8 Major Tech Trends That Will Shape Retail in 2022 and Beyond

Simultaneously, increases in compute power have made it easier to implement AI use cases at the retail edge. That’s a perfect opportunity for some long-awaited retail use cases to turn prime time. Far from just gimmicks, these use cases will usher in a new era of smart stores that boost customer experience while increasing staff efficiency to drive down costs. I know we’ve all heard this before, but let’s walk through some use cases that are finally in the realm of possibility. For instance, it helps recruit the right personnel effectively without human involvement, automate processes, and enhance the customer experience.

The answer has been to limit the responses, because it’s very very difficult to improve the accuracy, and easy to push it out of its zone even if you do manage to train on a specific data set that is supposed to improve its accuracy. Creating large language models is ridiculously expensive, and one big component of that is power. To the point where tech companies made the effort to show up at an energy conference in Houston, where AI was the top topic. Oregon's Portland General Electric has doubled its forecast for new electricity demand in the next 5 years.

of businesses have adopted AI for at least one business function

Sophisticated technologies like virtual trials, self-checkouts, image analytics at the shelf, supply chain control towers, and computer-assisted ordering models, etc have always been key topics in retail discussions. This trend is largely driven by the widespread adoption of AI (Artificial Intelligence), ML (Machine Learning), and data analytics in the industry; a movement that Generative AI will only accelerate. PacSun stated that its focus is on Gen Zers and that it receives constant feedback from young consumers via social media. To resonate with Gen Zers, the company aims to provide a “multi-channel, seamless” shopping experience.

Gen AI can score over traditional methods of supply chain operations through faster identification of market signals and risk events and quickly create efficient response protocols for the same. Gen AI can also help quickly analyze the historical efficacy of responses in the face of a black swan event or a sudden surge in demand and assist in framing response recommendations. Retail media helps you promote products on a retailer’s platform through onsite product ads, offsite displays, and in-store promotions. And it’s a fast-growing channel—the retail media network (RMN) market was valued at $45 billion in 2023.

Yet, according to a report by Kinsley, 79% of consumers intend to continue or increase their usage of self-checkouts in retail even after the pandemic. We’re likely to see companies investing in driving the in-store experience as a point of differentiation and a place where the consumer can truly experience the brand. Retailers can use VTOs to test demand for specific items, enabling more thoughtful manufacturing processes and enhancing their sustainability efforts, potentially saving some valuable time and money.

What will shape technology trends in retail in 2021?

And as AI continues to gain ground in retail settings, many companies will need to find ways to access the computing power to support their AI initiatives. Social media platforms are ai in retail trends becoming significant sales channels, with live commerce emerging as a powerful trend. Social commerce, which involves selling products during broadcasts, has seen substantial growth.

With AI and AR, businesses can detect vertical and horizontal planes, estimate and analyze depth, segment images for realistic occlusion, and even infer 3D positions of things in real-time. This hybrid approach enhances the quality of AI-generated content, making it more reliable and practical for diverse applications. By incorporating RAG, businesses can utilize comprehensive data sources to deliver richer and more nuanced insights and responses.

I guess you have to have faith – seems like there’s a lot of hope and faith going on out there, in the absence of measurable, sustained benefits proven out over time. He further argues that ChatGPT (and other LLMs) do one thing very well, and it’s a thing where the output has a lot of leeway in terms of accuracy. His (successful) attempts to derail a local auto dealer’s pretty low-end chatbot drive home the point – and have significant implications for retailers rushing to adopt chatbots exactly like these, pretty much proves the point.

“By using natural language processing, AI can even consider the sentimental or emotional value of gifts based on conversations or social media activity. For grocery retailers, supporting consumers’ holistic health goals include offering convenient and abundant access to personalized health and wellness products. Some grocery retail stores are positioning themselves as health-focused brands, such as Sprouts Farmers Market, which emphasizes organic products, and Healthy Living Market, which operates as a premium wellness retailer.

Moreover, AI security trends help reinforce cybersecurity, detect fraud, and prevent data breaches. We're talking about dynamic pricing that adapts to individual budgets, loyalty programs that actually understand what you value, and product recommendations that feel like they're coming from a friend who really gets you. Dynamic pricing is a strategy where product prices are adjusted in real-time based on various factors, such as demand, inventory levels, and competitor pricing. AI enables ecommerce platforms to implement dynamic pricing by analyzing real-time data and making instant adjustments to optimize profitability.

