By James Hughes, Retail Chief Technology Officer EMEA at Verizon
Prediction 1: Retail Media Networks (RMNs) will evolve dramatically, using data and technology to transform physical stores into personalised shopping experiences, while unlocking powerful advertising opportunities for brands.
- Retailers and brands in 2025 will increasingly deliver personalised content, offers, and advertisements to customers who opt-in, either through loyalty programmes or funded activities like movie launches. This strategy will enable retailers to access additional budgets from the consumer packaged goods (CPG)/fast moving consumer goods (FMCG) sectors and gain valuable insights into consumer preferences and behaviours. By understanding what customers like and dislike, and what marketing strategies are effective, retailers can refine their approaches to enhance basket size, shopping frequency, and Net Promoter Score (NPS).
- The widespread use of mobile devices in stores will amplify this trend, with nearly half of people around the world using their phones to shop online every day (45%), according to YouGov. This surge will render existing guest WiFi networks, many of which were designed over five years ago, inadequate. Consequently, line-of-business leaders focused on customer experience, loyalty, and RMN will pressure IT departments to invest in upgraded infrastructure.
- Several large grocery retailers are already exploring or investing in solutions to address these challenges, indicating that widespread adoption is imminent. By upgrading their network infrastructure, these retailers can support the increased demand for mobile connectivity and create a seamless shopping experience. This proactive approach will not only help meet current consumer expectations but also position retailers to capitalise on future technological advancements and consumer trends.
Prediction 2: Retail will shift from a big data to a smart data strategy, driven by the need for better analytics and insights into customer and staff behaviours in-store:
- We are seeing retailers increasingly invest in sensors to gather data on customer behaviour, which can be mined for data analysis to drive sales. Retailers want to understand how effective staff interactions are in driving sales and NPS.
- Driven by the need for better analytics and insights into customer and staff behaviours in-store, line of business stakeholders are increasingly seeking to justify and measure digital and physical investments through advanced analytics. Traditional people counting solutions, which have been in place for a long time, lack sophistication, particularly in distinguishing staff from customers. Moreover, traditional footfall sensors do not effectively measure customer journeys, dwell times, or heat mapping.
- New investments in Point of Sale (PoS) systems, digital signage, and content management systems present opportunities to accurately measure the impact of content. These technologies help justify investments and provide insights into which content is most effective based on specific objectives and KPIs. For instance, a major global retailer has leveraged computer vision integrated into their existing retail infrastructure, significantly improving people counting and providing valuable insights, including conversion rates, heat mapping, dwell times, journey mapping, and linking user flow to content in Windows or in-store signage, all the way to PoS.
- This successful example is not isolated. Two other major retailers are exploring similar solutions, indicating a growing trend. By embracing these advanced analytics and technologies, businesses can gain deeper insights, optimise their operations, and ultimately enhance the customer experience, driving innovation and growth in the retail sector.
Prediction 3: Retailers will focus on reducing shrinkage where they can achieve the most measurable results, such as waste reduction and operational efficiencies.
- Shrinkage remains a key challenge for retailers, and while reducing theft remains an ongoing challenge, retailers are focusing on areas where they can achieve the most gains. Sensors in tandem with AI are being used to provide more accurate measurements of shipments as well as tighter controls aimed at staff related shrinkage.
- Waste reduction is another key focus area, especially those holding perishable goods for extended periods. More advanced temperature and moisture measurement can be used to help preserve fish, for example, so that it doesn’t get thrown away if it has spoiled due to a rise in temp.
- The benefits of these advanced technologies extend beyond reducing shrinkage. They also improve overall operational efficiency, allowing retailers to streamline processes and reduce costs. By adopting these innovative solutions, retailers can stay competitive in a rapidly evolving market, providing a secure and efficient shopping experience for their customers.
Prediction 4: The future of retail will be immersive: brands, retailers, and tech companies will collaborate digitally to create seamless, next-gen shopping experiences
- Examples like Walmart partnering with Roblox illustrate how these partnerships can deliver “wow” moments that draw customers to retail locations. These experiences encourage consumers to make additional purchases and leave them with memorable moments, selfies, and positive sentiments. As retailers continue to enable such immersive experiences, the impact on consumer behaviour will be significant.
- The ability to measure the success of these initiatives accurately will be crucial. By leveraging advanced analytics and data-driven insights, retailers can assess the effectiveness of their collaborations and refine their strategies accordingly. This will drive further innovation and investment, so that each partnership not only attracts but also delights shoppers.
- These collaborations will help retailers stay competitive in a rapidly evolving market. By offering unique, immersive experiences, they can build stronger brand loyalty and attract a broader audience. The integration of digital and physical retail spaces will become more seamless, enhancing the overall shopping experience and setting new standards for consumer engagement.
