Five Consumer Tech Trends Driving Change for Merchants in 2018

News

January 15, 2018


The January Blog Series | 2018 Trends

Issue 17: Five Consumer Tech Trends Driving Change for Merchants in 2018

By Gijs op de Weegh, COO -- Acapture

2017 was the year that the customer truly became king. Across the last twelve months, the most successful and talked about merchants and marketplaces were the ones that put the buyer first, offering personalized services to suit individual preferences and delivering compelling, smooth shopping experiences. And it's consumer technology that makes this possible.

Omni-channel buyers in the connected world come with high expectations for how, where and when they will be able to access products and services and expect brands to utilize the most cutting edge tech to satisfy these expectations.

So what are the main consumer tech trends that merchants need to keep up with in 2018?


Data science

Valued at USD $23.8 billion at the end of 2016, the data science market nearly doubled this year and is now estimated to be worth USD $43.3 billion. With its astounding potential to improve personalization of products and services, optimize promotions, drive customer engagement and deliver deep insight into consumer behavior, it's no surprise brands are investing so much in the area.

As Sujay Kar, Analytics Executive at JustFab Inc., put it, "Moving forward, brands and companies can sharpen their personalization strategy by ensuring that data, personalization and analytics teams work hand-in-hand with the media and creative teams in producing ads and content, and implementing a smart media buying strategy. And an effective online personalization strategy doesn't have to apply only to digital efforts. These can be replicated across physical, brick-and-mortar retail stores too."


Artificial intelligence

While gathering together great swathes of data is extremely valuable, artificial intelligence (AI) is vital to turning this into better customer experience. Consumer data is just fuel. AI is the car.

With the global value of the AI industry set to reach USD $70 billion in 2020, it is worth noting the sheer variety of potential benefits AI brings to merchants. It can cross-reference data with your product catalogue to ensure each consumer always sees the items that they will find most appealing. It can add flexibility and humanity to the virtual service assistants and chatbots that handle common queries, complaints and issues online. It can use machine learning algorithms that better analyze recurring transactions and deliver accurate financial advice.

The scale of influence AI will continue to have on the entire retail market simply cannot be understated.


Virtual reality and augmented reality

With investment into virtual reality (VR) and augmented reality (AR) set to increase in 2018, it will be the retail sector that pours the most into the technology. Worldwide spending in this area is set to nearly double next year to a figure of USD $17.8 billion, giving VR and AR a CAGR of 98.8% from 2017 to 2021.

Countless major brands now use VR and AR to showcase their products and improve the consumer experience. IKEA, for example, utilizes VR and AR programs to allow interior decorators to change the color of units and explore a new layout from the perspective of children. Elsewhere, Harley Davidson recently launched its in-app virtual shopping experience, Alibaba integrated Buy+ VR shopping with AliPay, Marks and Spencer surprised consumers with its pop-up VR showroom, and Thomas Cook used VR to let potential travelers "try before you fly."

Expect much, much more of this activity next year.


Blockchain

2017 was a huge year for blockchain technology, though it's unlikely many consumers noticed its influence. This, as George Howard of Berkley College points out, is due to the fact that "blockchain tech should be dominantly invisible -- even as its features and functionalities improve peoples' and businesses' lives." This implementation stage, which 2017 represents, is a crucial step in the later adoption of blockchain tech, as it will allow skeptics to see the functionality, rather than just hear of its promise.

So what are some of the functionalities of blockchain in the retail space that are now apparent to merchants? Well, one element is cost reduction. Blockchain reduces the cost of cross-border payment remittance from 5 - 20% to around 2 - 3%, while also offering guaranteed, real time transactions. Blockchain also helps eliminate mobile payment fraud, makes loyalty programs easier to run, makes tracking and monitoring the supply chain simpler, streamlines and secures identity management and makes effective crowdfunding more accessible.


The Internet of Things

By 2020, 50 - 100 billion connected devices will be in use worldwide and the potential benefits for retail brands that stay ahead of the internet of things (IoT) curve are endless. IoT offers a faster time to market for products, cleaner inventory management, more efficient energy usage, bolstered productivity and higher production quality.

Yet there are risks too. Wearable devices connected to their business network are rated by IT professionals as the biggest threat to security in their companies. One of the major problems is that those using these devices (as opposed to say traditional PCs and laptops) rarely realize when the device has been breached and so continue using it after security is compromised.

This has not deterred retail brands from putting money in IoT, however, with investment set to reach a little under USD $40 billion by the end of 2018.

These facts and figures are just the beginning. More and more, we see consumer tech becoming essential to how buyers interact with brands, driving engagement, loyalty and expectations. It is crucial merchants understand not just what technology they need to invest in but also how they should best utilize it as part of a smooth consumer experience strategy. That's the only way to stay ahead of the competitor in this increasingly connected world.