Drones, bots and virtual stores: How your pandemic shopping boosted new trends in retail

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The coronavirus decimated the retail industry in 2020 — but also fueled dramatic advances in new technology. From Walmart’s self-driving delivery trucks to American Eagle’s virtual stores, the retail industry has advanced several years in just nine months, experts say.

“The acceleration of the customer toward digital capabilities has been unlike anything I’ve ever seen,” Shelley Bransten, Microsoft’s vice president of global retail and consumer goods, told NBC News.

But while drones and autonomous vehicles may catch shopper interest, they may not be the technologies that are here to stay once stores open up again. Instead, curbside pickup, stores with a smaller footprint, and personalized shopping fueled by artificial intelligence may all become a regular fixture when it comes to shopping in the post-pandemic era, industry watchers say.

“The pandemic has changed how we interact with stores, and consumers will prefer a physical-digital hybrid model once the world is back to normal,” Kristen Gall, president of of the cashback website Rakuten, told NBC News in an email.

The pandemic has sped up the shift away from storefronts to online shopping by roughly five years, according to IBM’s annual U.S. Retail Index, released in August. Department stores are expected to decline by more than 60 percent this year, while e-commerce is projected to grow by nearly 20 percent in 2020, it said.

Outdoor retailer REI is one brand that has followed its shoppers to online platforms. Known for its bike assembly services, the company launched a virtual outfitting service this summer that enabled customers to schedule a free online appointment with an agent who will walk through how to assemble a bike or find the right fit for hiking boots or talk through outdoor gear for an upcoming camping trip.

“As e-commerce is becoming a bigger piece of most of the bigger brands’ businesses now, you’re getting that critical mass online and they will say, “How can I invest in these new capabilities?’” Bransten said.

As retailers capture more data about customers online, AI tools become more sophisticated. For instance, CVS Pharmacy told NBC News earlier this month that it uses data from its loyalty program, ExtraCare, to analyze individual baskets, amount spent, shopping frequency and categories a consumer shops. Nordstrom said it used its customers’ wish lists to understand popular items for its annual anniversary sale and adjusted in real time to customer demand.

“Consumers can expect a more personalized experience that is more tailored to what they’re looking for,” Bransten said.

Information collected through online shopping might also mean shoppers will begin their customer service journey with a robot so sophisticated it acts like a human being. With a chat bot in place, about 30 to 50 percent of customer inquiries are resolved, said Steve Laughlin, IBM’s general manager for the global consumer industry.

IBM’s Watson Assistant, an AI-driven customer service agent designed to sound and behave like a human, had already been widely adopted in the financial and telecommunications industries Laughlin said. But with the pandemic straining retailers’ bottom lines, IBM saw an uptake in the service among retail companies.

“Ultimately, certain shoppers’ concerns about even returning to stores for pickup showed an urgent need for AI automation,” he said. “When everything started to happen, we had a whole lot of clients that became interested and were able to adopt this solution very quickly.”

Even with a vaccine on the horizon, retailers are preparing for a new normal where store space becomes less valuable and online integration continues to boom, Bransten said.

“We’ve never seen a time like this before. We will see entirely new revenue streams,” she said.

Leticia Miranda

Leticia Miranda is a business reporter for NBC News.

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