In 2020, millions of people had their first extensive digital experience, including online shopping for virtually any category of products. Customers have since returned to offline stores, but they still want to use the benefits of e-commerce. Today, according to McKinsey, different generations tend to choose a hybrid model that combines the "old" tendency to choose physical stores with digital knowledge and skills. The main task for retail right now is to build such a model quickly. However, analysts believe that the near future has more changes in store for the industry.
So, what solutions should a retailer implement in their business to stay competitive in five years?
- Self-checkout systems. Surveys around the world show that the vast majority of customers find contactless shopping and payment methods the most convenient. This creates a very favorable ground for implementing new solutions: retailers don't have to convince the customers of the benefits of automated services—they simply need to meet their expectations. That's why analysts are very optimistic about the growing demand for self-checkouts. Over the next five years, this market is expected to more than double, from $28 to $68 billion.
We at IXR have created an entire ecosystem of devices, from self-checkout terminals (SCOs) and touch screen cash registers to loyalty terminals and kiosks, from smart carts to self-service scales, cash operating units, mobile scanning, and self-scanning systems. We manufacture and install some of the most reliable, cost-effective, and easy to maintain systems in the world. At the same time, we are working on making our offering affordable and suited to the needs and requirements of small and medium-sized businesses. For instance, our Self-Checkout Mini is 50% smaller than the standard one, but has the same functionality and costs 20% less.
By mid-2021, 2,700 stores of our customers had been equipped with over 8,900 self-checkout terminals from IXR. By the end of the period, the total number of installed terminals is expected to exceed 12,000.
- Personalization. Surveys show that 80% of customers accustomed to the benefits of personalized experience in e-commerce are prepared to receive personalized offers from offline retailers as well. The divide between physical and online stores is becoming less noticeable as they blend into new retail formats, e.g., phygital.
Aside from offering quick and high-quality customer service, stores of the future will also have to study the history of purchases, create personalized promotions and discounts, offer items based on personal preferences and needs (e.g., items for children, vegetarians, sports fans, etc.). In order to do that, stores may request customer consent to use analytical information integrated from social media and other mobile applications.
- Data-driven solutions. The pandemic has shown just how ineffective long-term planning based on data from previous years can be in a rapidly changing economic environment. The traditional approach is being substituted by data-driven solutions that help collect and analyze up-to-date information on inventory levels in the warehouse and in stores, supply chain movements, customers, customer demand, sales, etc. This allows sellers to make accurate marketing and purchasing decisions at any given time.
Today, due to the high cost of analytics, they are mostly used by large retailers for seasonal pricing based on data from millions of customers. In the future, each store will be able to study the demand among its regular customers to improve the service levels, offer relevant items, adjust prices, and grow sales volumes.
IXR works to reduce the cost of video analytics solutions and make them available not only to large retailers. An affordable solution for wide use will provide retail locations with data for their marketing strategy development, which is not available today due to the high cost of software.
Overall, analytics that uses neural networks is one of the main areas of IXR's innovation work. Our solution ecosystem already includes a smart tool that uses data from different sources, including CCTV, to generate constantly updated forecasts of checkout demand for ten minutes ahead with accuracy levels as high as 78%.
- The Internet of Things. It's about one of the key technologies for retail of the future. Globally, the retail IoT market is expected to grow from $14.5 billion in 2020 to $35.5 billion by 2025 (CAGR of 19.6%). The penetration of IoT solutions like Smart Shield in retail will be facilitated by the rapid reduction in the cost of sensors and equipment.
Sensor systems will automatically monitor and adjust room temperature, lighting (like a smart home), understand when smart shelves need to be replenished and place orders for products, offer store layout options based on customer movement analytics, etc.
These are just some of the solutions we are already developing or plan to develop. IXR also works on products based on biometric technology. We have already launched a number of biometric solutions like facial recognition payment built into self-checkout terminals, staff timesheets, and driver fatigue monitoring systems. We pay special attention to compatibility and integration of all solutions to create a truly seamless high-tech environment in the stores of the future.