Transformation in the digital space has completely reshaped shopping, online experiences, and even customer expectations in physical stores. The COVID-19 pandemic’s disruption has turned the industry upside down, bringing with it unparalleled technological innovations.

It’s important to consider where these innovations are taking us next by identifying the technological trends that have guided us through 2020 and 2021 and will continue to pave the way for us in years to come. With our experience in software development, we have identified seven critical tech trends that will change the future of the retail industry for years to come.

Trend #1: E-Commerce-Friendly POS Systems

E-commerce has surged during the COVID-19 pandemic due to restrictions and fears surrounding in-person shopping. This has motivated business owners to optimize their e-commerce platforms in order to boost their online sales processes.

Unfortunately, lockdowns and health risks generated by the pandemic have resulted in a record number of retail closures in 2020. Many of these closures, such as Microsoft Store and Pier 1, have been permanent. Others, like JCPenney and Macy’s and have temporarily closed locations or reduced the number of open locations. However, some retailers like Walmart and Target generated great earnings last year.

A SaaS provider of a cloud-based ERP solution for retailers discusses the ever-growing demand for a fully integrated POS and e-commerce solution. Retailers need solutions that allow them to sell products online at the same level of efficiency, system integration, and customer satisfaction as in physical stores.

Simply having an online option and an in-person option may not be enough. Businesses will eventually need to synchronize these two domains with e-commerce and POS integration. This will allow them to best integrate online and offline transactions, inventory, and promotions across all in-person locations and online stores during and after the pandemic.

Trend #2: Machine Learning for Demand Forecasting

COVID-19 has greatly shifted customer demand in the retail space. Understanding how to predict and take advantage of these shifts is a vital component of staying on top of the industry.

Data is essential to the demand forecasting process. By using machine learning, forecasting customer demand becomes substantially more accurate. These innovations improve automatic demand forecasting, inventory planning, relationship management for both customers and suppliers, logistics, manufacturing, and marketing.

ML-based demand forecasting approaches are much more versatile and adaptive than their traditional counterparts. Since machine learning can be implemented much more quickly, it can better follow customer demand trends.

By optimizing demand forecasting systems with NLP and cascade models, short-term POS data, and recent data from external resources (exchange rates, market states, economic factors, and others), it’s possible to enhance demand forecasting accuracy. That is what makes ML-powered demand forecasting become a valued contribution to smart retail, as it helps prevent overstocking, reduce warehouse and logistics expenses, also lowering negative environmental impact, and supporting sustainable consumption and production.

Renowned companies like Amazon, American Eagle Outfitters, Asos, and Macy’s utilized machine learning in 2020 with great success. Amazon in particular takes advantage of machine learning’s potential for demand forecasting, using it to make their system and supply more efficient to meet shifts in demand.

Demand forecasting will remain relevant even after the pandemic comes to a close. Since customer behaviors and relationships with new shopping technologies have changed dramatically over the course of 2020, analysts believe that the landscape of retail has changed for the foreseeable future.

Trend #3: Virtual fitting rooms

Gartner predicted the rise of augmented reality to 100 million consumers by 2020 and were proven correct. In 2020, the customer conversion rate for AR engaged users increased by 90%. The potential of augmented reality in the retail industry in 2021 cannot be ignored.

Virtual fitting rooms are one of the most intriguing innovations in the retail industry that utilizes augmented reality. Since the “try-before-you-buy” approach is more difficult to manage while adhering to public health mandates during the COVID-19 pandemic, augmented reality is in a unique position to help customers make choices on products.


Where many other retailers saw losses in the face of the pandemic, Sephora saw great gains with its use of augmented reality technology in 2020. By using virtual fitting rooms, customers could ‘try on’ their products like jewelry and cosmetics with their smartphones. Other retailers, such as Kendra Scott, and Etsy are also utilizing virtual fitting room technology.

Since virtual shopping can be done on customers’ smartphones, ARKit is a vital part of building augmented reality apps in 2021. Apple’s LiDAR scanner has made its way onto the iPhone 12 Pro and Pro Max, meaning that more and more potential customers will have access to more advanced augmented reality experiences.

Trend #4: Data Science-Based Personal Interaction

Personalization plays a critical role in the success of the retail industry, with data science and machine learning being powerful drivers. Powered by these technologies, personalization’s ability to automatically craft tailored suggestions to consumers is essential.

Consumer desires are key to this technology trend in 2021. By using consumer purchase data to develop shopping profiles for certain types of customers, machine learning can adapt to each user to guide their shopping experience. Because of this, e-commerce stores have historically shown a greater degree of success with personalizing the shopping experience.

