Retailers are focusing on core technologies not “shiny objects” like augmented reality and virtual reality that are unproven, according to a new report from Forrester Research Inc.

When it comes to technology budgets for the next year, retailers are focusing on getting the basics right,  and not on “shiny objects” like augmented reality and virtual reality that are unproven, according to a new report from Forrester Research Inc., “Hot or Hype—The most important retail technologies for 2017.”

“Despite many vendors pushing next-generation digital solutions, retailers are cautious about getting too far ahead of customer expectations,” the report notes. Omnichannel, personalization, analytics and digital store technology will be at the core of this year’s retail investments as digital leaders keep an eye out for case studies and ROI with the newer tech offerings, Forrester says.

For instance, 72% of global professionals note “personalizing the customer experience” as a major opportunity to improve in-store experiences, according to Forrester. And, many note that they need help in this area: 53% of digital professionals say they lack the right technology to personalize experiences.


When it comes to how digital businesses personalize, 75% personalize website content, 55% do so on promotions and product offerings, and 49% do it on product recommendations (the top three answers). 60% use web content management to help them achieve their personalization goals, 53% use email marketing and 51% tag management.


Online companies also are investing in omnichannel, as consumers have high expectations that they will be able to easily move from a retailer’s stores to its web and mobile channels and back. The Forrester report notes that 79% of adults shopping online who use “reserve online, pay and pick up in store” and 74% of online shoppers who use “buy online, pick up in store” expect to be notified within two hours that their order is ready for pickup.

As for emerging and buzzed-about technologies, retailers may test chatbots and artificial intelligence (AI) as sales tools but are unlikely to heavily invest in such technology. 42% of business and tech professionals who have no plans or are not ready to invest in artificial intelligence say there is no defined business case for AI investment. Additionally, while retailers overall agreed that chatbots have potential to improve customer experiences, few consumers use chatbots and the technology is in its very early stages, Forrester says. In 2016, only 4% of digital business pros used chatbots, the report says.

“Many retailers we spoke with doubted that customers would demand this type of automated interaction anytime soon, but some retailers shared they would be piloting (chatbots) in the coming year to learn the potential of this type of solution,” Forrester writes in the report.

E-commerce professionals also indicate that the internet of things, self-checkout and virtual reality/augmented reality (AR/VR) fail to make it into this year’s budgets to any measurable degree.

More than a fifth of U.S. online shoppers in 2016 say they had never heard of virtual reality headsets and 46% say they don’t see a use for VR in their lives, Forrester writes. “VR/AR needs to penetrate many other parts of consumers’ lives before it becomes an expectation for commerce,” Forrester notes.


However, one new technology retailers are watching with an eagle eye is Amazon’s Alexa—the assistant behind Amazon’s Echo and its other devices that enable consumers to speak to order or reorder products from Amazon. “Alexa is the question retailers are afraid to answer for the future of retail,” Forrester writes. Over a third of industry professionals Forrester interviewed at the National Retail Federation’s Big Show in New York City in January mentioned Alexa as worth watching. Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide.

“Persistent, effortless coverage in every room of the house is coming, which will permit natural interaction between customers and brands anytime, anywhere,” Forrester writes in the report about Amazon’s digital assistant. “When it does, why will consumers bother to pick up a phone or open a computer, much less drive to the store? Retailers are rightly concerned that Amazon’s pervasive relationship with consumers will make it the first and even the only retailer its customers consider for everything.”

When it comes to tech investments, Forrester advises e-commerce companies to: focus on technologies that identify pain points in the customer shopping journey, help leadership avoid “shiny objects” by staying customer-obsessed and invest in technology that directly ties to clear, measurable customer value.

In an interview with Internet Retailer, Victor Castro, digital strategy and e-commerce director at fine wine and liquor retailer Zachys Wine and Liquor Inc., says his company is spending the next 12 months investing in technology with a clear ROI.

“As a growing online retail business, we are investing in technology that provides a return on investment,” Castro says. “For example, email provides a hard, direct return on investment. You may have the best website in the word, but if you’re not driving traffic to it, it becomes an expensive paperweight. More established retailers can focus on other things like increased conversion rates or more margin on existing revenue, but we are investing in technology that will deliver a hard and direct ROI.”