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Smart retail involves using data and analytics to give shoppers a better shopping experience
People are increasingly heading back into brick and mortar businesses now that the pandemic is finally over, but they aren't very happy about it: even before COVID, people were dissatisfied with the experience of buying things in-store, a 2019 survey of shoppers found that 80% said they feel they’re not receiving a personalized shopping experience.
One way to give people that kind of experience is through so-called smart retail, which combines traditional shopping with and modern “smart” technology, using big data analytics and technologies like the internet of things, AI, VR, and AR to give the customer a better shopping experience. This mix of online and offline shopping is what IBM refers to as hybrid shopping, and it is now the primary buying method for 27% of all consumers and 36% of Gen Zers.
The smart retail space has been growing quickly and it's about to get much bigger, according to a research study from Prophecy Market Insights, which found that the smart retail market will grow 10x from 2020, when it was valued at $21.4 billion, to 2030, when it is expected to valued at $211.25 billion. That is a compound annual growth rate (CAGR) of 26.0%.
The report specifically looks at the Asia Pacific (APAC) region as one that "is expected to have favorable growth in the smart retail market in the coming years."
Some of the trends driving this include a growing retail industry due to rising urbanization, increasing disposable income, and changing consumer preferences; a growing e-commerce market, with countries such as China, India, and Indonesia experiencing significant growth in online sales; and more technology investment, as the APAC region is home to many technology hubs such as China, South Korea, and Japan.
Finally, the report points to supportive government policies for the adoption of smart retail solutions by providing incentives to retailers and investing in infrastructure development. That includes the Chinese government's "New Retail" initiative, which aims to integrate online and offline retail channels and promote the use of smart retail technologies.
Players in the space
There are a number of startups in this space taking advantage of these trends, including RetailNext, a company that collects and analyzes shopper behavior data in real-time; True Fit, a digital fitting room solution that uses AI to gives shoppers the right size in apparel and footwear; CARTO, a Location Intelligence platform that allows organizations to use spatial data and analysis for more efficient delivery routes and strategic store placements; Standard AI, an autonomous checkout solution; and Stylumia, a company using AI for fashion trend forecasting.
Of course, many of the big players have also entered the space as well. For example, Intel partnered with ARENA15 in 2020, an immersive retail and entertainment complex, in January 2020 as a way to make it easier for customers to buy things by using Intel's technology and solutions. The company also partnered with Sensormatic Solutions, to powering Sensormatic IQ, its intelligent operating platform for retail.
Meanwhile, stores like the Home Depot and Pandora are using IBM technologies to create personalized shopping experiences, both online and in-store, and Google Cloud for Retail
allows retailers easily leverage AI throughout their organizations and gain real-time insights from their data.
(Image source: inoxoft.com)
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