The retail industry is on a never-ending quest to get the right products to consumers when, where, and how they want. Yes, the pandemic has turbo-charged digitalization, but e-commerce is no longer a differentiator.
To attract and keep delighting more customers, retail leaders are delivering fun, convenient, digital, and in-person experiences while baking in sustainable business practices. Oh, and they’re keeping employees happy too, because knowledgeable, engaged workers are a crucial part of the customer experience (CX). These are among the major trends experts see for the retail industry entering 2022.
Omnichannel Retail Experience Rules
Online shopping has become part of what’s called omnichannel CX. In one Gartner survey, 95% of retail CEOs said they planned to increase investments in digital capabilities. However, differentiation requires offering what consumers want most.
Gartner analysts saw e-commerce totaling about 17% of retail sales in 2022, with growth as a percentage of in-store shopping almost leveling off in the next few years. In one blog, Gartner analysts wrote that, “Retailers are bullish on stores and are increasing store technology investments to differentiate themselves in a dynamic marketplace.” While consumers have flocked to digital channels, the physical store remains “the most preferred shopping destination.” In fact, IDC analysts predicted that by next year, to counter digital fatigue, 60% of leading organizations will look to differentiate by delivering trusted and memorable engagements that recreate physical experiences.
Case in point is live commerce, where retailers showcase products, qualify customers, and promote the brand. IDC analysts predicted that by 2023, 40% of retailers will have integrated livestreaming capabilities to their commerce platforms, increasing e-commerce conversion rates by at least 10%. Gartner researchers expected double-digit growth in live commerce with Chinese sales totaling US$423B this year and U.S. sales exceeding $25B by 2023.
Connected Data Drives Personalized CX
Moving to cloud-based platforms is foundational to retail growth. IDC analysts predicted by 2024, 30% of Fortune 2000 companies will deploy next-best action across their omnichannel environment, driving demand for customer data platforms, omnichannel management, and customer service solutions. By 2025, IDC analysts saw 75% of retailers fully integrating order and inventory data and optimization against fulfillment, improving conversion by 10%, customer satisfaction by 50%, and reducing cost to serve by 25%.
“Connected data helps retailers quickly change course as market demands shift while still providing personalized customer experiences,” said Ellie Lamey, head of Retail and Wholesale Distribution at SAP UK and Ireland. “Using SAP solutions that combine information from back-office through customer-facing systems, retailers have insights to deliver an omnichannel experience that delights customers.”
Innovations like artificial intelligence (AI) and machine learning are central to agile decision-making for resilient business. IDC researchers said that within two years, 40% of the top 500 retailers will use AI-enabled decision-support to drive improvements in the new KPIs of omnichannel retail, including customer lifetime value (CLV), productivity, and profitability. Gartner analysts predicted that by 2027, a quarter of Fortune 20 companies will be supplanted by companies that neuromine and influence subconscious consumer behavior at scale.
Sustainable Business across the Retail Supply Chain
Forrester researchers found that between one-fifth and up to half of online consumers in the U.S., Metro China, France, and the UK ranked environmental responsibility among the top three reasons for buying products including consumer electronics, large appliances, cosmetics and beauty products, clothing and footwear products, and groceries. Reusability, sustainable or recycled materials, non-toxic or chemical-free, certified organic, and locally made were among their purchase criteria.
Fashion retailers are turning to advanced technologies to reduce waste and inject personalization, offering curated selections and concierge services. Gartner analysts forecasted that by year-end 2025, all global multichannel fashion retailers will use AI and automation to create more targeted assortments, reducing product options by up to 30%. This is designed to help meet regulations while catering to consumer demands. IDC predicted that by 2025, 75% of retailers will implement critical supply chain KPIs that tie carbon emissions and environmental factors to both product development and supplier selection, boosting customer loyalty by 45%.
Retail Workers Expect Better Treatment
It’s impossible to delight customers without informed, engaged employees. With global talent shortages at record highs, Gartner researchers called on retailers to hone a “total experience strategy” uniting customers and employees for a stronger “multiexperience” across digital interactions. IDC analysts said that by 2026, 90% of the top 2000 retailers will employ edge computing to harness the explosion of data in stores for better workforce productivity and customer experience while reducing costs by 20%.
There’s a straight line from brand trust to how well retailers deliver value to consumers. The search for the ultimate customer experience begins and ends with connected data.
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This also appeared on SAP BrandVoice on Forbes.
