The evolved relationship between the retail industry and consumers can be easily attributed to the transformation and innovation in retail. Here’s looking at it in 2023.
The previous year saw retailers emerge from the shadows of the pandemic braving labor shortages, supply chain disruptions, and demand fluctuations. The year 2023 will see businesses go hammer and tongs after incremental value creation and customer-centric innovations. Retail took the biggest hit initially, being first in the line of industries. But, from there on, it has only emerged stronger. It’s now retail’s turn to lead the way in leveraging technology and building future-fit companies.
Customers’ expectations today are clear and comprehensive, and continuously evolving. Bridging the gap between digital acceleration and building customer intimacy is the top priority for retailers. Innovations must be carried out as customer loyalty gains a new dimension driven by a deep connection between customer and brand.
Here are some retail industry trends in line with customers’ expectations for 2023:
Automation-led Customer Engagement
With the ‘Great Resignation’ already behind us, there is a silver lining for retailers. From fast food to agriculture, machines are taking over. Retail cannot stay behind. Investing in automation will become inevitable to serve customers more efficiently and compellingly; AI and analytics will play a pivotal part in it, and so will NLP (natural language processing) and computer vision.
Retailers have already gone proficient in creating self-checkout kiosks, click-and-collect points, augmented-reality dressing rooms, and mobile checkouts to facilitate shopping experiences. And now the time has come to automate humdrum, time-taking functions such as customer service and managing tasks—but efficiently.
Therefore, technological infrastructure, integration, and transformation will be vital elements in using automation to deliver customers what they desire.
Service Strategy (even for Physical Stores)
While product innovation isn’t going anywhere, service innovation has become a differentiating factor in retail. The battle will be fought not on discounts or lower prices but on service differentiation coupled with product innovation. And that goes even for physical stores, not just e-retailers Amazon has been building physical bookstores since 2015, and its plans to open large-scale retail stores mark the beginning of something new entirely. Retail engagement is fast going from online experiences to creating experience centers.
Product brands like Apple, Samsung, and LG already rely on their service to differentiate themselves. Excellent service will play a decisive role in providing customer experience, building loyalty, and offering a unique selling point, especially when customer behavior is reinstated back to pre-pandemic times. In short, genuine and delightful customer interactions will further brand success. Another factor that will aid in servicing customers would be reliable, high-quality data. Hence, constantly identifying new data sources to assess customers’ preferences will remain crucial.
Delivering Products Gets Experiential
Delivering products to the end customers is also an art that stands on a robust, unshakable delivery engine. But delivery would now become a part of the entire package that inspires and entertains customers.
During the pandemic, last-mile delivery was the most stringent test for retailers globally as supply chain lines got affected. However, the revolution in delivery had started much before that when in 2019, ‘Checkers’ supermarket in South Africa started a 1-hour grocery delivery service called ‘Sixty60.’
Brands are waking up to the fact that timely delivery is an unmissable part of customer delight. Amazon is a pioneer in this. More evolutions are yet to happen in this domain; from curbside pickups to rapid hyper-local last-mile deliveries, the pace of delivering products to customers will help counterbalance competition for retailers. In addition, innovative delivery mechanisms such as at-public places, on trains, or in-car deliveries and drone deliveries will continue to play a significant role in offering pleasing experiences.
Social Media Commerce and Customer Sentiments
One of the next big things for retail (among many big things) will be the rise of social commerce. WeChat’s humongous success in facilitating $250 billion in sales marks the beginning of an era. Social shopping is catching customers’ attention like never before. Buyers find it more entertaining, more engaging than infinite scrolling of eCommerce sites. At the same time, understanding, analyzing, and synthesizing social media sentiment will become essential in focusing on customer preferences and behaviors to tap deeper into the social commerce scenario.
Data will play a vital role in it. And accurate data management of products will significantly contribute towards personalization and displaying real-time status of buyers’ sentiments. Though social commerce’s potential is yet to be fully explored, it’s evident that everything that brands do on social media has consequences and impacts shoppers.
Evolving Consumer, Slowing Consumerism
On the one hand, connectivity in the customer environment will increase; on the other hand, customers will be drawn towards sustainability, and a circular economy, where recycling, reuse, and repair will be the buzzwords. Hence, consumerism will slow down, but customers will continue to evolve. According to Cisco’s Annual Internet Report, by 2023, devices linked with IP networks will be thrice the entire world’s population.
This kind of speed and scale in digitalization hugely affects the emotions and responses of consumers, altering their behavior towards a shopping environment forever, thereby constantly raising the bar of brand expectations. Moreover, new buying patterns are emerging that offer both challenges and opportunities to retailers.
Therefore, while consumers adjust their behaviors to technology and the environment, retailers must adapt to everything—changing customer behavior, technology, and the environment
Wrapping Up
Retailers have lived through and experienced a time where opportunities and priorities have been reshaped, industry rules have been changed, and strategies have been renewed. And this change is nowhere near halting. To differentiate themselves digitally, retailers must make pointed, well-thought-out digital investments. Everything from the supply chain to managing inventories to customers’ digital experiences must be in perfect sync. Employees’ and customers’ health and safety and continuous push toward sustainability will attain great significance. Perceptions of cost cuttings will evolve; digital spending cutbacks will be the last thing on the minds of senior executives. New perspectives will emerge on addressing productivity, profitability, and partnerships.
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