Technological trends and innovations in retail

2024

Technological trends in the field of digitalization of retail

The main technological trends that experts talk about are interviewed: TAdviser the introduction of,, AI- machine learning IoT technology,, computer vision solutions to counter cyber threats, as well as the development of their own - IT competitions. retailers

In 2023, AI became increasingly important in retail. Simple tools such as chatbots and RPA have already become standard, and more complex solutions based on machine learning and neural networks are gradually being introduced into operations. In the future, AI will be used for forecasting, creating digital assistants, processing OSA signals, etc.

Maxim Semirenko, Deputy General Director of Imredi:

Now we are working out the introduction of more complex tools into operational activities. While the concepts are being worked out at the level of ideas and pilots in headquarters and test stores, but the forecast for the coming years is that technologies using machine learning and neural networks will be integrated into the daily work of stores and employees. A boom in artificial intelligence is coming in terms of forecasting, using digital assistants, tips and insights for store managers, processing OSA signals not only in the store, but also connecting collaborations with suppliers and merchandising.

AI helps to multiply the analytical capabilities of operating CRMs: customize predictive analytics in sales, personalize marketing activities, automate the work of the service center.

It takes time to innovate on AI. And the results do not always meet business expectations, since for success it is required that the company has a well-organized work with data and have highly qualified teams of specialists.

Gennady Tarantasov, Commercial Director of Korus Consulting Group: {{quote "Large retailers continue to develop their own IT competencies, recruit teams and create their own IT companies, which in terms of the number of employees and the amount of expertise can be compared with the leaders of the IT market. Additional demand for IT solutions from retail is induced by the state - for example, rules appear on mandatory labeling, the introduction of electronic document management, the creation of tax storefronts, etc.}}

According to Gennady Tarantasov, the demand for data tools is growing: companies are learning to profit from them, and increasingly come for Big Data, Master Data Management, Data Governance solutions. Demand will increase in 2024 as companies seek to optimize jobs and empower employees to use all the data they need.

According to Alexei Vedeneev, in 2024 there is a significant increase in state regulation. The creation of registers of domestic software and accredited IT companies benefited the market. A thorough analysis requires the initiative of the Ministry of Digital Development to introduce, by analogy with the automotive industry, a "utilization fee" for foreign IT equipment, which has Russian analogues.

Alexey Vedeneev, First Deputy General Director of Luxe Retail:

It can be predicted that if such a measure is implemented, import cash desks, data collection terminals, barcode scanners and other types of retail equipment will significantly increase in price. But whether costs in the production of domestic analogues will decrease at the same time is a big question. After all, the component base in most cases is imported from the outside, and the orientation of the cost of local goods to global ones takes place. Perhaps Russian manufacturers of cash registers will benefit from the rise in price of Chinese equipment, but the winnings will be paid from the budgets of Russian retail chains.

In 2024, it is expected to increase the use of IoT technologies, computer vision, solutions to counter cyber attacks. The implementation of import substitution road maps will continue.

Galina Mussina, Head of the Competence Center for Retail at ICL Group of Companies:

In many ways, the trends of last year will continue. We also expect to see more active use of IoT technologies, scaling of solutions using computer vision, development of solutions to counter cyber threats. The implementation of road maps for the implementation of import substitution and the construction of an import-independent infrastructure will continue. The return of key Western players to the IT market in Russia is seen as less likely.

It is hoped that this year in retail Russian IT solutions will be "run-in," business processes will stabilize, and the market will go into a calm mode, and domestic technologies will go into growth.

Alexander Zarzhetsky, Head of the Directorate for the Implementation of Integration Projects 1C-Rarus:

I hope to stabilize the digitalization market: I think that neither trading enterprises nor consulting companies will withstand another 2023. This year, most Russian decisions will be "run-in-battle," the business processes of trading enterprises will stabilize and work will turn into a calm rhythm. We coped with the challenge that brought 22-23 years and the rapid growth of domestic IT technologies awaits us.

Gas station networks are actively adopting the best practices from grocery retail. This means creating a fast and convenient cash infrastructure, self-service areas, improving loyalty programs, more efficient accounting for commodity movements and digital sales management.

Drivers of the development of IT infrastructure in gas stations are factors such as a decrease in the share of revenue from fuel sales, the vital need to expand the non-fuel range, the desire to get away from the narrow image of "gas stations," turning gas stations into attractive points of recreation and shopping, finding ways to increase sales through collaborations with companies from other industries, testing additional services not related to the sale of fuel.

Some trends 2024:

• A steady trend for real-time-marketing and omnichannel for effective interaction with customers remains.

• Software based on low-code technologies is becoming more and more relevant, reducing time-to-market. It can be quickly customized and customized without deep IT competencies.

• Personalization and robotization are important trends in digitalization.

• Contactless payments, loyalty systems and predictive analytics are expected to grow in popularity.

