Retail sales occur when a business sells finished goods or services to consumers in exchange for money. Though the history of retail spans a long timeline, the development of retail as an organized industry began in the post-industrial revolution era with the rise of urban markets.

Despite this incredible development, the retail industry poses serious challenges to competition and technological advancement. In this article, we will look at the evolution of the retail industry and focus on the technological trends retailers must embrace to stay relevant in 2022.

Retailing in the 21^st century

In an era of information abundance, retailing has grown by leaps and bounds. A person sitting in his bedroom in a remote village in India can order a product available at a super-specialty store in the US. The connected world of retail and e-commerce has bridged the product information gap and made shoppers acquainted with the ease of shopping.

While it may look like a win-win situation for retailers to do business in such an open trade ecosystem, it has, in reality, become more complex. There are multiple instances of how once-acclaimed retail businesses failed to cope with the everchanging retail dynamics:

•  Toys “R” Us, the mighty toy retailer, struggled to keep up with changing trends in consumer behavior and failed to innovate with time. 
• Border Group, an American multinational book and music retailer, had to announce the liquidation of its 40-year-old business in 2011 due to declining sales caused by the lack of diversification. 

These failed business stories signal how retail is evolving faster than ever before and coercing retailers to stay relevant in a highly competitive customer-driven market.

The retail industry is taking a paradigm shift in 2022, and consumer behavior is becoming complex. Yet, it is important to understand what is causing this change in consumer behavior and how rethinking customer-driven strategy can help retailers keep ahead of the competition. 

Changing customer mindset 

Even with the worldwide retail market reaching a value of $27.34 trillion in 2022, the retail market continues to expand. Today’s consumers are less loyal but more conscientious. A consumer study in 2020 has shown that 20% of consumers have switched from their preferred brand and retailer to other options in search of convenience, availability, or affordability. 

Source: Statista

Retail industry has become highly competitive as every retailer is betting on consumer experience. Consumers now have multiple buying channels to address their requirements.  

There has also been a dramatic shift in the consumer shopping pattern from physical stores to online stores triggered by the COVID-19 pandemic. Online retailers also have the advantage of competing with huge product assortment, discounted prices, quick shipping, post-purchase assistance, and rich consumer data to predict trends and behavior.

Even though physical retailers have been slowly reorganizing and reassembling post two years of COVID-19, it is still going to be tough for physical retailers. In the long term, consumers might not want to avoid going to physical stores or shopping malls completely, but they want an experience equivalent to online shopping. Its high time for retailers to recognize digital transformation and create an omnichannel experience by integrating physical stores to the online world. Retailers must address the importance of investment in in-store technology like retail POS, smart shelves, AR/VR software, cashierless checkout, etc., to recreate unique physical engagements.

The focus now is the ease of shopping at a retail store. Shoppers are looking for a smooth and hassle-free shopping experience and post-purchase assistance. To achieve this goal, technological advancements in retail stores are highly essential to retain a positive buyer experience.

Tech-savvy shoppers need tech-savvy retail stores

Today’s shoppers are tech-savvy and more informed. Even before a salesperson attempts to give a product demonstration, the shoppers are already well aware of the product. Retailers now need to put in extra effort to convert visitors into paying customers.

Several technological advancements are shaping the global retail industry. But here are the most important key trends retailers must follow to optimize their retail stores for maximum efficiency:

Trend 1: Omnichannel retailing

Retailers need to go wherever their customers are, both offline and online. It is necessary to integrate all sales channels to enable data synchronization. For example, Burberry, a luxury fashion retailer, is a pioneer of omnichannel retailing in the fashion world. Its sales channels incorporate video, its Instagram site, direct customer inquiry, and all customer touchpoints before they arrive at the store.

Trend 2: In-store retail software

Department stores, convenience stores, hypermarkets, or any other form of organized retail now incorporate the bare minimum retail software technology. 

Using in-store retail software like retail POS, retail management system, retail analytics software, and so on is essential to perform daily tasks such as recording a sale, customer checkout, inventory tracking, employee management, etc.

Trend 3: Virtual and augmented reality shopping

Virtual and augmented reality is a recent trend that has impacted the retail space. 
Virtual try-on allows customers to find the best size without getting into the hassle of trying many products. Similarly, virtual fitting rooms let shoppers see how they look while trying products. For example, Sephora, Target, and Nike have already implemented virtual and augmented reality in their stores. 

Augmented reality-based navigation technology helps customers find items through a mobile screen. For example, Ikea, through its ‘The Place App’, helps customers place furniture in their homes and visualize how the item will look in reality.

Trend 4: Cashierless, autonomous, or self checkout

Customers dislike waiting in long queues at checkout counters. Post pandemic, the concern for hygiene has risen, and customers want their shopping experience to have less human intervention and physical touch.  Cashierless or self checkout is a recent development in the physical retail space that enables customers to scan a code at the entry gate, shop for what they want, and leave the store without waiting at the checkout queue. Customers are monitored using CCTV cameras and internet of things (IoT) sensors for each item purchased and automatically billed on their credit cards. For example, Amazon is using such cashierless technology in Amazon Go stores and selling such technologies to other retailers as well.

Trend 5: Artificial intelligence (AI), machine learning (ML), and IoT in retail

Retail analytics software use deep learning algorithms to analyze complex data relevant to inventory management and demand forecasting. AI and ML programs are also used to develop IoT devices for retail stores. For example, Caper AI’s AI-powered Caper Smart Shopping Cart identifies items in the cart and helps shoppers find the location of the product on the shelves, allowing them to avoid monotonous checkout queues. Another such solution is Theatro’s AI-powered intelligent assistant enables frontline workers to connect and request floor help, check inventory, or find answers without leaving customers in the aisle. 

Retailers are going to use AI/ML to gain real-time visibility into supply chain management and build better relationships with suppliers and vendors.

A tour of G2 Retail Software categories

Keeping in mind the trends that have already impacted the retail industry in 2022 or going to impact soon, G2 provides an array of software across categories relevant for the optimization of retail stores.

As of June 2022, G2 caters to 16 different Retail categories on its platform. The top five leading categories by product counts are Retail POS, Retail Management System, Retail Analytics, Retail Assortment Management, and Retail Intelligence Software. 

The Retail POS category has 503 products contributing to 1921 reviews, up by 11.5% from the last year. Retail Management category has 258 products that have generated 562 reviews, up by almost 14% over a year. Retail POS has double the products of the retail management system as most of the retail POS available in the market offers an integrated solution that competes against the retail management system.

Retail POS is the most basic software required for any organized retailer in 2022. Retail POS categories include Shopify POS, Square Point of Sale, Lightspeed Retail, Heartland Retail, QuickBooks Point of Sale, Clover, etc., which are rated highly by G2 users and positioned as Leaders in the G2 Spring 2022 Retail POS Grid^Ⓡ Reports. Also, the products in the Retail POS category have an Average User Adoption score of 78% (indicated in G2 user reviews), which signifies that users experience convenience when adopting these products. 

2022 and ahead

Consumer behavior has become highly volatile and unpredictable post pandemic. Every retailer across the globe is fighting for major market share and aiming to be a category killer. 2022 might be a physical retailer's worst nightmare, but it also brings multiple avenues for digital transformation with software that recognize retailers’ dreams.