Retail is Rapidly Changing: How Technology is Shaping the Future

In 1958, the Green Shield Stamps loyalty scheme was introduced in the UK, where customers received stamps for every 6p spent, redeemable at Green Shield Stamp Shops. Tesco was one of the biggest adopters of this programme. By 1995, Tesco had launched its own Clubcard, replacing physical stamps with data-driven personalisation. Today, with over 21 million active households participating in Clubcard, every purchase contributes to customer insights, allowing Tesco to offer tailored rewards and promotions with maximum marketing impact.

This shift demonstrates how data-driven decision-making has transformed retail. Buying patterns, customer preferences, and market trends now shape retail operations, from inventory management to order processing. Retail has become an incredibly efficient and well-oiled machine behind the scenes, but there is still a long way to go in refining the customer experience.

In 1966, MIT professor Joseph Weizenbaum created the first chatbot called ELIZA. It was cast in the role of psychotherapist. Users would type a message on an electric typewriter connected to a mainframe, and after a ‘moments thought,’ the bot would respond.

The example conversation that was published went quite simply:

Input: Men are all alike

Chatbot: In what way

Input: They’re always bugging us about something or other

Chatbot: Can you think of a specific example

Input: Well, my boyfriend made me come here.

Chatbot: Your boyfriend made you come here

Input: He says, I’m depressed much of the time.

Chatbot: I’m sorry to hear you are depressed.

The software is relatively simple, and some people might be forgiven for thinking they are talking to the same level of programming when they hit a poorly designed chatbot that doesn’t help them and merely frustrates them before transferring to a human, but the right chatbot implemented in the right way have started to make significant improvements to the retail experience.

24/7 Support: Chatbots give customers the ability to gain assistance whenever they need it. Not just when a store is open or the hours that customer service workers are available. Routine inquiries, such as checking product availability or tracking orders, can be handled by a chatbot. Freeing staff time while giving customers an immediate service.

Personal Assistance: Chatbots can harness shoppers’ data and preferences to provide personal recommendations that rival in-store support. The customer can enjoy a tailored shopping experience both in-store and at home.

Massive Scalability: Chatbots can handle all customer interactions simultaneously, with a suitable knowledge base, ensuring consistent service levels no matter how busy the business is. This is crucial for retailers, allowing for help during promotions, busy holiday seasons and general high-traffic times.

Data Collection: The data inputted into a chatbot gives more details about frequent customer interactions, preferences and routine questions. Retailers can use this data to gain insights, allowing them to refine their offerings, tailor marketing strategies, and change the customer approach and education to reduce the number of customers seeking answers to the same question.