Consumer attitudes and behaviours are changing. People are seeking value from their shopping, and while price will be the ultimate purchase driver, there is a reluctance to compromise on convenience and values. Expectations of service, retail technology and sustainability are rising. The future of retail is one where the shopper will be much more deeply involved.
Three of the main ways this desire for involvement is manifesting itself are people’s use of social media, their craving for personalisation and how they are embracing sustainability.
Social commerce goes from strength to strength
Consumers are looking for a heightened sense of value and connection from brands and retailers. As they seek to be rewarded for their engagements, the focus is on strengthening emotional relationships and enabling participation.
However, social commerce is currently in a period of evolution, as Facebook, Instagram and TikTok all scale back their commerce efforts and refocus on driving ad revenue. In app-purchases have been affected by lack of trust and experiences not being seamless, while the cost-of-living crisis is increasingly driving consumers to marketplaces. Nearly three quarters of consumers are using marketplaces/peer-to-peer sites. Research suggests that convenience and fulfilment options are proving the greatest draw.
Some platforms are recognising the shift and adapting the customer journey accordingly. They are further enhancing the product discovery stage through social channels and then using marketplaces to close the loop. For example, Snapchat provided an AR try-on experience for users, with checkout directly on Amazon.
Shopping apps with TikTok-style feeds are incorporating livestream shopping, which continues to be a powerful means of creating connections and growing communities. Influencer commerce is also rising as consumers become ‘prosumers’ and use products to promote their own brands and channels.
The opportunity is there to increase the number of explorable entry points and embrace discovery-first strategies, from shoppable tags to live streams and virtual consultations, integrating marketplaces into the ecosystem to close the loop.
Personalisation is not an option – it’s essential
Personalisation is a priority for consumers. It has become a core consumer expectation – meeting customers’ needs at each step of the journey, across every channel, and adapting to changes in real time.
Rich customer data is the key to implementing retail personalisation. Brands and retailers must leverage purchase history, location and demographic data so that consumers can be served a tailored shopping experience that appeals to their unique needs and interests. As personalisation becomes the default standard for engagement, a growing number of brands and retailers are enhancing their data capabilities and using AI and machine learning.
Frictionless/autonomous ‘grab and go’ retail concepts that use computer vision-based AI and remove the need for checkout are gaining traction, particularly within the grocery sector. Pre-launch trials for Verizon’s 5G Edge Cashierless Checkout found that transaction times were cut by half, transactions were increased by 78% and revenue by 138%.
Embrace technology to help sustainability
The future of retail will be both technologically and sustainably driven, underpinned by advances in transparency, circularity, data and intelligence, and new digital communities. As environmental concerns grow, we are witnessing a shift away from conspicuous consumption of physical products.
Consumers are increasingly seeking out ethical brands and retailers that align with their values, looking for those that help them to live and consume in a better, more sustainable way. Awareness of the escalating climate emergency, the rise of inequality and the damage caused by excess consumerism is motivating people to significantly change their purchasing behaviour. Sustainability concerns dovetail with frugal mindsets to raise expectations in relation to saving resources, longevity and circularity.
Mary ‘Queen of Shops’ Portas said at a recent talk, “We are living in the most creative times in retail ever.” Technology is helping to speed and enrich customer journeys to previously unseen levels – where people can purchase and receive things in record time and with minimum effort; where data is used to treat us as the individuals we are; and where hybrid physical-digital formats can provide truly immersive experiences.
But as well as giving customers the deep level of involvement that they crave, brands that will continue to win the hearts and minds of the nation are those that act with a conscience – not encouraging people to buy more than they need at the detriment to their mental or financial health and to that of the planet.