Skip to main content

Study: Three technologies that will shape retail – and one that won’t


While several highly publicized emerging technologies are poised to have a major effect on retail by 2026, another touted bleeding-edge solution may fall short of expectations.

Hyperconnectivity, wearables, and augmented reality (AR) will all play a major role in the evolution of retail during the next 10 years, according to a new Ovum study commissioned by performance marketing technology company Criteo. As for the highly touted 3D printing, the study, “The Future of E-commerce – The Road to 2026,” finds it will only have limited impact on the development of retail.

Following is a summary of how the study predicts each technology will intersect with retail between now and 2026.

Hyperconnectivity: By 2026, the Internet of Things (IoT) will be a routine part of consumers’ daily lives. The study predicts that by 2020, there will be 660 million machine-to-machine (M2M) connections, which will make retail more efficient and effective. Connected retail display cabinets and smart product tags will be commonplace, enabling retailers to track demand and report on stock levels in real time, which in turn will improve supply chain effectiveness.

M2M connections will also enrich consumer engagement in retail, such as via connected indoor and outdoor digital signage equipped with sensors. Content and advertising feeds streamed to connected displays will be adapted in real time to anticipate and target the needs of consumers based on local conditions, such as the location of the screen, the time of day and the weather.

In addition, connected driverless cars with built-in GPS and video screens supporting streamed content could become an important marketing platform for brands and retailers. Connected appliances in smart homes could also become common, and Amazon is already exploring the opportunities with Dash buttons and its Echo voice device.

Wearables: Although the ecosystem is still emerging, the number of wearable devices coming to market is increasing. Ovum expects the installed base for wearable devices to reach 650 million by 2020, However, the study does not foresee wearables becoming a mass-market mobile commerce platform in the manner of smartphones. This is because of the inherent constraints in the form factors and capabilities of wearables, such as tiny screens, although as the technology matures, wearables will become smarter. In the mobile payments space, the study predicts a viable role for smart watches in tap-and-go mobile proximity payments.

Augmented Reality (AR): Going forward, the study predicts that augmented reality (AR) rather than virtual reality (VR) will have the greatest impact on the retail experience. AR describes normal views of reality that have been enhanced by digitally generated information or graphics superimposed on that view. This is in contrast to VR, which describes fully immersive digital environments.

AR has the ability to blur the boundaries between online and in-store shopping. For example, AR will allow consumers to virtually try on clothes and jewelry. This could significantly help lower returns on products that do not fit one’s body or personal space, such as clothes and home furnishings

AR apps will also allow consumers to view products in their homes, which can then be purchased on the spot from their mobile devices.

The study further predicts that AR will also be widely used to enhance the in-store experience, particularly for concept and showroom stores.

3D Printing: According to Ovum, 3D printing will grow in retail, but only if it can provide genuine benefits, quality outputs and speed at a reasonable cost. However, even if 3D printing does manage to deliver on all these parameters, it is still only expected to have a limited role in mainstream retailing.

Ovum expects 3D printing to have the most impact on retailers of highly personalized products, such as gifts. It could also be used for spare parts in more complex products, such as cars and motorbikes. For more simple items, such as home improvement goods like screws and hammers, the cost is already so low that the benefit of production via 3D printing would be minimal. The report does see a stronger role for community-run 3D fabrication shops.

This ad will auto-close in 10 seconds