The retail sector continues to evolve to become more digital, social and connected, a new report from Salesforce found.
The sixth edition of Salesforce’s “Connected Shoppers” report found agentic AI to be one of the significant drivers of retail’s continued evolution, with 75% of retailers saying AI agents will become essential by 2026.
But AI agents are far from the only thing changing.
The report found that physical stores are expanding as experience hubs and fulfillment centers that bridge digital channels, social platforms and physical shopping journeys.
According to the report, shoppers estimate 41% of their purchase volume will come from physical stores in 2026, down from 45% in 2024.
The report said retailers are transforming their stores more than shopping destinations, delivering elevated retail experiences. More than half (59%) of retailers now offer in-store services like customization and repairs, while 46% provide dedicated spaces for events and community gatherings.
New roles mean new responsibilities for retail associates
Retail location transformation means the stores’ roles are also changing. Traditional checkout duties occupy just 28% of retail workers’ time, while responsibilities such as store operations, customer service and fulfillment activities fill the remaining time.
As their duties expand, retail associates face mounting technological complexity. The report found new associates must master an average of 16 different systems they will use daily — up from 12 in 2023 — and spend 26 hours on technology training in their first month on the job.
AI, and agentic AI in particular, stands poised to ease the burden of retail associates because it makes information easily available and increasingly handles tasks independently. That’s why the report found retailers see AI as their No. 1 opportunity.
Unfortunately, the report also found AI implementation the top operational challenge. For that, high operational costs and disconnected systems, which slow progress, are to blame. Store associates feel the burden of disconnected technology — only 17% have access to a unified view of customer data, the report found.
Yet retailers remain optimistic on AI. The report found 89% of retailers expect returns on their AI investments, with similar shares reporting increased online sales volume and reduced operational costs.
Dig deeper: Salesforce Agentforce: What you need to know
Loyalty programs and social shopping are hot
Brand loyalty can be fleeting today, especially among younger shoppers. The report found retailers are responding to this challenge by reimagining customer service and refining their rewards programs. Eighty-four percent of loyalty program members say such programs make them more likely to repurchase.
Other findings about loyalty programs include:
- Two-thirds of retailers offer a loyalty program.
- 29% plan to introduce one in the next 24 months.
- The average shopper belongs to four loyalty programs.
- Gen Z is three times more likely than baby boomers to value exclusive experiences.
Social shopping is also booming, especially with younger consumers. More than half (53%) of shoppers discover products on social platforms — up from 46% in 2023.
Other social commerce findings from the report include:
- Nearly one-quarter of shoppers follow influencers for inspiration.
- 25% of shoppers buy through social media.
- 16% buy through messaging apps.
YouTube is the most popular social platform for product discovery, followed closely by Instagram and Facebook. Generation plays a key role in shaping habits, with 40% of Gen Z using TikTok for shopping discovery compared to just 4% of baby boomers.
The sixth edition of the “Connected Shoppers” report is based on a survey of 8,350 shoppers and 1,700 retail industry decision-makers. Data in the report are from two double-anonymous surveys conducted from Nov. 27 through Dec. 26, 2024. Respondents represent 21 countries across five continents. All respondents are third-party panelists.
Dig deeper: More consumers using genAI tools to research purchases: Adobe
The post As retail evolves, so too do physical stores and retail tech appeared first on MarTech.
# The Evolution of Retail: Advancements in Physical Stores and Retail Technology
The retail industry has undergone a remarkable transformation over the past few decades, driven by technological advancements and changing consumer expectations. From traditional brick-and-mortar stores to the rise of e-commerce and omnichannel experiences, retailers have continuously adapted to stay competitive. Today, innovations in physical stores and retail technology are reshaping the shopping experience, blending digital convenience with in-person engagement.
## **The Traditional Retail Landscape**
Historically, retail was centered around physical stores where customers would browse products, interact with sales associates, and make purchases in person. Department stores, shopping malls, and small local shops dominated the market. While this model provided a personal touch, it also had limitations, such as restricted operating hours, inventory constraints, and geographical limitations.
