8 Retail 4.0 Trends Driving the Industry

The transformational shift in how and where consumers shop has been causing major disruption for an age-old industry. Retail, a critical channel for electronics OEMs, is changing faster than ever and with it will come new challenges and opportunities for consumers and brands alike. The good news? Traditional retail will survive, but in a new reality known as Retail 4.0.

In October 2017, at the Get Smart Summit, industry professionals explored how brands can utilize trends to connect with the next generation of consumers. Eight trends are emerging as critical to making Retail 4.0 a reality and helping retail thrive in this new environment:  

The polarization of retail

Retail will become highly convenient and experiential. The discount and luxury sectors are booming, outpacing the whole retail industry, and those caught between value and high-end will find it increasingly difficult to compete and grow, and in some cases even survive.

High-profile department stores such as Macy's and Sears have closed numerous locations. And with constant news of declining retail sales and bankruptcies, you wouldn't be remiss to assume that there is a retail apocalypse occurring. However, all is not what it seems. Not only is retail surviving, but by some accounts, it's flourishing. In fact, a report from the IHL Group found that U.S. retailers are opening 4,080 more stores in 2017 than they are closing.

Major growth expected for virtual assistants

Although mass adoption is still out of reach, use of voice activated assistants is on the rise. According to a report from eMarketer, 35.6 million Americans will use a voice-activated assistant device at least once a month in 2017, up 128.9% over last year.

Photo courtesy: Amazon

Photo courtesy: Amazon


These impressive statistics help illustrate how retail is changing into a more convenient experience with the help of Artificial Intelligence (AI). As AI becomes as ubiquitous as the smartphone did a decade ago, retailers must work with third parties like Alexa, Google Home and Siri, to stay in the game. 

Walmart, for example, recently partnered with Google to offer hundreds of thousands of items through voice shopping by using Google Assistant. This increased level of automation will raise the bar for brands to encourage consumers to break habits and switch products based on voice-activated preferences. 

AI reshapes the customer journey

As we get used to talking to Alexa or Siri at home, we want to take that experience with us in the car and to the mall. This past summer, Macy's launched a new mobile app that uses AI to help customers navigate through the store. 

Powered by IBM Watson, the tool enables shoppers to answer questions for themselves so sales associates are free to handle more complex requests. It aims to help empower the customer while boosting declining sales.

It is likely AI will be able to tell consumers where the best deals are too, so automatic price-matching will become part of the future retail reality. AI will go so much farther than just in-store or online. It will take data delivered from the sector and drive product development and even Retail 4.0 innovation based on its learnings. 

New packaging strategies will foster loyalty

The path to purchase is complex and changing fast, whether it is online, mobile or in-store. The first and second moments of truth (selection and delivery respectively) need to be integrated. Packaging plays an important role in that integration, whether that be sustainable packaging, smart packaging that enables replenishment, or just packaging that delivers a great brand experience and ensures the product arrives in perfect condition. 

One company that’s leading the way in this space is Amazon. In the holiday season of 2017, it celebrated 10 years of frustration free packaging, an initiative to delight customers by shipping products in easy-to-open boxes that use less excess materials and are 100% recyclable.

Photo courtesy: Amazon

Photo courtesy: Amazon

“Amazon works with manufacturers worldwide, helping them re-think and re-build their packaging, reducing waste throughout the supply chain while ensuring products are delivered to the customer undamaged,” the company said in a recent press release. All those factors have helped the company delight millions of customers and lock in their loyalty. Alas, while progress is being made on this front, there is far more needed to accommodate the new realities of the digital shelf through packaging innovations aligned to ensuring delivery of break-proof, leak-proof products for deep and wide eCommerce adoption and auto-replenishment for automating brand loyalty.

Virtual reality: The new dressing room

Retailers are increasingly exploring the virtual shopping experience and the use of mixed reality in-store. One exciting application is the virtual mirror, where shoppers can scroll through outfits and see them on their reflections without actually putting the dress or top over their heads.

Virtual dressing rooms are already in use at retailers such as GAP. At the beginning of the year, the company launched the “Dressing Room” app, which uses a virtual 3D model to enable customers to see how a piece of clothing would fit based on information such as height and weight. By utilizing augmented reality, the app lets customers try on clothes virtually and order them right from the app. 

Convenience through click & pickup

Retailers are not just about product selection anymore, they’re also becoming our destination for click-and-collect shopping, a concept in which consumers purchase an item online and then go to a retail store to pick it up. A report by IRI expects click-and-collect shopping to total $6.6 billion by 2020.

Retailers see this as another way to get people into the store, and for consumers living in increasingly urban locations, the convenience and theft-free option is a great one. The service also allows retailers to take advantage of cross-selling opportunities. The report found that 69% of shoppers who visited a store to collect their order ended up making an additional impulse purchase.

Changing the retail environment

Many of us already see coffee shops as our “third place” after home and office. Retailers of the future will need to find new ways to bring people together and bring them into the brick and mortar locations where retail lives. Co-working spaces will become a part of that future.

Office supply store, Staples, recently partnered with Workbar, a co-working company, to launch spaces in three of their locations. Complete with a happy hour and retro music, the spaces have already had more than 200 people sign up for the $130 per month memberships. This new business model helps shed light on how retail stores will survive moving forward.

Photo courtesy: Workbar

Photo courtesy: Workbar

Lines & cashiers become obsolete

Perhaps, best of all the trends we heard about was the push to eliminate the queue. Pundits say purchasing will no longer require a line for checkout. Instead, consumers will be able to check out purchases on a mobile device or though some AI-based service that drives convenience and immediate gratification.

Once again, Amazon has taken the lead with this new breed of retail stores. Amazon employees have been testing the Amazon Go concept for the past year, which enables shoppers to walk into the store, grab a product and walk out without waiting in line to pay a cashier. Instead, the purchase would be automatically charged to their Amazon account by utilizing sensors, cameras and other technologies. The concept further highlights how retail is changing and the necessary steps companies are taking to ensure that retail will survive. And now, after working out some technical bugs, the mega retailer is almost ready to launch the store to the public, according to Bloomberg. 

The retailer of the future has a great deal to offer consumers in the new ecosystem. As more retail 4.0 technologies are adopted, and tech savvy players rise to the top, the shopping experience will morph into a seamless aspect of our everyday life. Technology online, in-store and in smart packaging has a massive role to play in the evolution of the way we live our lives as consumers. With more disruption ahead, it will be up to brands and retailers to embrace the new Retail 4.0 reality.

Let us know in the comments section below how you think these trends will impact your business in teh comments section below. 

3 comments on “8 Retail 4.0 Trends Driving the Industry

  1. cuteraj
    December 17, 2017

    Awesome post as usual.

  2. EdwardThirlwall
    October 16, 2018

    At this moment, I sincerely doubt that there would be any merit opening up a retail store, but I think that it makes sense to create opportunities for your business to showcase its products if you deal with physical items. People being people are going to want to see and touch your wares at some point. Not everyone will be so trusting as to purchase something online without any sort of verification of its standard and quality.

  3. markgrogan
    February 21, 2019

    The climate of shopping is changing, but I reckon that there will be a long while yet before there is a visible preference of one over the other. There are still plenty of people around who will prefer doing things in person in stead of online or even having a virtual assistant taking care of everything. I for one have watched enough movies to know that we need to retain some of that responsibility instead of passing it all off to robots!

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