The shape of things to come
Instead of the usual list of what to expect for 2024, this is a look at what retailers will need to focus on over the next 12 months if they want to be successful.
It’s that time of year when industry commentators and pundits share their visions for the future, and make an attempt to predict what is likely to happen over the next 12 months to what has proven to be a challenging market which takes its time to embrace change. But, as Malcolm Gladwell says: ‘Success is not a random act. It arises out of a predictable and powerful set of circumstances and opportunities’ – so, instead of the usual list of what to expect for 2024, this is a look at what retailers will need to focus on over the next 12 months if they want to be successful.
Success factor 1 – brick-and-mortar retail’s return to growth
Physical retail is on a growth trajectory – according to the Economist Intelligence Unit, in 2024, brick-and-mortar stores will account for over 85% of total sales with ‘the strongest pace of growth for offline retail since the post-pandemic rebound of 2021’. This recovery in footfall will encourage many retailers to expand their physical footprint, expanding beyond Asia and the Middle East, where Western brands tend to open stores to offset sluggish growth at home, to Europe and the US.
This brings home with force the need for hybrid/unified shopping experiences that make customers feel seen, valued and respected wherever they choose to shop.
It’s just not possible to offer this kind of seamless, cross-channel experience which leverages the best of in-store and online retail without the right technology. Clienteling tools, coupled with access to full product catalogues for an endless aisle of goods, equip store associates with unprecedented opportunities to engage with the customer on their terms. With access to comprehensive customer and product information, store associates can deliver a truly personalised customer experience, they can cross- and upsell based on proven data and remind customers of what they’ve browsed, bought, and added to their wish list.
Success factor 2 – AI
The prioritisation of customer experience has led retailers, fuelled by advances in key markets such as the Middle East, to consider how new AI-powered tools could become a source of support, inspiration and, ultimately, increased sales for store associates. Retailers know that their human expertise is a critical asset and expect store associates to provide increasingly personalised customer experiences, fuelled by relevant communications which create profitable relationships. At its simplest level, AI can offer a degree of automation for more routine tasks including helpdesk/customer enquiry services, data input and other areas where computers can be ‘taught’ to quickly analyse information to provide accurate content to users, freeing up store associate hours for delivering those experiences which rely on the human touch – something that AI simply can’t offer.
AI and its potential is likely to dominate conversations and events throughout the year, and will inform successful retailers’ strategies as they recognise its benefits.
Success factor 3 – a new definition of loyalty
Today, the concept of loyalty goes beyond simply offering discounts and coupons. Building a personal, mutually-profitable relationship with customers involves knowing them, their history and what motivates them. For a successful loyalty programme for today’s shoppers, retailers need to marshall their data, extract its meaning for individual customers and put it to work in a way that builds both long-term relationships and the bottom line.
With a pragmatic approach and a keen eye on what customers are actually asking for on their path to purchase, retailers can build a robust strategy for a successful 2024 – one which places them in a solid position to take advantage of opportunities for growth.
This article first appeared in MyCustomer.