2 min read time
March 12, 2019

Over the past few years, there has been a lot of talk about digitization of retail – self-service stores, smart shelves and carts, as well as advanced data analytics. Experts predict that by 2020 about 85% of all transactions will be performed using artificial intelligence. Still, traditional commerce is not going to disappear from the market, which is proven by the growing popularity of the ROPO model (Research Online, Purchase Offline). Julia Medvid, Commerce Industry Lead at ITMAGINATION, talks about key performance indicators for retail in the fierce battle for competitive advantage.


According to the U.S. Department of Commerce research, global online sales grew by 300% in 2018, and traditional retail trade has dropped by nearly 50% since 2000. This does not mean, however, that it will disappear completely and customers will use the internet only. Shopify, a store software development company, predicts that over the next three years retail will be responsible for 82% of sales. A study carried out by the British agency PushOn, on the other hand, showed that over 80% of buyers would rather visit a store and make a physical purchase, because they see it as more secure, especially when it comes to expensive goods.

However, retail is changing dynamically all over the world. According to a research by advisory firm KPMG, over 50% of buyers expect vendors to not only offer shopping, but also be omnichannel: the brand and its products should not only be present in various channels, but also provide comprehensive service in each of those channels. For example, 40% of all respondents to an Euclid study would like to get a discount code for a smartphone for their next visit to the store, which demonstrates their preference towards multidirectional interaction. Here, personalized e-coupons are the perfect solution. This year, Forbes noted a growing popularity of the ROPO model (Research Online, Purchase Offline). Consumers check offers in more and more detail and compare different brands online, and then purchase them at a retail outlet. According to research by Google and Ipsos, 75% of users look up information about a product online before physically buying it in a store. Which, however, does not change the fact that e-commerce is growing. In Poland, almost 3/4 of online store owners declare their revenues increased in 2018, and the growth exceeded 50% for one in every eight of them – says a Multiwyzwania report made by Shoper.

New sales success indicator

In the face of fierce competition on the market, customer experience and customer journey have become extremely important. All retailers strive to show their products in the best possible light and thereby stand out from competitors. The economy of experience, which is a new direction of development of the retail sector, sets a new measure of success! It is now determined by "customer experience per unit area". Traditionally, the primary unit of measure for retailers was the "number of sales per unit area". But today, stores are no longer just points of sale, but also consumer experience centres, which is why companies keep verifying metrics they use to evaluate their sales results. According to the study “Customer 2020: What Lies Ahead for Retail?” conducted by a consulting firm Walker which specialises in studying customer analytics, by 2020 loyal consumers will be the main competitive advantage of every brand and the price and product offered will be less and less relevant.

Artificial intelligence is on the rise

In 2018, the potential of artificial intelligence (AI) started to be used on a large scale. Some managers say that, by 2020, about 85% of all transactions will be carried out with AI. In 2016, a research and consulting company Gartner predicted that, by 2020, 85% of customer interactions will take place without human intervention. The transition to the use of artificial intelligence has already become common today. Chatbots are at the forefront, and intellectual voicebots are used more and more, for example in customer service or recruitment. At ITMAGINATION, we are also working on a tool like that for a client employing over 10,000 employees, for the purposes of handling further recruitment. To optimize costs, the preliminary recruitment call with each candidate will be carried out by an intellectual voicebot. Importantly, according to a research firm Research&Markets, by 2022 expenditures of the retail sector on information and communication technology will reach USD 5 billion, and by 2035 its use will increase the profits of retailers around the world by 60%.

The new "digital retail" reality

Digitization of retail has already significantly reshaped customers’ attitude and approach to shopping, and its impact will become decisive going forward. And here a question comes up: does the existing technical potential correspond to the increased consumer expectations? Paul Wiessmann, head of the American KPMG Media and Telecommunications Sector Group, said: "Technology has become so firmly embedded in our daily lives that instant access to information is considered to be the standard". Thanks to new technologies, the market is now controlled by consumers. Applications such as Snapchat, WeChat, WhatsApp, Instagram and others only confirm that we are getting closer to the point where all events will take place in real time.

The development of technology, and, consequently, of the individual industries, has led consumers to expect instant results "here and now", which determines their expectations and places a lot of stress on the retail trade. According to a report by Salesforce.com, 64% of consumers expect instant response from companies, and with the development and improvement of technology the need for speed is even sharper. At ITMAGINATION, we have developed a real-time data analytics platform – Behaviolytics®, which prepares a customised offer for the customer (next best action, next best offer), available on his or her smartphone "here and now". Applications based on that platform respond to customer’s current needs and expectations, regardless of the channel chosen. In addition, they are supported by the use of Power BI, the best business analysis tool on the market, developed by Microsoft, which has been recognised as a market leader by Gartner Magic Quadrant (MQ) for the 12th time in a row.

According to a research company Demandware, 24% of users who click on products in the "featured" category, place orders more often. These same customers bring 26% of profits to online stores around the world. The battle for customer loyalty and satisfaction, and hence competitive advantage and higher profits, will be won by companies that can offer consumers effectiveness, instant results, individual approach, authenticity and availability. Retailers who can fully exploit the potential of artificial intelligence and machine learning will be able to predict demand and influence brand loyalty at the right time, which means in real time.