Some 39% of marketing professionals worldwide are using AI to improve search relevancy and product discovery, according to Q data from Dynata and Netcore. These improvements are not only happening on search engines but also on retailer websites. Although it saw some traction in 2021, many retailers were still uncertain about introducing this retail technology into their business. Yet, the prolonged pandemic, technological advancements, and more data on the beneficial effects of virtual try-ons make companies very hopeful for the future.

And while many invest heavily in their supply chain ecosystems, few actually apply AI today to achieve real-world learnings. Accurate demand forecasting is crucial to ensure retailers meet consumer demands without overstocking or under-stocking products. AI enhances demand forecasting by analyzing years of historical data to identify patterns and predict seasonality. Unlike traditional methods, AI can incorporate a high number of variables in real time, using internet data (such as sentiment analysis and economic factors) to refine its predictions. Generative AI, a sub-field of machine learning, allows businesses to create algorithms and tools to generate new data, content, and 3D/2D pictures using an existing data set. This branch of artificial intelligence banks on deep learning’s capabilities to understand patterns out of programming languages, audio, video, images, text, or other data types.

Reputed enterprises have implemented explainable AI systems, which provide insights into how decisions are made. This enhances accountability and ensures that AI models are not only accurate but also understandable and trustworthy. AI is an emerging technology advancing at a great pace with a great degree of dynamism attached to it.

Collaboration of Humans and Robots (CoBots)

These AI agents are made to take on jobs proactively, enhancing output and decision-making across a range of sectors, including banking and healthcare. Agentic AI can lower the cognitive burden on human operators and streamline workflows by acting autonomously and anticipating ChatGPT user needs. One of the most significant developments in AI is “shadow AI,” which is the use of AI tools and applications created without the IT department’s awareness or supervision. Shadow AI is growing in popularity as companies look for ways to be more innovative and agile.

This synergy greatly benefits industries like remote monitoring, autonomous vehicles, and smart infrastructure, allowing new capabilities and increasing efficiency in distributed computing environments. There is a whole world out there where the integration of AI in IoT connects every device with each other to enable them to perform multitudes of functions. Furthermore, the utilization of sentimental AI in mental health offers valuable insights for diagnosing and treating emotional and psychological conditions, leading to more effective and timely interventions. You can foun additiona information about ai customer service and artificial intelligence and NLP. Here are the two most popular examples of generative AI trends introduced by OpenAI. Facial recognition is a dominant form of biometric authentication, helping security personnel identify and remove rogue elements from the system.

Virtual reality is a similar type of technology—instead it immerses users in a 3D virtual world that replicates or even improves upon the real-world shopping experience. For example, users can put on a VR headset and explore a virtual store that feels like an actual physical store location. Shopping is a journey, not just a “find, click, exit” series of steps, and RMNs need to be informed by the same signals that customers are looking for. In retail media, the priorities of the brand and customer are inherently aligned; no brand wants a disruptive interaction.

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The technology can predict surges in demand and guide retailers to optimize inventory in advance of sales and promotions. Health and wellness apps can deliver hyper-personalized experiences to users who share some personal information. For example, by answering a few questions about exercise habits, goals, age and fitness levels, it’s possible for some apps to offer customized workouts that take into account the health and fitness data provided. The future of shopping will transcend physical and move into virtual in ways that push the boundaries of anything we’re seeing today.

In the latter, it provides rapid responses to conditions and gathers insights from decision-making processes related to those events. AI and IoT, together, are unstoppable, propelling businesses to greater heights. By understanding customer emotions, businesses can customize their responses and services to meet individual needs better, enhancing satisfaction and loyalty.

Subscription commerce has gained significant traction, with more retailers offering subscription-based models to provide convenience, personalization and value to customers. AR and VR technologies are transforming the shopping experience by allowing customers to visualize products in real-world contexts. Beginning the AI journey may appear intimidating, but with a clear strategy and the appropriate approach, ecommerce businesses can successfully incorporate AI technologies. The first step is to develop a clear AI strategy that aligns with broader business goals.

So yes, you’ll have to account for my biases when I highlight research or commentary that I find interesting, and that’s especially true this week. Who would have thought that "second-hand" would become a first-choice luxury strategy? When giants like Ikea, Levi's, and Zara are launching their own resale platforms, you know the game has changed. Meanwhile, platforms like Vinted and Depop have transformed from quirky marketplaces into retail powerhouses. At Netguru we specialize in designing, building, shipping and scaling beautiful, usable products with blazing-fast efficiency.

While causal AI requires high-quality data, computing power, and skilled human interpretation, its benefits outweigh these challenges. As it evolves, causal AI is expected to shape loyalty marketing, which will become increasingly sophisticated — potentially integrating with IoT and machine learning for even greater impact. More than half of consumers say they’ll return to a brand that offers a positive shopping experience online or in-store. Personalized recommendations are important to customers—65% say they’ll remain loyal to a retailer that offers a more personalized experience and 33% say they’re frustrated by irrelevant product recommendations.

