Technology as a Strategic Tool in Retail

How Technological Advancements Are Reshaping the Retail Sector

Technology and digital transformation have become undeniable catalysts for progress in the retail sector in recent years. What is now becoming increasingly clear is the necessity for a meaningful digital upgrade; one that creates the ground for cultivating a comprehensive and successful business strategy. Embracing technological tools enables businesses to adapt more seamlessly and rapidly to the constantly evolving landscape, save both time and financial resources, and achieve high levels of customer satisfaction. So, what key factors should retailers consider to maximize these benefits?

The Importance of Speed and Operational Efficiency

Terms such as “agility”, “efficiency”, and “consistency” have never been more crucial and now define the priorities of any business striving to remain competitive in today’s retail environment. According to PwC, global investments in retail technology are expected to increase by 10% between 2024 and 2028, a significant rise from the 4% growth observed in the previous four-year period. Below are some key areas where technology is fueling retail growth.

Artificial Intelligence: New Opportunities in Retail

Artificial Intelligence (AI) has recently emerged as a game-changer across the retail landscape. Its ability to rapidly and effectively adapt to provided data, along with its capability to detect shifts in consumer behavior, makes AI a critical asset for delivering exceptional customer service in dynamic environments. Retail businesses integrate AI solutions to identify and predict consumer trends and create personalized experiences. From AI-driven chatbots to intelligent virtual shopping assistants, these tools enhance customer interaction and foster a long-term brand loyalty.

Harnessing the Power of Data Through Advanced Analytics

Every interaction, whether minor or major, generates valuable data; from the amount of time a customer spends evaluating a product to the number of potential buyers who have seen it. These insights provide a strategic advantage for businesses. Data analytics tools help retailers understand consumer behavior and predict future trends. Analyzing such information allows businesses to adapt quickly and refine their marketing strategies. According to Fortune Business Insights’ Retail Analytics Market Analysis, the global retail analytics market was valued at USD 7.56 billion in 2023 and is projected to grow from USD 8.75 billion in 2024 to USD 31.08 billion by 2032, with a CAGR of 17.2%. These numbers underscore the critical importance of leveraging such tools for business growth.

Evolving the Supply Chain Through Technology

The use of automated systems and robots for storing, organizing, and delivering products, along with the integration of advanced tools for real-time supply chain monitoring, enables companies to increase operational efficiency and reduce costs.

According to The Economist, 65% of CEOs anticipate that gen-AI could optimize or automate up to 50% of supply-chain operations within the next three years. By adopting these solutions, companies increase operational efficiency, lower costs, and accelerate purchasing processes, while improving the overall customer experience.

Technology as a driver of Sustainability

Sustainability has become increasingly integral to retail, as it involves selling products or offering services in ways that minimize environmental and social impact. From sourcing alternative raw materials to implementing carbon-neutral tech practices, “sustainable retail” is now at the forefront. A compelling example is the use of AI-powered digital showrooms, such as in the cosmetics industry, where customers can virtually “try on” products, saving both time and resources that would otherwise be spent on producing physical samples. Remarkably, nearly 50% of global consumers prefer buying from brands that have clearly adopted more sustainable practices and strategies, according to Diversitech Global.

Digital Marketing: A strategic imperative

A successful digital marketing strategy takes full advantage of all the data collected and adjusts content to meet diverse consumer needs. Tools such as SEO and SEM boost a brand’s online visibility and accessibility. Additionally, digital tools that track metrics like ROI (Return on Investment) help the performance evaluation of their marketing campaigns and fine-tune their strategies to remain competitive in the market.

Retail Tech Trends for 2025

New technologies, digital tools, changing consumer behaviors, and innovative business models are transforming how retail operates. AI, in particular, is expected to remain a dominant trend. Its ability to rapidly process vast amounts of data and generate actionable insights makes it an integral part of digital business evolution. One emerging concept enabled by AI and data analytics is “Subconscious Commerce” (a proactive retail model where consumer desires are predicted and met before the consumers themselves are even consciously aware of them). This practice collects real-time data from shopping history, web browsing, and social media to forecast future needs and deliver personalized recommendations.

Alongside all the technological tools available to modern retail businesses, Omni-channel strategy is becoming central. This refers to a cohesive presence across all platforms, both digital and physical, and is closely aligned with the concept of Phygital Retail. According to Polestar, 73% of consumers switch between different channels before making a purchase decision, and 95% research the product online. For example, a consumer may discover a product on their mobile phone, seek more information online, test it in a physical store, and then complete the purchase digitally.

For more trends and an in-depth analysis of the retail sector’s developments, download the Retail Innovation Report 2024, by Cardlink, a Worldline brand, in collaboration with Found.ation.