Jan 10 2023

2023 Tech Trends: Retailers Will Make Strides in Stores and Beyond the Web

Edge computing, loss prevention and the metaverse are on the horizon for retail brands this year.
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Since the onset of the pandemic in 2020, retailers have worked hard to create engaging in-person and virtual experiences for consumers by balancing a robust mix of technologies, both online and in stores. And make no mistake: While online shopping has increased since 2020, 51 percent of shoppers prefer in-store shopping, according to a recent report by Vericast.

Moving into 2023, with a lot of hype surrounding artificial intelligence and immersive technologies, experts say retailers must choose wisely where to invest in order to curate the optimum retail experience — wherever consumers prefer to shop — to gain and retain customer loyalty.

According to IDC research on worldwide retail predictions for 2023, “the companies that are thriving are continuing to spend more year over year on technology, with extremely specific objectives,” including “improving the profitability of digital fulfillment and omni-channel operational complexity.”

Investments in edge computing, loss prevention and immersive technologies like the metaverse are on the horizon for many retailers. Brands will continue to see growth in their digital reach along with serving customers at brick-and-mortar shops. Here’s what retailers need to know about these burgeoning trends.

EXPLORE: How retailers are enhancing the customer experience with frictionless checkout.

Create a Firm Foundation for Edge Computing

In response to the pandemic, consumers have become more accustomed to interactive ways of shopping that use data to create more personal experiences. To meet the need, many brands are turning to edge computing, which involves the deployment of smaller server technologies in “edge” locations, such as stores.

Data collected there can be quickly transferred to a data center or analyzed on the spot to allow retailers to quickly create highly personalized services; for example, personal shopping assistants or recommendations for consumers based on the store environment.

Nearly 40 percent of retail IT has already been deployed using edge computing, and 77 percent of retailers are planning to increase edge computing technologies over the next two years. However, it’s vital that retailers have modern IT infrastructure to successfully operate on the edge, according to an S&P Global Marketing Intelligence report.

“To deliver those mission-critical use cases, retailers need to modernize their IT to support an intelligent and data-driven edge — IT infrastructure deployed in or close to store venues where consumers live, work and shop,” the S&P report notes.

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Boost Support for Cybersecurity and Loss Prevention

Loss prevention is also becoming more sophisticated as cybersecurity issues grow. As more retailers use self-checkout technology, the need to increase computer vision for brick-and-mortar operations will be paramount in 2023.

For example, enhanced video surveillance (EVS) cameras powered by AI can help reduce theft by alerting store managers to a person acting suspiciously based on patterns of behavior common to shoplifters. Indeed, says McKinsey, the use of AI-assisted cameras, robots, scanners and other in-store technologies can be a smarter way to scale as labor costs increase and staff shortages continue.

When it comes to theft, EVS may be the best response given long-term staffing shortages, McKinsey states: “At the same time, visual analytics, specifically AI and camera vision, can help address nagging issues such as shrinkage (loss of inventory through errors and theft) and help retailers use the analysis of visual data to improve process efficiency.”

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Invest in Immersive Experiences, but Avoid the Metaverse for Now

There is a great deal of noise surrounding the metaverse, as the immersive, virtual environment promises fuller sensory capabilities than normal web-based platforms. Many brands, such as Nikeland, have created immersive metaverse experiences that are free for consumers.

Meanwhile, 95 percent of business leaders project that the metaverse will have a positive impact on business in the next decade, according to McKinsey. And although 56 percent of adults in the U.S. have heard of the metaverse, only 8 percent have actually used it, according to KPMG, so for now brands are testing out different concepts there.

LEARN: Why retailers are turning to AI to make supply chains more efficient.

According to analysis by Forrester, the metaverse needs a “Pokémon Go moment” to drive consumer engagement. As retailers experiment in the metaverse, the analyst recommends they repurpose multimedia and interactive content used on other platforms while they wait for more consumers to join in. Insights gained from the metaverse today can lay the foundation for further investments, according to an analysis on the future of retail by Deloitte.

“Data collected in the metaverse will enable a self-sustaining loop that utilizes customer data to then improve the customer experience for those organizations that can act on new insights,” the Deloitte article states. “Those insights can inform greater personalization at more traditional touch points.”

Illustration by LJ Davids

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