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7 Retail Technology Trends to Watch in 2021

Justin Honaman is a member of the RIS/CGT executive council.

At the start of 2020, as I put pen to paper for my 7th annual “Retail Trends to Watch,” I wrote:

“…the overall consumer ‘vibe’ is positive – in fact, very positive. The consumer feels good. The consumer is eating out. Shopping. Traveling. Investing. Smiling. Spending. Unemployment is low. Inflation is low. Trade agreements with China (and others) seem to be heading in a positive direction. The stock market is up (way up). There are many jobs – new and different kinds of jobs – in the market. Exciting, and yet makes me wary given the last time it all felt ‘this good.’”

Then, we were all asked to “work from home for two weeks.”

And, of course, the rest of 2020 played out amidst a global pandemic. “Vision 2020” will be unforgettable for reasons no one ever expected.

The coronavirus outbreak caused most retailers to temporarily shutter, keeping shoppers away, and forcing retailers to negotiate with landlords and suppliers to tackle unplanned inventory and liquidity issues. On top of that, the forces that pushed dozens of retailers into bankruptcy over the last several years remained present. We all have seen the shutdown and reopen charts and trends so no need to rehash. And, while many said they “couldn’t wait to say goodbye to 2020,” there are some that had a good, and even a great, year.

Looking ahead, we’ll call this Vision 2021. For those that survive and thrive, technology will be at the heart of all parts of the business. Not that technology wasn’t a priority in the past, but with the tensions fueled in 2020, technology investments will be a must for every retailer that didn’t already accelerate investments during the pandemic – from supply chain, e-commerce and store operations, to merchandising, marketing and shopper engagement.  

Last year, I defined two types of priorities, timely and timeless. Timely includes today’s priorities given reopening priorities, shifts in consumer preferences, technology available now, and technology efforts that “must” be accelerated to give the business a chance to grow. Timeless are new ways of working that, once implemented, become part of the ongoing fabric of running the operation: new solutions that modernize how we do business and enable long-term value creation, new multi-year organizational staffing models, mergers and acquisitions.

With this mental model in mind, let’s review the retail tech trends to watch in 2021.

a shelf in a store


Timeless.Seventy-one percent of retailers name “lack of real-time inventory visibility” as a top supply chain obstacle that reduces efficiency and productivity. For a retailer to be truly effective and successful, they must have a clear and accurate understanding of inventory. What product do they have on hand and where is it located in the supply chain (warehouse, retail outlets, in-transit, manufacturer)? And, most importantly, is this information accurately reflected in the inventory management system?

The shutdown and re-openings of 2020 exacerbated already faulty supply chain systems and processes for many retailers. Some turned stores into micro-fulfillment centers for e-commerce orders, leaving the shelves bare. Many stores had limited to zero visibility to available SKUs and locations during reopening. Overseas manufacturers shut down and reopened while the seasons changed, leaving gaps in inventory. In addition, inventory for Winter went unsold during lockdown, allowing no time for clearance. With Spring and Summer fast approaching, many retailers were impacted by supply chain issues with limited available inventory during reopening. To top it off, many retailers traditionally place holiday orders during this same period of time. Inaccurate inventory counts led to consumer frustration after orders were accepted, not filled, and ultimately refunded or canceled. When a retailer doesn’t have a product, has the wrong product, or even worse, doesn’t know if they have a product, they can’t sell it – and their shopper will go elsewhere to find it.

Another area that accelerated in 2020 and will continue in 2021 is the delivery experience, including the expectation of free shipping, same-day delivery, and hassle-free returns. Consumers are increasingly looking for fast and free delivery – and, increasingly, that means same day. And, they don’t want to deal with issues when not having a receipt, disputes over shipping costs, or the retailer having to “mail” a store credit vs email or stored value card in store. While same-day delivery is far from a new concept, expect retailers to find ways to make it work via fulfillment technology and new route to market options.

