Businesses in the retail space have rapidly adapted to changes initiated by the global pandemic and then aligned their strategy with consumer behaviors that have evolved since. So, what are the trends ISVs working in the retail space need to turn their attention to for 2024?
Jeff Springer, Principal Consultant at DAS42, says retail trends to watch include artificial intelligence (AI) implementation, expanded omnichannel marketing strategies, augmented reality and virtual reality (AR/VR) engagements, and hyper-personalization. His insights can help you plan, and possibly course-correct, for a successful year.
How will generative AI will benefit retail?
Springer: Generative AI is going to be implemented widely in every industry, but specifically, it’s going to take off with helping retailers provide consumers with up-to-date, accurate product information. More specifically, the brands that will win in 2024 will use AI for data automation to boost their sales and streamline operations, i.e., inventory and supply chain management, enable natural language self-service analytics and reporting, etc. Retailers will now be able to ask something like “What are our inventory projections for the next three months given the recent supply chain issues in China?” right in Slack.
Additionally, AI can give retailers complete control over listings and personalization strategies to support quality product info and advertising efforts, which can help decrease the number of returns they’ll receive from holiday shopping/gifting – something that has become a bigger obstacle, even with giants like Amazon, in the past year.
How will retailers adapt their marketing strategies?
Springer: I strongly believe that omnichannel marketing strategies will be key for brands. Gone are the days of solely interacting with consumers in stores. To truly compete with other brands and win over customer loyalty, brands will need to reach consumers where they’re at – and that’s everywhere. Consumers are buying on ecommerce sites, TikTok, Facebook, Instagram, etc. I predict that omnichannel marketing strategies will play a huge role in brand loyalty and attraction in 2024.
Is 2024 the year retailers implement AR/VR?
Springer: We’re still several years away from having Cher’s closet in Clueless, but many brands are already implementing a lot of 3D content and virtual model tech. What to really watch for is consumer sentiment towards these things. Is it actually helpful to see what a 3D model of a side table will look like in your living room? A shirt on a model who is your same height and build? The obvious answer is yes, but brands can’t forget that not all technological innovations will be adopted by all consumers and generations. In 2024, it’s going to be critical to see how consumers continue consuming these AR and VR advancements and all the data that it’ll take to make them successful.
Why are retailers focusing on personalizing engagements?
Springer: Hyper-personalization is going to continue to be huge in 2024. Consumer behaviors are shifting greatly, and in order to ensure your brand is staying top of mind for a consumer is to ensure you’re showing and developing products that they want. If a consumer keeps seeing an advertisement for dog food at Target but has no dog, they’ll be more likely to ignore any Target ads they receive afterward. Data is going to be key for hyper-personalization here.
How can ISVs add value to the solutions they provide?
Springer: An important piece to note is these technology trends require thoughtful and deliberate planning for retailers. All are heavily data-dependent and will likely require retailers to carefully consider their existing data architecture and plan for and implement changes to that architecture.