However, brick-and-mortar stores are not far behind. Bluetooth Low Energy and RFID technologies use minimal amounts of power that can help drive data collection from consumers that can be used to enhance retail personalization experiences.

With data collection, retail businesses must make sure to be aware of customer privacy. Treading carefully to stay in alignment with privacy protection laws can work in a business’s favor, as consumers may feel more comfortable trusting the company and be more likely to return.

NLP-driven chatbots have proven to be a major boon to e-commerce websites by providing a personalized experience for visitors. With chatbots able to better communicate with visitors, provide deals, recommendations, website navigation, and order tracking, businesses can save a great deal.

Trend #5: Staff-Free and Cashier-Less Stores

With social distancing still relevant for protecting public health in 2021, cashierless and staff-free stores are an important retail trend to consider. Shekel Brainweigh Ltd, a provider of weighing technologies, surveyed consumers to find shifts in shopping trends due to the COVID-19 pandemic. According to the results, 87% of customers preferred stores with contactless or self-checkout options.

To achieve this goal, RFID tags, computer vision systems, machine learning, IoT devices, and facial recognition can be utilized. Technologies like these were utilized in Amazon’s Just Walk Out system, powered by their Amazon Go Grocery model. In particular, the project took advantage of computer vision, sensor fusion, and deep learning. Amazon’s IoT network in the store tracks what consumers place into their cart. When the customer leaves the store, the store will automatically charge the credit card that the customer has on file.

In the future, health can be improved to reduce cross-contact in stores by reducing the use of touch by customers. Barcodes and QR codes can be scanned by consumers’ smartphones to gain additional information about items without having to touch them to inspect them.

Trend #6: Voice Commerce

Artificial intelligence and NLP continue to advance in 2021. With Google Assistant, Alexa, and Siri as the main frontrunners of the consumer voice assistant market, various improvements have been made by each to better serve customers. Their usefulness has transcended what was previously possible due to the fact that they do not require a screen, they need only to be able to recognize your voice.

With the United States expected to have more than 77 million homes with smart home devices in 2025, the voice commerce trend is proving to have serious potential for the retail industry. IoT devices in consumers’ homes, such as smart mirrors and smart displays can help deliver product content in non-intrusive and helpful ways.

Screens may not even be necessary. With voice commerce, smart speakers only need to hear the consumer’s voice and respond accordingly. Voice commands can help customers find products or even make purchases.

Walmart’s Voice Ordering service is a perfect example of this technology in action. By asking smart speakers to add products to a cart, they can place orders entirely by voice. Those items can then be made available for pickup by Walmart’s workers.

Trend #7: Robots and Autonomous Vehicles

Although traditionally in the realm of science fiction, robotics and autonomous technology have begun to show their relevance in the retail industry in 2021. Safeway, a supermarket chain, is pioneering a new driverless cart service to deliver groceries to local residents. Serve Robotics, formerly called Postmates X, is also developing a delivery robot for Uber. Walmart is also getting ready to deploy fully autonomous trucks for delivery orders this year.

Verizon and UPS Flight Forward announced in January that they will be working together to bring contactless drone retail delivery starting in a Florida neighborhood called the Villages. One of the key components of the technology is 5G connectivity, which allows better air traffic control for the drones to keep them from colliding.

Customer service robotics has also been improving this year. In January, Hyundai deployed a robot called DAL-e to a showroom in Seoul. DAL-e greets customers and helps them find the vehicle that’s right for them. DAL-e also can automatically detect when customers do not have face coverings and will advise that they wear a mask.

Another application of robotics in the retail industry is inventory management. Computer vision and machine learning play a major role in machines like SmartSight, which can identify misplaced items on shelves and notify staff when certain items are running low.

The Future of Retail: Opportunities in the New Normal

COVID-19 has proven to be an incredible challenge for the retail industry, but technology has brought a great deal of progress and improvement over the course of 2020 and 2021. Tools like machine learning, data science, computer vision, augmented reality, and more have shown that 2020’s challenges have been an opportunity for improvement.

If you’re ready to take on that opportunity and make your vision for bringing new value to your customers, MobiDev is the perfect fit for you with our retail software development services.

“Problems can be seen as opportunities, and 2021’s challenges for the retail industry are no different. Companies must adapt and use retail technology innovations to succeed in the market.

As technology advances, there are many new niches waiting to be monetized and opportunities to be taken. Digital transformation and data-centric cultures will continue to disrupt businesses that cannot adapt to rapidly changing customer preferences, new technologies, and supply chains. We must bring consumers experiences that they find engaging, accessible, and valuable. “

– Alex Vasilchenko, Lead Solution Architect at MobiDev with 6+ years of experience in retail projects.
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