing a brand, and three out of four teens want to buy more environmentally friendly products. Many retailers are already working on environmental initiatives. To reduce waste, some companies have launched recycling and reuse initiatives.
Unicorns-2020 at RetailTech – who are they?
More than one third of the new unicorns are retail and e-commerce solutions (Mollie, dLocal, Mirakl, Forter). Among them, online grocery stores (GoPuff, Gousto) and pharmacies (Ro Pharmacy, Pharmapacks) stand out. However, each of the new food unicorns has its own unique business model. The new health unicorns are also diverse in their technologies and business models. It’s worth noting that several unicorns have emerged in the personalization and fashion industries.
To prepare this article, the following research works were used:
- The State of Retail Tech H2’2020 by CB-Insights
- Understanding Consumer Behavior in the New Next 2020 by Oracle Retail
- Retail reimagined: The new era for customer experience by Periscope by McKinsey
- Retail 2020: 10 Retail-Tech Startup Trends by Coresight Research
- 2021 retail industry outlook: The new rules of retail by Deloitte