Bottom Line: Retailers will invest in the back and front office as related to supply chain, inventory management, distribution, track/trace, and delivery/fulfillment.

a person sitting at a table using a laptop


Timely. Facebook and Instagram accelerated the deployment of social media platform shop capabilities in 2020 as shopping shifted more significantly online. Shops are custom storefronts for businesses on Instagram and Facebook and allow social media users to easily buy products they see in social ads. Retailers and brands can build virtual shelves of products, run sales, and link ads on both platforms to their e-commerce site. With shops, Facebook is catering more directly to brands, and brands are shifting marketing spend away from traditional outlets such as TV, radio, and billboard to meet their shoppers where they are spending a significant amount of time each day.

This is similar to brands selling their products on other e-commerce platforms and marketplaces. Facebook and Instagram are creating a closed loop environment for the retail brand (or agency), enabling shopper insights, customized ad campaign elements, and targeted product placement in end-user feeds. Facebook and Instagram users can customize what content they see, and retailers can target their content to shoppers that have previously converted.

The business operations challenge that retailers face is how to integrate this data with their store and e-commerce data, as well as data from other third-party platforms. This is a back-office data challenge to be addressed in 2021! More on this below.

BOTTOM LINE:  Social shops (and ad platforms) are an opportunity to engage with shoppers, build relationships, and drive sales.

a circuit board


Timeless. Data and analytics are still hot and more important than ever, not only in the supply chain and demand forecasting space, but also in using customer insights to predict behavior. A good friend of mine leads retail analytics for one of the top global luxury retailers with locations in most major metropolitan cities around the world. As she shared with me last week, “Our executives are eager to know volume, store performance, and shopper trends in locations that are open. I am having to pull together data from multiple back-end operational systems because our North America data is separate from multiple other global back-end operational systems. And we are still largely on-premise vs. cloud. I then have to use BI tools to do light analytics and drop data into Excel and Access to run analytics, etc.” This is a retailer that is doing well financially, but has not yet invested in back-office analytics modernization. My friend’s scenario may sound familiar, as not every retailer has invested in analytics platforms and integrated data capabilities or has chosen to make it a priority. But analytics is becoming part of the fabric of the retail organization and this skill set will be part of every team – not its own disparate team in IT. For retailers with scale, a centralized data analytics team could be useful in fueling traditional BI, AI/ML, automation, and advanced analytics methods in the business.

What about IoT in stores or warehouses? Or even in-transit? Many IoT solutions rely on centralized, platform-based solutions to collect, store, and analyze sensor data from devices. Platform solutions built in the cloud require reliable, low-latency, high-bandwidth network connectivity and this is a challenge for businesses with assets in geographic locations that lack strong, reliable network connectivity. This is a bigger challenge when large data volumes must also be shared across the network. For edge analytics, a central cloud-based platform is critical to manage and develop the analytics applications and models based on populations of devices, which when deployed at the edge, are customized for the specific instance and scenario. Edge analytics allows for the ability to run a variety of machine learning, predictive and prescriptive models that require a more powerful compute environment. Many retailers are working through modernization efforts – migrating workloads to the cloud – and as such, edge analytics is a near-term real opportunity.

Bottom Line: Expect analytics platforms, tool, and people upgrades as retailers look to play catch-up in more effectively using data that they have been only collecting and storing. Expect workloads to shift more quickly to the cloud vs. on-premises.

a woman wearing sunglasses posing for the camera


Timely. Having a full picture of the customer, or creating a shopper “golden record,” enables retailers to more effectively market relevant products and services, personalize communications and rewards, and offer customized deals and benefits to build loyalty. While this has been a hot topic for a number of years, the challenge in bringing it to life is tracking a shopper throughout the entire customer journey – when they are navigating -ecommerce sites, shopping your site, walking your store, chatting with your virtual agent, etc.

What has changed and evolved are the varying types of consumer/shopper data available to retailers to consume, harmonize, and use. No longer is it just syndicated data houses offering consumer insights, but now major ecommerce and social platforms are serving up shopper data that retailers can use to plan campaigns and ad spend, drive new customer growth, and plan for conversion across channels.