• The trend for 2-in-1 devices remains - acquiring + cash desk. This format has already been successfully used in delivery and e-com.

• The trend towards the introduction of self-service technologies may soon spread from grocery retail to fashionable. This segment already has its pioneer, which launched a pilot project last summer. If the experiment is recognized as successful, a full-scale implementation will follow, and the rest of the players will follow the market leader.

• Electronic marketplaces will continue to grow at a faster pace, although not the same as in recent years. All retail chains have electronic stores, their efficiency depends, among other things, on IT: 24x7 availability, quick search and page updates, etc.

• In e-com, there is a gradual "whitewashing" of small online stores that used to work "in gray," the cloud fiscal market is growing.

• In 2024, a mandatory check of marking codes at the checkout is gradually introduced. Last year, retailers and vendors introduced and rolled out technological solutions for this. This functionality now helps retailers to better control sales, product balances, delinquency and reduce costs.

Dmitry Radyukin, Director of IT Solutions Practice for Retail Companies Odyssey Consulting Group:

Most companies have already reached the peak of the development of physical stores, so now retail is concentrating on digital sales channels: online stores, mobile applications, the sale of supplier goods on its online sites according to the "marketplace" model. Companies also strive to enter new countries, and this exit usually also begins with digital retail - basically, an online store for a local audience and several points of sale immediately appear. In general, this strategy can be called Digital First.

Promising technologies and innovative projects

What will be the driver of development on the part of information technology? Most of all hopes, as elsewhere, for artificial intelligence, but whether it will live up to them is a question that worries many.

AI can be used to solve key problems in retail, for example, to predict the absence of goods on shelves and optimize the work of personnel.

Dmitry Radyukin, Director of IT Solutions Practice for Retail Companies Odyssey Consulting Group:

First, companies no longer have enough omnichannel. Most of them think about creating an "endless virtual" shelf in retail stores, so they implement a phygital format. Secondly, more often they turn to AI to solve problems related to the processing of large amounts of data and routine operations. For example, analyzing text feedback from customers using text recognition or call center calls using speech recognition. Content for marketing promotions and other activities is increasingly collected (generated) by generative AI.

Maxim Semirenko, Deputy General Director of Imredi: {{quote 'Together with our customers, we are working on the use of artificial intelligence in the most painful points of retail. For example, making the item available on the shelf. Today, the buyer is demanding if the shelf does not have the necessary goods, he easily goes to the "next door" to the competitor. Predicting problems and working with OSA signals based on machine learning is one of the most promising approaches. It allows you to literally save millions and tens of millions of rubles in sales every week. In human resources, it is about predicting employee requirements, implementing flexible schedules and short shifts that are used not only to optimize planning plans, but also for dynamic (situational) execution of the plan and load balancing, taking into account planned and unplanned events.}}

According to Maxim Semirenko, the fastest growing segment in offline is hard discounters. It is focused on the trend of economy in consumer behavior, which is characteristic of the whole world. Discounters work according to the EDLP (every day low price) model. Traditional networks are forced to respond and move from the usual "game" with promotions to a hybrid model. This requires competent planning of both regular prices and promos, correct forecasting of their impact on sales volume and consumer preferences.

These are technologically difficult tasks, and the advantage will be given to companies that fully use the capabilities of artificial intelligence, including recommendation models and mechanics. Due to the dynamism, complexity of the market, there seems to be no alternative to this path. All those algorithms that have been accumulated and configured in excel and scripts must now be strengthened by the capabilities of the recommended ML models and AI.

Already, neural networks can predict demand and more efficiently make purchases from suppliers. In the future, many routine operations will be given to AI.

Alexander Zarzhetsky, Head of the Directorate for the Implementation of Integration Projects 1C-Rarus:

An interesting technology to be mastered is the use of artificial intelligence for the daily work of retail enterprises. I don't remember a single technology that would penetrate our lives at such a speed. Neural networks can already predict customer demand and make orders to suppliers more efficiently than experienced managers or commodity experts. In the very near future, they will take over the main "routine" of retail stores: from ordering goods to recommending customers at the checkout. People will remain the mission: control and business development. Although they are already learning to control and improve the business of neural networks.

Most market players in one way or another conduct projects to introduce AI systems into business processes. Someone is already reporting on the introduction of technologies into work. But most likely, most of the results of these projects will be known in the second half of 2024.

Vyacheslav Predybailo, Director of Industry Solutions at Evotor:

The excitement around AI also affected retail, but this technology requires significant investments in competencies, personnel and infrastructure. So far, the first swallows are the use of AI in advertising, in terms of service and support.

AI products are being tested that allow you to personalize communication with customers. These can be targeted consultations, intelligent search for goods and other functions aimed at improving the purchasing experience.

Partner of the Digital Economy League Sergey Tinyakov:

Companies that work in retail are increasingly paying attention to artificial intelligence. The Digital Economy League is currently testing several products in this area for our customers. They are designed to personalize communication with customers, it can be, for example, targeted advice from buyers, intelligent search for goods, but so far all this is under development.

