We don’t have a crystal ball. We’ll be the first ones to admit it. Truthfully, we don’t know what 2024 has in store for us. And, anyone who tells you otherwise is selling snake oil. The retail industry continues to undergo rapid transformation, driven by technological advancements, changing consumer behaviours, and fluctuating economic conditions.
What we’ve done is bundle together industry expert opinions and ideas on what 2024 might look like based on the maelstrom of change 2023 unleashed upon the world, and how we think these far-reaching developments will extend into the future. Let’s get started.
- Embracing AI to Elevate Customer and Employee Experiences
- Introduction of Web3 Technology and the End of Third-Party Cookies
- Understanding the Needs of Budget-Restricted Customers
- Streamlining Fulfilment and Delivery
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Embracing AI to Elevate Customer and Employee Experiences
On 30th November, 2022, OpenAI launched their flagship product, ChatGPT, and the world seemingly changed forever. ChatGPT, or Chat Generative Pre-trained Transformer, is a language model-based chatbot that allows users to generate responses of any desired length, format, style, level of detail, and language for any prompt they might use.
Whilst some dismissed it as another passing fad or trend, others recognised it for the truly transformative properties it possessed in being able to revolutionise the way in which people were able to streamline operations and optimise organisational efficiency. And, whilst these powers have been recognised and adopted by many, the true potential of AI, Generative Chat tools, and Machine Learning is still yet to be truly harnessed by many.
Whether it’s for optimising product development, customer service, or conversion rates, AI will be employed to eliminate inefficiencies and provide valuable insights and recommendations for improving customer experience. Some of the ways in which AI have been leveraged so far, and will continue to be leveraged will include: content generation and enrichment, product data collection and cleansing, enhanced work automation, unburdened and supported customer service, and personalised content for diverse markets.
Introduction of Web3 Technology and the End of Third-Party Cookies
Have you ever heard of Web3? Well, over the course of the next year, you’re about to hear a whole lot more. Web3 refers to the third generation of web technologies, which is characterised by decentralised applications. Web3 is claimed to offer users more control over their data whilst also allowing companies to access new sources of information and insights.
Google, also, recently announced that they are phasing out third-party cookies in 2024. For years, third-party cookies have served as an invaluable tool for businesses, facilitating website visitor tracking, enhanced user experiences, data-driven ad targeting, and insights into customer browsing behaviour. However, with third-party cookies coming to an end, businesses must adapt to a new era of customer engagement. Web3 adoption can allow businesses to unveil customer preferences and behaviours, and refine their products and services. And, with Web3 customer information resides securely in digital wallets rather than on individual machines, granting businesses access to first-party data whilst safeguarding user privacy.
Web3 isn’t just beneficial for businesses, either. Customers will now be granted unequivocal ownership of their own data and digital assets as third-parties and intermediaries are taken out of the picture. This translates to enhanced privacy and autonomy ensuring that individuals retain full control over their personal information and digital assets, including subscriptions, personal data, rewards, and more. Embracing Web3 for businesses isn’t going to be an option, but rather a necessity, for businesses moving forwards.
Understanding the Needs of Budget-Restricted Customers
Cost of living crisis, and looming recessions, have continued to exert pressure on consumers worldwide. This situation has not shown strong signs of improving itself moving into 2024 so, resultantly, retailers need to bear this in mind moving forward. Businesses must not only scrutinise their pricing strategies but also adapt their product offerings to align with the preferences of price-sensitive shoppers.
It’s essential to recognise that not all consumers will behave in the same way in response to economic fluctuations. So, companies must identify the most valuable customer segments for their brand and understand the underlying factors that drive these shifts in consumer behaviour.
Beyond price considerations, factors such as product quality and shopping convenience play a significant role in influencing consumer decisions. Manufacturers and suppliers should prioritise understanding these factors to develop effective strategies that resonate with consumers during economically challenging times.
Streamlining Fulfilment and Delivery
In recent years, optimising fulfilment and delivery has become a critical differentiating factor for brands vying for customer loyalty. As demand for same-day and next-day delivery intensifies, retailers are innovating to meet consumer’s expectations for speed and convenience. In-store pickup, as an example, has emerged as not only a convenient alternative for shoppers but also an opportunity to encourage additional purchases when customers visit the store to collect their orders. For instance, if a customer’s order falls just short of qualifying for free shipping, in-store pickup can be a compelling alternative, and as we’ve already pointed out, can even lead to additional purchases.
Retailers are also placing a renewed emphasis on returns management. While minimising returns remains a cost-effective strategy, creative solutions are emerging to transform returns into opportunities for customer engagement. Offering customers incentives like free shipping for future purchases, or other benefits, if customers return items in-store which can foster goodwill and strengthen customer relationships. The key is to provide a range of return options that are seamless, hassle-free, and aligned with the expectations of today’s discerning shoppers.
Whatever 2024 has planned, we want to help you weather the storm. If you’re looking for new electronic point-of-sale, eCommerce functionality, advanced reporting, inventory management, payments, or even some Capital, Lightspeed have everything to help your retail business grow, scale, and succeed. Want to learn more about how Lightspeed can help? Watch Lightspeed Retail in action here.
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