Shoppers have an abundance of data and insights available to them through the continuing developments in technology, triggering a change in their expectations.
The most significant change is the growing demand for maximum transparency in every phase of the retail transaction. This starts in product manufacturing and extends through the supply chain, pricing, shipping, and everything in between. In order to achieve this level of transparency, retailers must actively leverage the very same technology that is empowering shoppers.
How Technology Powers Transparency in Retail
The 2018 Coresight Research Innovation Series panel examined the profile of today’s shopper and noted that transparency is the new norm in retail, facilitated by advanced technologies such as blockchain and the Internet of Things (IoT). Automated, intrinsic systems to account for products and manufacturing — as well as any other factors that contribute to price and delivery — give shoppers an understanding of the implications of every purchase they make, from their wallet through to the environment.
The brands that remain viable with the current and emerging shopper base trace the product from end-to-end – covering delivery, manufacturing, quality, safety, ethics, and environmental impact. Shoppers expect this information to be readily available. By providing it, retailers can build trust by actively demonstrating their commitment to transparency and traceability – powered by technology.
4 Advanced Technologies Used to Promote Transparency in Retail
Originally designed for Bitcoin, blockchain technology is used to store and share digital records of information – like transactions – that are linked chronologically. The information can be shared across networks and viewed in real time. This means that any updates or changes are visible to anyone across the network and they can see the full history of a product and its components.
Its implementation has become a leading retail trend, with 7 in 10 consumer industry executives expecting to have a blockchain production network in place within the next three years. Chain Business Insights recently surveyed supply chain professionals, and revealed that they agree: the key use for this technology is to improve traceability and transparency. It can help retailers build trust with shoppers, as it provides a reliable, real-time vehicle for sharing accurate data among the various entities involved in a product’s lifecycle. For example, it can help to verify the authenticity of certain products. Additionally, items can be tracked from production through delivery, holding each party along the way accountable.
Consider some common issues that arise in the retail grocery industry. Shoppers are often skeptical of how “organic” their food truly is. Another issue is food being recalled because of potential contamination. Tracking items from production to the shelf makes it easier to demonstrate to shoppers that their food products are what they claim to be, plus it would be easier to intervene if any problems were to arise along the supply chain.
Walmart is leading an effort to revolutionize the way the industry tracks food using blockchain. The retailer has partnered with brands like Nestlé, Dole, Tyson and Unilever to form a group called Food Trust to produce a farm-to-shelf view of the supply chain. Their ultimate goal is to improve recalls, quickly identify any issues and reduce the time consumers are at risk. This is possible thanks to the traceability that this technology provides.
2. Artificial Intelligence (AI)
AI involves programming computer-operated machinery to think or act like humans. Within the retail space, this has powerful implications for automating tasks that were previously handled manually by humans. The advanced technology has already helped 38% of retailers automate their back-end processes to help boost quality and reduce costs.
Shoppers’ first direct encounter with AI is typically in product recommendations made as they shop. They may also encounter it when seeking further details or product support, as natural language processing is being used more frequently to help automate customer service. Use of AI here frees up human agents to answer questions that cannot be easily resolved, making them more accessible for each shopper needing their help.
In the supply chain, AI can help automate the packing, shipping, and quality control processes – providing increased transparency both to shoppers and internal parties. Target partnered up with Inspectorio, a quality and compliance platform powered by AI, to transform its inspection processes, replacing pen-and-paper tracking with computerized platforms to improve accuracy and efficiency. Through automation, inspectors can quickly and efficiently collect more data and provide valuable insights to brands, suppliers, and individual retailers to track and enhance product performance and delivery. Furthermore, the partnership makes it easier for Target to prevent and mitigate reputational risk by closely monitoring the supply chain and quickly addressing any issues as they arise.
3. Internet of Things (IoT)
The IoT is a network of physical objects that are connected and embedded with sensors. This allows these devices to communicate, analyze and share data through networks and cloud-based software. In retail, this can be used to monitor shoppers’ interactions with brands and products to better understand the sales process, as well as to provide retailers with accountability regarding products.
The most commonly encountered sensors in retail include RFID inventory-tracking chips, in-store infrared counters to monitor foot traffic, cell/WiFi tracking systems, digital signage or even a kiosk. However, IoT has the greatest potential to enhance transparency for shoppers in the supply chain. Using sensor data to monitor product storage and transit can help enhance transportation methods as well as verify its quality. For example, this technology can show whether a product is being kept at temperatures too high or too low – in real time – which can help retailers avoid a substantial loss.
Inventory visibility can also boost convenience for shoppers, providing them with valuable information while also facilitating the purchase. Lululemon uses RFID chips to let their shoppers scan barcodes on the hangtag through its app to check stores for inventory. This provides insight to the shoppers about inventory, while also providing Lululemon with information about customer trends.
4. Augmented Reality (AR)
AR blends interactive digital elements – like visual overlays or sensory projections – into real-world environments, allowing shoppers to experience and interact with products before they make a purchase. Sephora has already implemented AR to increase shopper transparency through the use of its Virtual Artist app. Developed in partnership with ModiFace, the technology scans your face, detects your facial features and lets you test different products and looks. Similar platforms are emerging to help with product recommendations, helping shoppers buy the products that best suit their needs.
This is the next best thing to trying on every physical product in-store, giving shoppers the opportunity to make informed purchasing decisions. Through AR experiences, they get more insight into products and retailers have the chance to build their loyalty and encourage repeat purchases.
These are four ways in which technology is facilitating transparency in retail, but this list is not exhaustive. There are new applications constantly being developed. Also, these technologies do not exist in a vacuum; they can be used together — such as blockchain and AI — to produce an outcome that favors both the shopper and retailer. In order to remain competitive and to retain (or even grow) their customer base, every retailer needs to invest in advanced technology to improve their end-to-end transparency.