## **The Rise of E-Commerce and Its Impact on Physical Stores**
The advent of the internet revolutionized retail, giving rise to e-commerce giants like Amazon, Alibaba, and eBay. Online shopping offered consumers convenience, a wider selection of products, and competitive pricing. As a result, many traditional retailers faced challenges, with some struggling to compete with the efficiency and accessibility of digital platforms.
However, rather than replacing physical stores, e-commerce has led to an evolution in brick-and-mortar retail. Retailers have embraced digital transformation, integrating online and offline shopping experiences to create a seamless customer journey.
## **Advancements in Physical Stores**
Despite the growth of e-commerce, physical stores remain a crucial part of the retail ecosystem. To stay relevant, retailers have adopted innovative strategies and technologies to enhance the in-store experience.
### **1. Experiential Retail**
Retailers are shifting from transactional shopping to experiential retail, where stores serve as immersive environments rather than just places to buy products. Brands like Apple, Nike, and Lululemon have designed stores that focus on customer engagement, offering interactive displays, product demonstrations, and personalized services.
### **2. Smart Stores and AI-Powered Shopping**
Artificial intelligence (AI) is transforming physical retail by enabling smart stores equipped with advanced technologies. AI-powered chatbots, virtual assistants, and smart mirrors enhance customer interactions, providing personalized recommendations and real-time assistance.
### **3. Contactless and Cashless Payments**
The rise of digital wallets, mobile payments, and contactless transactions has streamlined the checkout process. Technologies like Apple Pay, Google Pay, and RFID-enabled payment systems reduce wait times and improve convenience for shoppers.
### **4. Augmented Reality (AR) and Virtual Reality (VR)**
Retailers are leveraging AR and VR to enhance the shopping experience. For example, beauty brands like Sephora offer AR-powered virtual try-ons, allowing customers to see how makeup products look on their faces before purchasing. Similarly, furniture retailers like IKEA use AR apps to let customers visualize how products will fit in their homes.
### **5. Automated and Cashierless Stores**
Retailers like Amazon Go have introduced cashierless stores, where customers can shop without traditional checkout lines. These stores use computer vision, sensors, and AI to track purchases, automatically charging customers as they exit. This innovation reduces friction and enhances convenience.
## **The Role of Retail Technology in Shaping the Future**
Retail technology continues to evolve, driving efficiency and personalization in both online and offline shopping. Some of the key advancements include:
### **1. Artificial Intelligence and Machine Learning**
AI and machine learning help retailers analyze customer data, predict trends, and personalize recommendations. AI-powered chatbots and virtual assistants improve customer service, while predictive analytics optimize inventory management.
### **2. Internet of Things (IoT) and Smart Inventory Management**
IoT-enabled devices and RFID technology allow retailers to track inventory in real time, reducing stockouts and improving supply chain efficiency. Smart shelves and automated restocking systems ensure that products are always available for customers.
### **3. Omnichannel Retailing**
Retailers are adopting an omnichannel approach, integrating online and offline experiences. Features like buy online, pick up in-store (BOPIS), curbside pickup, and same-day delivery provide customers with flexible shopping options.
### **4. Blockchain for Transparency and Security**
Blockchain technology enhances transparency in supply chains, ensuring authenticity and reducing fraud. Retailers use blockchain to track product origins, verify ethical sourcing, and secure transactions.
### **5. Robotics and Automation**
Retailers are increasingly using robots for tasks like inventory management, restocking shelves, and assisting customers. Autonomous delivery robots and drones are also being explored for last-mile delivery solutions.
## **Conclusion**
The evolution of retail is a testament to the industry’s ability to adapt to technological advancements and changing consumer behaviors. While e-commerce has transformed shopping habits, physical stores remain relevant by embracing innovation and enhancing customer experiences. The integration of AI, IoT, AR, and automation is shaping
Recent Comments