Future of Retail, Part 2: Technology’s Impact
The second part of our three-part blog series on the future of retail gets exciting! We will discuss the myriad ways technology has impacted the industry. If you haven’t yet read part one, you can go back and check out our introduction to this blog series and learn about how we got to where we are today in the retail world.
As we dive into part two, it’s important to note that, like other elements of our society, technology has had both good and bad impacts on the retail industry. Let’s get started!
Technology’s Impact So Far
In part one, we touched on the significance of online shopping and how that changed the game for retailers. While the onset of online shopping and browsing made an enormous impact, it was social media and smartphones that further forced retailers to evolve:
“Customers are equipped with computers in the palm of their hands that are more powerful than computers were a decade ago. YouTube has become a major influence for customers; they get to watch unboxing and reviews of a product they are researching. Today, I see more customers using YouTube and Amazon to research technology vs reading product review publications like Engadget or CNET. These mobile and social channels will continue to play a key role in influencing customers,” said Erich L., a Senior Results Manager at BDS.
One could even argue that mobile technology has helped dissolve the line between online and offline. This infographic, although created in 2014, throws out some interesting statistics regarding the relationship between mobile technology and retailers. It’s safe to say that in 2017, consumers are now even more tied to their mobile devices.
A Pessimistic Outlook
When we asked our retail experts about the impact of technology on retail, some weren’t very optimistic. One of our Market Development Managers, Karina H., stated that, “Technology is easily the #1 factor for wiping out retail. I don’t have to say anymore.”
M.C., one of our Field Operations Managers, commented on the reality that technology has hurt brick-and-mortar retailers and will continue to do so. “The more accessible technology and information is, the less likely people will need to come into a retail space to garner that information,” he said.
It’s true that technology seems to be negatively affecting in-store shopping. Take Black Friday weekend shopping statistics for example; in 2012, 147 million shoppers hit the stores. Since then, that number has only gotten smaller. In 2013 there were 140 million, in 2014 there were 133 million, in 2015 there were 102 million, leading up to this past year, where only 99 million went to the stores in 2016, 10 million less than those who shopped online!
While you can certainly make the case that technology has hurt retail, it’s also helped online retailers. Corporate retailers that have utilized eCommerce, social media channels, and mobile-exclusive promotions, have arguably reached more people and sold more products than they otherwise would have without this technology. The reality is that new technology can hurt traditional retail models, but it can also help those same retailers and brands if they evolve and adapt to the new trends going forward.
Opportunity Lies Ahead
While technology is what caused consumers to avoid going to brick-and-mortar stores, ironically – it could be what causes people to start coming back into those stores! There is significant opportunity going forward with many trends already enabling brick-and-mortar retailers to utilize new technology for the better.
“If retailers can integrate technology at the storefront, customers will more than likely be willing to shop in-store because they can experience a new product in a unique way, and walk away with a tangible product rather than waiting for shipping,” predicted our Account Planner, Jenny M.
Some of those new technologies include beacons, augmented reality, virtual reality, mobile apps, and more. We’ll delve deeper into that in The Future of Retail, Part 3: Where We’re Headed. Stay tuned!