Despite these challenges, the rapid advancement of AI technologies, particularly generative AI, is revolutionizing industries. According to a McKinsey survey, nearly 65% organizations are regularly using Generative AI in their business operations, nearly doubling the percentage ChatGPT App from the previous survey conducted in 2023. The US Bureau of Economic Activity released its third revision of real GDP for Q4 and full year 2023. They’re now saying that real GDP for Q4 increased 3.4%, an upwards revision and reflects, in part, increases in consumer spending.

With the increasing use of AI and data analytics, ensuring the security and privacy of customer data is more important than ever. On the flip side, the University of Michigan also released its update on consumer sentiment. And, just because retail didn’t have a lot of news, doesn’t mean no one had anything to say. I am firmly in the camp that ChatGPT is not Artificial General Intelligence (AGI), nor is it a significant step in that direction.

Undeniably, AI, with its different disruptive technology trends, is reshaping the business landscape in a big way and is going to get even bigger in the future. Therefore, every entrepreneur must be aware of the current trends in artificial intelligence to gain competitive advantages. While sustainability isn't new to retail, 2025 marks the year when it becomes a core business driver rather than a nice-to-have initiative. Retailers are implementing carbon footprint tracking on products, offering climate-impact scores alongside nutritional information, and creating circular economy business models.

Retailers need to change how they manage their loyalty programs, and artificial intelligence (AI) will be the key ingredient that separates average from exceptional loyalty schemes. For example, retailers can leverage AI analytical tools to glean insights from massive amounts of customer data, enabling them to deliver personalized promotions, discounts and experiences at scale. AI technologies transforming ecommerce include Natural Language Processing (NLP), machine learning algorithms, and generative AI. These technologies are enhancing customer experiences and improving personalized recommendations. While AI adoption is still in its early stages, retailers are committed to increasing their AI infrastructure investments. Over 60% of respondents plan to boost their AI investments in the next 18 months.

• According to VentureBeat, customers can now buy some of the same items for their actual homes that they can buy for their virtual homes in House Flip, a mobile game that lets players renovate and sell virtual homes.
• While AI adoption is still in its early stages, retailers are committed to increasing their AI infrastructure investments.
• Knowledge task automation is the most tangible benefit of Gen AI that retailers can derive immediately.
• Ultimately, AI leads us toward a world where humans work simultaneously with robots, ushering in a new era of innovation and endless possibilities.

Health and wellness products have long been popular in advanced economies, but emerging markets such as China, India, and the Middle East are now seeing rapid growth. In fact, the intent to increase spending on wellness products and services is two to three times higher in these regions compared to advanced markets like Canada and the United States. Read about the biggest trends shaping grocery retail in 2024, and discover what grocery industry leaders are doing to stay ahead. We’ll help you understand what these trends mean for your business moving forward. GenAI builds on the foundations created over more than 70 years of research into AI and, more recently, ML. At a high level, AI combines automation with the ability to access large amounts of computing power to process large amounts of data to find relationships and anomalies within that data, many of which may be not readily apparent.

In marketing, sentimental AI aids in creating emotionally resonant campaigns that boost engagement and conversion. As per a Data and AI Trends Report 2024 by Google Cloud, 2/3rd of decision-makers anticipate a widespread democratization of access to insights in the coming years and beyond. Also, this AI app trend allows businesses to program AI tools, like Sway AI, for data analysis of current and future processes. Conversational AI applications like Chatbots can automate more complex, repetitive, and rule-based tasks, enhancing customer experience and improving productivity. As per a report by Grand View Research, the chatbot market size is estimated to reach around $27.2 million by 2030.

Therefore, it doesn’t come as a surprise that social media platforms are monetizing their presence in people’s lives in what is known as social commerce. Retailers embracing AI and machine learning (ML) have experienced remarkable success, with a reported 2.3 times growth in sales and 2.5 times growth in profits in 2023 compared to competitors. While AI is already playing a crucial role in demand forecasting and customer sentiment analysis, its potential for industry-wide predictions remains a topic of debate.

By leveraging generative AI, ecommerce businesses can create a more personalized shopping experience, ultimately driving higher customer satisfaction and loyalty. NLP-powered chatbots and virtual assistants can handle routine tasks, answer customer queries, and provide personalized recommendations based on specific shopper behaviors and preferences. Companies like Sephora are already leveraging NLP technology to optimize voice search, making it easier for customers to find products and services.