This piece was co-authored by Agop Ashjian, CEO of Shipup, and Edward Drax, CEO of Yocuda.
The environmental crisis is a growing issue for both retailers and customers. A report by Recycling Lives found that 81% of people prefer to buy from retailers with an eco-conscious offering or eco-conscious practices. As such, retailers are pushing such practices higher up the agenda. From the raw materials, to supply chains, to store environments, retailers are making changes to reduce their environmental impact and they are promoting these actions to their shoppers via multiple channels.
Yet, the ongoing cost of living crisis is impacting consumer shopper habits and encouraging them to tighten their purse strings. As a result, there’s an ongoing balancing act for retailers between providing both e environmentally aware practices and products but at affordable prices.
Here is how both sustainability and the cost of living crisis will impact the retail industry in 2024.
Digital is the way forward
With no signs of the cost of living crisis slowing down, I expect shoppers to continue to be more discerning about the purchases they make in 2024 and, as a result, will look for more and better deals. Personalisation will be critical for retailers to win a share of a more frugal audience’s wallet. Retailers need to focus on projects that drive a tangible ROI in terms of cost saving and sales growth. With an understandably more price-sensitive customer base, retailers will look to drive loyalty through pricing, product range, service and brand values.
Retailers now, more than ever, need to make every touchpoint count with their customers. With a 75% open rate, a digital receipt is another marketing tool at retailers disposal that captures the attention of shoppers following a purchase. It is also, of course, a much more sustainable choice and a simple impact for retailers to make to demonstrate their commitment to sustainability.
Digital receipts have gained momentum as a solution for retailers amidst increasing demand from shoppers. When we surveyed the White City Westfield mall in London in 2018, 28% of retailers were offering digital receipts. This figure more than doubled, to 58% in 2023. Our recent surveys indicate that there is an overwhelming interest from customers, in fact 62% of UK shoppers said they would like more retailers to offer the option of a digital receipt instead of a paper one.
To remain profitable, go green
With this growing preference for sustainable practices, it’s no longer an option for retailers to remain profitable without strong sustainability commitments. Customers simply will not shop with a brand that doesn’t evidence environmental practices. From the raw materials to supply chains and in-store environments, retailers are making changes to reduce their environmental impact and are promoting these actions to loyal customers through multiple channels. Indeed, two thirds of UK shoppers (67%) think it’s environmentally wasteful for companies to print receipts automatically – an easy win for both consumers and shoppers.
The cost of living crisis has altered mindsets in the ecommerce industry. With marketing budgets and technology stacks cut, and inflation increasing the acquisition cost, post-purchase has become a new growth lever. Without increasing their acquisition budget, brands have increased revenue and optimised the potential of their post-purchase solution.
Changing mindsets playing a role
In a competitive industry, where companies are constantly competing to one-up rivals, post-purchase has stood out as a major way to differentiate yourself from the pack. It isn’t a trend that is unique in 2023 but advancements in AI certainly sped along some key changes. From chatbots to search tools and voice-powered shopping, AI has been used far more frequently than before to enhance the customer experience when shopping online. Retailers can now provide instant feedback to customers and have 24/7 availability which has lightened the load for customer support teams. Predictive support and data driven insights have also been channelled to bring more efficiency to businesses.
This is also in line with changing expectations from consumers for online retailers to provide a more personalised shopping experience. The amount of marketing communications consumers receive is at an all time high and dry, generic and uninformative will no longer cut it.
This rapid development in AI provides retailers with a plethora of useful customer data to allow them to provide much more personalised customer communications – such as past purchases, browsing history, search queries etc., so that retailers can make sure they’re staying relevant and driving higher open and engagement rates. This can only serve to enhance customer satisfaction and boost sales.
Environmental consciousness also remains top of the agenda, for both shoppers and retailers alike as it can be crucial to the decision-making process. Shoppers are getting fed up with endless and unnecessary paper and card promotions with their delivery. As such, post-purchase digital communication is the ideal replacement and provides a simple tool for retailers to inform shoppers of their low-impact values and practices. Companies may offer more information about their eco-friendly products and supply chain, and provide programs for recycling or responsibly disposing of products.