New opportunities for retail open up machine vision. The technology can be used to combat theft and fraud, analyze demand and marketing efficiency, etc.

Galina Mussina, Head of the Competence Center for Retail at ICL Group of Companies:

We see great opportunities to use the technology to improve the purchasing experience, combat theft and fraud, analyze and predict demand, analyze the effectiveness of marketing, transform small stores into "stores without sellers," optimize the placement of goods, and ensure quality control of goods. We are successfully working on a number of projects to use AI technologies from these areas with our customers.

There is a possibility, and this is evidenced by the examination, that in the near future the excitement around AI will subside. Their small impact on IT sales is noted.

Sergey Mashnin, Customer Relations Director, Ferrum IT Group: {{quote 'The greatest hopes, I think, are pinned on artificial intelligence. But not everything is clear here. Gartner, for example, noted the small impact of AI projects on IT sales. And he placed the popular generative AI at the top of his latest hype curve, that is, a period of "disappointment" in GenAI awaits us. However, in parallel with the "disappointment" there may be projects on the real implementation of AI, so in the coming years AI can "play." As for innovative projects, there are many of them. Which of them will turn out to be really innovative, and which - "erroneous," will be found out only after their completion.}}

Anything else but AI?

As for other trends, BPM platforms, experts say, are solute to end-to-end management. They allow you to combine key systems of the company, which ensures the aggregation of information about customers and business processes. On this basis, management decisions can be made more efficiently than before.

Yuri Vostrikov, CEO of BPMSoft (part of the LANSOFT IT holding):

Among the promising ones, I would highlight first of all BPM platforms. Their main superpower is the ability to combine the key systems of the company with an end-to-end process. It turns out that all information on customers and business processes is aggregated in a single system. Then end-to-end analytics is prepared on the basis of which management decisions are made, zones for improvement are recorded, efficiency is assessed.

Work on splicing offline with online is very promising. The first implementations can be expected in the very near future.

Alexey Vedeneev, First Deputy General Director of Luxe Retail:

The most interesting thing is the digitalization of shopping experience, merging online and offline technologies, bringing together the pleasures of entertainment and shopping by simplifying and speeding up the purchase process... digitalization of the consumer path, erasing the boundaries between physical and virtual retail - this is a future that is beneficial for everyone. Work in this regard is very promising, both Russian and foreign companies are conducting them, and the first results can be expected on the horizon of two or three years.

Electronic price tags have taken root in European retail chains. There are many advantages from their use: less costs for printing paper price tags, less hassle for employees to replace price tags, redistribution of their efforts to display the assortment, more attention of customers to specific goods on the shelves due to color indication, larger average check size, faster purchase process, calmer cashier's work. If one of the major Russian retailers successfully introduces the technology in 2024, this will certainly actualize interest in the market.

Dmitry Rybakov, CEO of Consid:

Unfortunately, today domestic IT companies focused on import substitution of traditional IT systems are not yet able to generate, invest in development and offer the market any revolutionary solutions.

Retail about innovation

According to Sergei Sergeyev, Director of Digital Innovation and IT "Lenta," the most promising for retail are solutions in the field of logistics and trade, video analytics tools that can improve the shopping path and reduce losses.

A number of client projects have been successfully launched and are under active work: the one-touch cashless payment service "Lenta Pay" (self-service cash desks), RPA technologies can reduce the number of routine operations. Lenta's internal processes are supported by pricing and HR electronic document management systems. Complete automation of HR functions - mobile application "Lenta Sputnik." By implementing a new SRM solution, the P2P project streamlines and automates non-commercial procurement processes.

Oleg Lexin, head of the Fix Price IT service, believes that the most promising technologies are those that help save resources in the labor force: the crisis in the labor market negatively affects many companies. One of the priority areas, in his opinion, is video analytics.

Voice robots, computer vision are the most promising areas whose capabilities have yet to be mastered. They help not only reduce the need for personnel, but also improve the quality of client service, the accuracy of analyzes and forecasts, and reduce the number of errors, the expert shared.

On the basis of the AI Laboratory (joint project X5 and ITMO), it is planned to create a geodata analytics system, a multi-camera buyer path tracker for optimal CVM, a model of generative networks for working with customer reviews in online and offline environments for working with NPS and sales, creating a store model for processing cases according to the principles of A/B testing. Students will create product MVPs.

According to Ivan Melnik, Director of Technological Business Development at Kh5 Tech, the crisis in the labor market is very affecting the future of technology. The fewer workers there will be in stores, warehouses, the fewer managers, the more the demand for robotization and decision-making with AI will increase.

Large-scale robotization of distribution centers in the Russian Federation is a very real task, there are already examples in the world. We hope that in a few years Kh5 will begin to appear the first fully automated warehouses, - the expert shared.