A handful of retailer such as Target and Walmart, furthermore, are likely to use their deep war chests to build new technologies that will help the companies offer marketing programs and other services that can compete with those provided by e-commerce giants. Not surprisingly, Target and Walmart have already taken measures to compete against e-commerce and are continuing to build out new capabilities.
Walmart generated much attention with its $3.3 billion acquisition of e-commerce company Jet.com. More recently, Walmart and Jet.com have implemented associate delivery, which involves having store employees deliver customers' purchases on their trips home from work. The goal is to develop an economical alternative to traditional delivery services, which could be appealing when considering that the last delivery mile is usually the most expensive.
Target, for its part, has acquired Shipt, which is a same-day delivery company, for $550 million. Target is seeking to offer same day delivery for approximately half of its stores by the early part of this year and with the majority of its stores by the 2018 holiday season. Even though brick and mortar stores are losing market share to e-commerce, traditional retailers are still significant.
The Department of Commerce estimates that 91% retail spending still occurs at traditional stores, reports CMS Wire. The publication maintains that brick and mortar stores have potential for increasing their sales by embracing digital marketing and other cutting edge technologies.
Technology provided by RetailNext, for example, combines in-store and online data to help retailers provide customers with highly personalized shopping recommendations while Zenreach offers technology that makes it easier for stores to collect customer contact data.
Brick and mortar stores are also working to improve online access to store inventory. That way, customers can determine if they can buy something locally rather than wait for an item purchased online to be delivered. Stores are also likely to embrace artificial intelligence to make their operations more efficient and their shopping experiences more compelling for customers.
Last fall, a survey from SLI Systems found that more than half of retailers expect to use artificial intelligence in the future and that at least 20% of stores were ready to invest in artificial intelligence within the following 12 months, reports RetailDive.
Investors appear to be supportive of the concept. Just recently, Rubikloud Technologies, which provides artificial intelligence to retailers, raised $37 million. Its technology seeks to help stores improve marketing, in-store experiences, inventory management and other functions.
Other technologies may be developed to improve the overall in-store experience. For example, augmented reality could help shoppers scan shelves and find products with certain characteristics, such as vegan only ingredients, reports CMS. The same publication cites a Scandit study that found that 74% of shoppers believe that brick-and-mortar retailers at not fully utilizing shopping apps that can improve digital engagement with customers.
Some brick-and-mortar retailers, meanwhile, are reporting success with adding online sales. U.K.-based Superdry recently reported strong holiday sales with e-commerce increasing 31.6% while in-store revenue increased only 7.6%, reports the Retail Gazette. E-commerce sales in the U.S. were particularly strong.
