5 retail trends to embrace the experience economy

<p><a><b>To unleash the full power of new technology, retailers should embrace five drivers of retail growth driven by an enriched shopper experience.</b></a></p>

<p>To navigate a changing world, you need to focus as much on the past as the future. That’s the message of ‘<a href="https://www.amazon.com/Same-Ever-Guide-Never-Changes/dp/0593332709" target="_blank" rel="noopener noreferrer"><i>Same as Ever: A Guide to What Never Changes’</i></a><i> </i>the latest book from international bestselling author, Morgan Housel.</p> <p><i>Same as Ever </i>has a particularly relevant lesson for retailers in 2024, many of whom have been swept up in the hype, and justified excitement, around generative AI. In the stampede to embrace this and other new technologies, it’s easy to forget that the cornerstones of the customer experience, the constants that determine success, remain what they always have been: Loyalty, satisfaction and intimacy.</p> <p>As business has learned time and again: new technology doesn’t necessarily add value unless it solves an existing problem or furthers an existing goal. For retailers, the most important of those goals is an ever-improving customer experience. It’s the use of new technology <i>in service</i> of this foundational principle—not the new technology itself—that stands poised to reshape the retail industry.</p> <h4>5 retail trends shaping the experience economy</h4> <p><span style="font-weight: normal;">To effectively navigate enterprise transformation and industry disruption, retailers need to embrace the experience economy and strategically integrate next-generation technologies. Brands can successfully enter the new era of cognitive retail by keeping these five trends in mind:</span></p> <h5><a style="font-weight: normal;"><span class="text-bold-italic">1</span>.&nbsp; &nbsp;&nbsp;Customers are prioritizing experiences over products</a></h5> <p>Nearly <a href="https://www.salesforce.com/news/stories/customer-engagement-research/" target="_blank" rel="noopener noreferrer">90%</a> of consumers say the experience a company provides is as important as the products it offers. As the retail industry becomes less transaction-oriented and more experience-oriented, stores will need to reposition themselves as “experience hubs” that prioritize curated experiences and value-added services.&nbsp;</p> <p>Organizations must take every opportunity to deepen their customer relationships. They can do this by using stores as a venue to highlight what makes their brand unique, create a sense of community and use technology to personalize the customer experience.&nbsp;</p> <h5><span style="font-weight: normal;"><span class="text-bold-italic">2</span>.&nbsp; &nbsp;&nbsp;Contactless checkout is not the only way to reduce friction</span></h5> <p>Many retailers have incorporated frictionless checkout—but what about frictionless sizing? Or virtual try-on? How valuable is the contactless checkout if it doesn’t supply curated product recommendations on-demand?</p> <p>Retailers must use technology to design an experience in which every interaction is a powerful and seamless part of the customer journey. Although contactless checkout is a great initial step in modernization, retailers need to find additional ways to reduce friction between the door and register.&nbsp;</p> <h5><span style="font-weight: normal;"><span class="text-bold-italic">3</span>.&nbsp; &nbsp;&nbsp;Personalization requires a strong data foundation</span></h5> <p>According to our research, generative AI is predicted to yield more than<b> </b><a href="https://www.cognizant.com/us/en/aem-i/generative-ai-economic-model-oxford-economics" target="_blank" rel="noopener noreferrer">$1 trillion</a> in annual productivity gains by 2032. Access to real-time data is allowing retailers to make faster, more informed decisions that impact how customer experience is delivered.&nbsp;</p> <p>For instance, when shoppers share their information with retailers, they expect personalized returns: experiences, product recommendations and tailored content. But to create these interactions, retailers must harmonize their data sets.</p> <p>Generative AI accelerates this process and allows retailers to anticipate behaviors and offer catered recommendations. To earn loyalty, retailers need to prove they know their customers as individuals, using data effectively to inform every interaction and touchpoint.&nbsp;</p> <h5><span style="font-weight: normal;"><span class="text-bold-italic">4</span>.&nbsp; &nbsp;&nbsp;See the supply chain through a customer lens</span></h5> <p>The supply chain has always been a critical function for retailers, but never has it been so central to customer experience. Shoppers now expect products to be available whenever and wherever they need them, requiring a more responsive and transparent supply chain than ever before.&nbsp;</p> <p>During the 2023 holiday season, <a href="https://tech.walmart.com/content/walmart-global-tech/en\_us/news/articles/walmarts-ai-powered-inventory-system-brightens-the-holidays.html#:\~:text=Our%20AI%2Ddriven%20systems%20leverage,to%20differentiations%20by%20zip%20codes." target="_blank" rel="noopener noreferrer">Walmart</a> implemented an AI-powered inventory system that combined historical data and predictive analytics to help optimize the availability of holiday items across locations, from distribution and fulfillment centers to Walmart stores themselves.</p> <h5><span style="font-weight: normal;"><span class="text-bold-italic">5</span>.&nbsp; &nbsp;&nbsp;Look at the associate experience to boost customer experience</span><br> </h5> <p>An often-overlooked area of the retail experience is the associate experience. As stores adapt to accommodate omnichannel trends like “order ahead” and “curbside pickup,” associates are forced to juggle traditional customer service duties alongside new tasks that limit the amount of time they can spend interacting with customers.&nbsp;</p> <p>Research suggests <a href="https://business.comcast.com/community/docs/default-source/default-document-library/ccb\_report\_retailtrends-r8.pdf?sfvrsn=d4a2ec6\_3#:\~:text=In%20its%20Retail%202024%20Predictions,and%20BYOD%20programs%20by%202025." target="_blank" rel="noopener noreferrer">95%</a> of retailers will test and invest in generative AI to enhance product innovation, customer support and customer experience initiatives by 2027. Many retailers are looking to generative AI-driven labor management tools to enhance their customer experience delivery. These solutions facilitate task delegation, monitor store activities and allow associates to respond to issues in real-time. They also play a pivotal role in boosting employee morale, onboarding new associates and providing ongoing employee education.&nbsp;&nbsp;&nbsp;</p> <h4>Embracing technology to deliver incredible experiences</h4> <p>Generative AI will be a critical tool for retailers, but they will need to find ways to enrich customer journeys and fuel the experience economy. With this combined focus, retailers will reap the benefits of the new era of cognitive retail and truly set themselves apart.<br> &nbsp;</p>