Where Retailers Should Make their Technology Investments in 2021 and Beyond

February 2021

Technological advances are creating unprecedented changes across consumer-facing industries. This report provides a holistic view of retail tech adoption, exploring technologies like artificial intelligence, the Internet of Things, augmented reality and automation. It identifies the consumer preferences influencing shopping behaviour, and the factors pushing industry innovation to understand where retailers should be making their tech investments in 2021 and beyond.

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Key findings

Tech increasingly woven into retail

With consumers reducing time in store due to safety concerns during the COVID-19 pandemic, the growing reliance on technology has become that much more apparent. Technological investments are being used to reinvent all aspects of the retail experience, including online discovery, digital payments, delivery and collection, and the in-store experience.

Spotlight: Online Discovery

One of the most profound changes unfolding in commerce is the digital shift, which has been accelerated by the pandemic. With consumers shopping online more than ever before, companies are seeking to improve these experiences, which thus far have focused on initiatives that are more foundational in nature.

Spotlight: Digital Payments

The pandemic prompted some retailers to adopt contactless options to reduce the risk of virus transmission, which included pushing the launch or expansion of digital payment options to help facilitate both in-store and online transactions. More futuristic payments experiences, which may use blockchain, virtual reality or virtual assistants, remain far off propositions.

Spotlight: Delivery and Collection

The last mile experience is facing its day of reckoning as e-commerce grows rapidly. Last mile reinvention has emerged as a top initiative for many retailers. Global retail professionals view both the ability of artificial intelligence (AI) and the Internet of Things (IoT) to improve fulfilment and logistics as promising.

Spotlight: In-Store Experience

The role of stores is shifting as more commerce moves to digital channels. While attention is currently focused on e-commerce, one third of global retail professionals surveyed believe COVID-19 will accelerate initiatives to enhance the in-store experience, too.


Key findings

State of Retail Tech

Consumers are more comfortable with tech-infused retail experiences
COVID-19 accelerated the digital transformation across retail ecosystem
Crisis put a spotlight on the power of technology across retail operations
Key areas of retail tech investment that will be explored in this report

Spotlight: Online Discovery

Crisis-inspired e-commerce boom expected to lead to a long-term shift
Most preferred online features focus on improved delivery and checkout
Top use cases have thus far focused on website’s foundational aspects
Virtual try-ons enable brands to enhance the online experience
Case study: IKEA continues to develop virtual shopping features
Using AR/VR to replicate physical experience shows the greatest promise

Spotlight: Digital Payments

Easy checkout is becoming fundamental to the e-commerce experience
Ease of use is the top reason consumers use digital wallets
Consumers abandon online purchases for delivery rather than payment
COVID-19 drives interest in contactless payment options
Case study: Visa reports surge in contactless payments usage globally
Futuristic payment experiences are viewed as long-term propositions
Virtual assistants have the potential to change how consumers pay

Spotlight: Delivery and Collection

Rise in e-commerce is forcing a reinvention of the last mile experience
Cost outweighs speed in terms of desired delivery features
Consumer spotlight: Chileans have strongest desire for click-and-collect
Tech products are the most common click-and-collect purchases
Case study: Best Buy staved off sales decline by adding kerbside pick-up
Almost half of consumers are open to robots or drones making deliveries
Consumer spotlight: Chinese most open to robotic or drone delivery
Case study: Meituan Dianping unveils robotic delivery in February
Delivery initiatives expected to gain more momentum in years to come

Spotlight: In-Store Experience

Despite the 2020 surge in e-commerce, stores will continue to play a role
Consumers see greatest value from checkout-free options
Virtual fitting rooms appeal to those who view shopping as an experience
Case study: AI-powered Fit:Match tech reduces need to try on clothes
Case study: SenseMi offers virtual fitting in store and online environments
Big city consumers are most open to in-store assistance from robots
One-fifth of retail professionals said crisis sped up in-store tech initiatives

Key Takeaways

Why retailers and consumer brands should invest in new technologies
When and where retailers should be making retail tech investments
Successful retail tech innovation comes down to these key factors


Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.

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