Imagine physical stores full of interactive technology, offering high levels of personalization that blur the lines between physical and digital shopping. From social media to video games and the virtual world, retail is to be integrated into every facet of customers’ online lives.
Well, that’s what the Retail Industry or the new shopping paradigm gonna look like in the coming years!
With the onset of the COVID-19 crisis, the retail industry experienced numerous threats and challenges. Evolving customer expectations, supply chain disruptions, growing inflation, the meteoric rise of e-commerce and q-commerce, and declining growth & revenue posed serious upheaval in long-term ways of working. Even though the pandemic shook the global economy in 2020, the retail industry tried to combat the challenges by accelerating digital transformation at a breakneck pace and enabling tech-savvy experiences.
As the economy lurches back, the new digital shopping experiences and improvement of the retail industry have only added to the success that it has managed to achieve. A lot of emerging trends have changed how the retail industry functions with some semblance of full speed and catalyzed the overall development that the sector has experienced.
A recent Mckinsey study reveals that the retail industry has significantly grown to become a massive player considering online shopping for goods like apparel increased by 40% and others, like groceries, by up to 100%. Amid the seemingly unstoppable rise of the e-commerce world. the digital genie is out of the bottle and as organizations plan and budget for 2023, the question isn’t whether should or even when should, retail businesses rightsize the IT cost structure to new demand levels and modernize the technology stack - it’s what is the best way forward?
To help you navigate this uncertainty and shore up your decision-support systems, let’s take a closer look at the top retail industry trends likely to emerge in 2023.
Create an Omnichannel Experience: The omnichannel approach and automation complement one another, resulting in a better online shopping experience for buyers and merchants. With customer needs and priorities evolving faster than ever, it is important for companies to keep evolving with a 360-degree approach.
By providing consistent information across all of your sales channels, top-notch graphic materials, and a strong brand image, you can turn all of your channels - including physical and online marketplaces - into a single shopping experience. Additionally, it's critical to provide consumers with a way to move between channels, such as from online ads to the marketplace, social media to your online store, etc.
The power of omnichannel strategy unleashes a seamless consumer experience in which all browsing and transactions have the impression of coming from the same ecosystem. Today’s customers demand a tailored, information-rich shopping experience that enables them to get what they need with the least amount of hassle, effort, or human interaction. Omnichannel strategy unleashes the potential of a seamless customer experience. Organizations with strong retail analytics games and omnichannel customer engagement retain 90% of their customers in comparison to organizations with weak omnichannel engagement.
Sustainability: Sustainability is a top priority for retail customers and customers are looking to vote their dollars on eco-friendly products made from renewable resources with less environmental impact. As per a Capgemini report, 79% of customers are changing their shopping preferences based on items that are sustainable and produced by companies with fair wages & labor practices.
Customers are willing to prefer companies that share their views on issues like social justice and climate change. They want businesses to take on big initiatives like protecting mental health, employing a diverse workforce, fully recycling, and procuring goods in an ethical and equitable way. For example, a leading personal care market player Beiersdorf player has co-developed renewable plastic packaging under its Nivea Naturally Good face care range, using by-product oils from the forestry industry. This sustainable packaging is giving competition to other retailers in the market.
Retailers are finding new and innovative methods to provide sustainability-focused products to their customers. Using technology to target products and remove the less relevant or cost-effective ones off the shelf is one of these more recent trends. As a result, supply chains may become less complex, lowering carbon footprints. This leads to fewer, more alluring options for consumers and a more personalized shopping experience. Retail players that crack the code of sustainability and rely on the potential of analytics for retailers will be well-positioned to achieve success in the years ahead.
AI & Personalized Experience: As emerging technologies give customers more control, on-demand personalization is expanding into all facets of retail. The time when customization meant including first name fields in your direct emails is long gone.
Nowadays, most retail businesses provide clients with dynamic product recommendations, filtered emails that exclude previously bought things, and highly-advanced profiling systems that let customers create their own identities and ways of interacting with the business. For example, Amazon’s cashier-less checkout technology allows customers to skip the checkout line by automatically identifying the products taken by customers and charging them when they leave.
Analytics and artificial intelligence (AI) play a crucial role in providing the high-quality customer service that customers want. The difficulties in optimizing data can seem overwhelming to merchants who have a skills gap in these areas and disparate systems. Data will be crucial to the success of retail's next-level digital transformation if it is to create a seamless experience.
A famous data expert, Thomas Redman claimed, "Where there is data smoke, there is business fire."
Retail data analytics help organizations stay abreast of shopping trends by driving smart decisions and maximizing ROI. Also, it will enable organizations to meet their delivery expectations with intelligent fulfillment selections.
Smart Packaging: There is fierce competition in the retail market with a number of stores opening up and coming up with innovative ways of marketing. Smart packaging has become the new standard - right from storefronts to in-house experiences. There are numerous possibilities for optimizing printed electronics in packaging whether it's about labeling exclusive content for customers or bags that produce freshness. The use of specialized scanners in warehouses and distribution centers are common examples that fall under smart connected planning.
The success of a retail store now depends considerably on the entire experience a customer has. Effective packaging speaks a lot about the brand and smartly communicates its value to customers. Using advanced technology, retailers and manufacturers can gain a 360-degree view of customers across all channels and better understand customer preferences, and map marketing strategies accordingly.
Additionally, connected planning and the untapped power of the Internet of Things (IoT) prove extremely beneficial in transforming the retail supply chain, ensuring product integrity, and scaling overall customer experience.
Retail robotics & warehouse automation: Retail robotics handles a wide variety of in-store activities - all of which are designed to raise safety, boost daily operating efficiency, and provide a seamless customer experience. Determining inventory levels, updating shelf pricing, reviewing planograms, and managing other time-consuming duties are a few of these laborious chores. For example, Walmart uses shelf-scanning robots to check things like inventory, prices, and misplaced items and save effort on time-consuming labor tasks.
Automation capabilities will significantly influence the size and scale of omnichannel networks. Retailers must have a clear understanding of how automation can create value, reduce risk, and improve reliability across an increasingly complex network of fulfillment nodes.
It is undeniable that emerging retail trends are important for market players to win the revenue race, rebuild the most critical decision-support models, and double development velocity. Retail analytics plays a crucial role in bringing an omnichannel experience, analyzing best supply chain practices, using sustainable approaches, following smart connected packaging, and leveraging AI & machine learning techniques. Effective data management at its core data analytics and strategic planning brings the trends into reality.
Retail players that are focused on selectively modernizing technology can transform both the customer experience and their operational performance when they approach it with a “why first” mindset. As retail leaders discover their “why” and align strategic alliances with tech experts, they are well-positioned to create an approach that delivers the sustainable results they’re looking for in this new retail era.
Are you ready to empower your retail business with our industry-proven techniques and automation solutions? Speak to our Retail Consultants at Polestar Solutions to identify the optimal inventory levels, maximize revenue and scale your retail business game.