I’m still surprised that, despite shopping at several retailers regularly, being part of their loyalty programs, shopping online and in store for several years, and registering for their credit card, many retailers do not market personally, intentionally, and directly to me. I receive the standard “twice-yearly sale” offers and “always on sale coupon codes” and I am never recognized, rewarded, or recognized in store. Even further, consider the grocery and drug category, where several of the major players have loyalty cards with troves of shopper data, presenting a huge opportunity to personalize the customer experience and improve the relationship.

Bottom Line: While the phrase “customer 360” has been in the market for years, new definitions and ways of building a customer profile are evolving as data sources and cloud-based integrated data platforms evolve. Expect retailers to continue to test and learn.

a person standing in front of a refrigerator


Timely. Take a quick drive and check out your local legacy, monolithic mall or even the new outdoor walking entertainment communities (live, work, play) and you’ll notice the many empty storefronts. In the near-term, this is an opportunity for digitally native, direct-to-consumer retailers like Warby Parker, Bombas, Glossier, and Bonobos to take advantage of lower rents and engage in store with their traditionally digital shoppers. Going into the pandemic, real estate experts predicted 1,000-plus stores would be opened by digitally native brands in twelve months.

In 2021, look for retailers to take advantage of lower rents to engage in store with their traditionally digital shoppers.

Bottom Line:  Digitally native brands have a unique opportunity to test physical stores in 2021 with plentiful and prime commercial real estate options available globally.


Timeless. As retail organizations shift workloads from on-premises to the cloud, security of data, applications, and other elements managed by the retailer will continue to be a priority and in focus. The rapid expansion of emerging technologies that enable new capabilities and provide on-demand services adds to the security risks that threaten retailers’ businesses. Rapid business expansion can mean retail organizations struggle to identify who has responsibility for an individual process when it is threatened.

As attack surfaces continue to widen across systems, devices, people, partners and infrastructure, it’s evident that embracing technology as a key driver of growth can amplify opportunities for complex cyber-attacks. As the industry has seen over the last two-three years, retail business and security leaders are increasingly focused on interlocking security strategy and cyber defense capabilities to strengthen business resilience and brand trust that are essential in today’s retail environment. Retailers must establish comprehensive threat protection that takes into account customers, employees, contractors, partners, applications and systems. Think beyond the perimeter firewall to secure cloud, mobile, and IoT operations and data wherever it resides. And, keep in mind that while the cloud providers secure the cloud, it is up to the retailer to secure data and applications in the cloud.

Bottom Line:  To enable all of the above and more, modernizing the core, pursuing a journey to cloud, and deploying resilient security protocols will be a priority in 2021.

a person standing in a room


Timely. With reopening comes the return to the office. Return to meetings. Return to the airport and travel. Return to conferences. Return to new ways of working together in new venues. Return to gatherings. Return to parties and social events. The list goes on. While we may not need a closet full of new clothes, this presents an opportunity for retailers looking to ensure their shoppers “look great” in returning to work and play. Most of us haven’t worn our business and play attire in nearly a year and will be excited to shop for a new wardrobe and work essentials. Watch for retailers to jump into this unique, timely marketing and sales opportunity as the COVID-19 trend lines improve.

Bottom Line:  Shoppers will be eager to renew and restock as the economy opens up – especially when retailers “visioncast” (aka train) shoppers that it’s time to reopen the wardrobe for business and get out of the yoga pants and golf shirts.


Each year, I highlight the “hot” buzzwords across the technology and consulting-vendor-partner-sphere. This year’s highlights are: digital transformation, digital core, modernization, AI and Machine Learning, cloud migration, chatbots, Intelligent Automation/RPA, microservices, customer 360, control tower, agile, store of the future, and scaling.

And, for the work-from-home crowd, I bring you these buzzwords and phrases that made their way into Buzzword Bingo in 2020/2021: “Can you see my screen?” “My Wi-Fi is not working … weak signal b/c my spouse is working and my kids are doing online school,” “Every week is four Mondays and a Friday,” “I think you are on mute,” “Sorry, I was on mute,” “Sorry, my dogs are barking,” “Let’s give everyone a few minutes to join,” “Your screen froze,” and of course, “Smile everyone so I can grab a screen shot for social media!”