Thanks to the internet, someone’s always shopping. However, now that the holidays are over and a new year has started, here’s hoping that you’ve got some time to slow down, step back and think about what direction you’re heading in with your store (or stores).
While geopolitical, climate and lingering inflation problems are still market considerations, consumer confidence reached a five-month high in December, which will hopefully continue to increase throughout 2024. Using increases in activity like this is pivotal for retailers, and the trick to capitalizing on it is understanding your customers and what you should do to improve the way you sell to them. With that in mind, here are three retail trends you should consider as you look to grow your business this year.
Let’s start with the most crucial part of the retail industry, the customer. Over the past few years, a new type of customer segment has emerged, one which is being referred to as the zero consumer. Fortunately, they aren’t called that because they don’t buy anything. The name is derived from their marked lack of brand loyalty, boundaries and patience with slow deliveries, along with their commitment to net-zero sustainability practices. It might sound strange as a concept, but they’re pretty common; you might even be one yourself.
The zero consumer is more interested in deals and rewards programs than brands they’ve bought from before (zero brand loyalty), shops both online and in physical stores (zero boundaries), prefers options like next-day or two-day shipping over standard options (zero patience) and is more likely to buy products that are good for the environment (net-zero sustainability interest). Essentially, the zero consumer is the modern savvy shopper. They’re looking for products that are affordable, accessible and sustainable. However, it’s enough of a shift that catering to their needs requires tweaking to the standard retail model.
Loyalty programs are better at keeping zero consumers around than one-and-done sales. Since you need to keep winning their business, you need to give them a reason to come back other than brand recognition, and continued rewards for shopping with you are the best way to achieve that. Regarding their lack of boundaries, retailers need to invest in a strong omnichannel presence, which goes hand-in-hand with improving shipping speeds. In both cases, retailers need to supercharge their fulfillment operations to move inventory faster and optimize their processes to make options like BOPIS and curbside deliveries feasible. Sustainability is up to your product development teams. Still, it’s a key factor that zero consumers are willing to pay more for, so it won’t harm your bottom line if it increases production costs a little bit.
Let’s talk inventory. As the lines become less and less clear between in-store, online, and curbside or store pickup, inventory accuracy becomes more and more necessary for success. A shopper who checks inventory online and arrives to find their item out of stock on the shelf is a lost sale and a bad customer experience rolled into one. If someone places a pickup order online and is then later informed that an in-stock item that they requested cannot be found, the customer will likely have less trust in the store going forward. This problem can be eliminated by having near-perfect insight into what you have and where it is. It’s a tall task, but RFID technology is up to it.
RFID isn’t a new concept, but thanks to a combination of improvements in tech and lowered costs, it’s now possible to use RFID technology to keep track of where every item is in your store. In addition to fixing problems like the one we talked about earlier, RFID can even be used for advanced applications like making your store cashierless. Expect to see more uses for RFID going forward.
AI is part of every discussion now, and that doesn’t exclude brick-and-mortar stores. However, the value here is already proven. Instead of using machine learning to train a language model or generate realistic images, stores have begun using AI to create meaning from large quantities of customer information. AI can find the most effective places for displays, make decisions about what items should sit side-by-side on the shelf for customer convenience and direct store employees from task to task in the most efficient way possible.
On the ecommerce front, AI can make sure your fulfillment center is keeping items that customers buy together nearby and that omnichannel orders are fulfilled at the right time. Combine AI with real-time inventory tracking, and you gain the ability to guarantee that what your customers are ordering online will be there for them when they get to the store, whether that’s to pick it up or grab it off the shelf. Whether you’re selling in person or online, an AI-powered store platform can level up your ability to deliver on customer experience and, well, deliveries. And those are only a few of the benefits that we’re seeing today; we expect to see more retail applications of AI in 2024.
With consumer confidence trending upwards and plenty of new technologies to explore, 2024 has the potential to be a transformative year for retail. Don’t be afraid to try new things, adopt new solutions and increase your store’s capabilities. Here’s to a good year!