Retail is not a trend, but a phenomenon reflecting the state of the social and cultural sphere of modern civilization. Retail cannot evolve independently as a separate segment of the economy; it is driven by public sentiments, consumer requirements, and economic factors.
Retail as an industry has been showing booming growth of late. The ongoing retail market transformation is associated with changes in the modern buyer’s profile. Customers of stores are becoming more choosy and exacting; they want digitalization and new business models. Their demands create or consolidate new retail trends while eliminating others. The most prominent trends are not only strengthening, but actually leading the rest of the market. There are three such major trends today.
The most obvious one that immediately comes to mind is remote sales. They are the result of the internet’s deep penetration of all spheres of life. The Russian e-commerce market is growing by 20% annually, and 2018 was no exception. Online you can compare prices, read reviews and select the most suitable product. Even in remote villages these days “going” to an e-store is often the most popular way of shopping.
Notably, a store can go online without closing a physical point of sale with cashiers and shop windows. Major supermarkets organize delivery, pre-packaged order pickups and other services. However, the fastest growth is demonstrated by the sellers that abandoned offline stores altogether, and marketplaces such as AliExpress and Beru.
Customers can check reviews, compare prices and pick what looks best. It is important for them to be able to get the service anywhere and anytime, even while sitting on a toilet.
Departing from offline shops is an extreme measure for those whose product is one-of-a-kind and requires “face-to-face introduction.” Many prefer to try on shoes and clothing before buying. An alternative format includes online order, delivery of the unpaid order, fitting and purchase. This shopping model is employed by Wildberries and Lamoda. Now there is yet another trend, cashier-free stores.
This is actually a regular store that operates without checkout cashiers and security, which makes it more cost-effective. It has a self-checkout system (SCO) with a multi-touch screen, a barcode scanner, speakers and a mike for sound apps and voice assistants, and a 3D video camera. Security is replaced by a smart CCTV system. The local network of video cameras and special software identifies shelf space fill rate and regular customers, and, of course, detects shoplifters.
Facial recognition software such as Face Recognition Complete can build a shoplifter database spanning the vast territory from Kaliningrad to Vladivostok. Such video analysis functions are used by a leading Russian food retailer X5 Retail Group at its major outlets.
Deep video analysis based on machine vision is the main development trend in contemporary retail. The current video analysis technology allows for differentiate between unique and permanent clients, visitors and employees. To those who often visit sales points, the system will recommend products by analyzing their previous purchases. Smart cameras can control the work of employees and issue fines and bonuses, and call suppliers. They also collect and analyze data by forming customers’ behavioral patterns, which means they can replace the entire marketing department with its promotional campaigns, discounts and gifts.
The current changes in retail might not be too perceptible, but are close to a revolution. Retail always reflects the state of society, which is now a digital community that demands advanced technologies and high speeds.
By Rustam Salimzibarov, Development Director at Macroscop video surveillance software company