It has been a challenging few years for retailers, especially as they are more likely than average to face risk, according to FIS’ Global Innovation Report. With 89% of retailers concerned about rising inflation, and 78% worried about supply chain disruption, industry norms have been flipped.
As economic headwinds steer spending toward essential items and a more selective palate, it is clear that retailers must adapt to evolving consumer preferences and tech innovations.
The latest report by the Australian Retailers Association showed that Boxing Day spending was set to increase 1.6% last year, up from $1.23 billion. It is a promising sign that shows that while Australian consumers are budget-conscious, they will spend if there is a good deal.
As we enter the new year, retail-tech trends that lean towards greater customer-centricity, AI-driven innovation and increasingly embedded payments will continue at pace, but how and where these are applied is likely to change.
Digital interactions are now the norm for consumers. With everyday services increasingly interconnected with the virtual world, merchants must follow suit by developing new retail initiatives and ditch outdated practices. While the younger generation has traditionally led the charge in adopting ecommerce, social platforms, and smart devices, it is clear that older generations are not only catching up but are eager for change.
In order to stay on top of consumer preferences, the following tactics will be key in 2024:
Frictionless access to hybrid services like BOPIS and click and collect
The era of ‘Buy Online, Pay In Store’ (BOPIS) and click-and-collect has redefined convenience for modern shoppers. By seamlessly blending online and offline channels, retailers empower customers with the flexibility to choose how they want to shop. Myers, Australia’s largest department chain is one example of a long-running brand that now offers click and collect. This not only enhances customer satisfaction but also provides retailers with valuable data insights into consumer preferences and behaviours.
New ways to aid product discovery, price and feature comparison across channels
Creating excitement around product discovery is essential for capturing consumer attention. Retailers are now leveraging advanced technologies to facilitate dynamic price and feature comparisons across multiple channels. The National Basketball Association (NBA) is an example of a brand that integrates augmented reality (AR) and virtual reality (VR). They launched an exhibition in November 2023 allowing visitors to virtually experience products, making informed decisions before making a purchase.
Intuitive tools that help buyers navigate more easily in store
The brick-and-mortar experience is undergoing a transformation with the introduction of intuitive tools like QR codes and mobile apps. These technologies enable shoppers to navigate stores effortlessly, access product information, and receive personalised recommendations. As a result, the traditional in-store experience becomes a seamless extension of the digital journey.
Individually personalised offers, promotions and loyalty schemes
In the age of data-driven retail, personalisation is key to building lasting customer relationships. Retailers are now harnessing AI to analyse customer data and deliver individually tailored offers, promotions, and loyalty schemes. This not only increases customer satisfaction but also fosters brand loyalty in a crowded market.
AI-driven content, bot-support and curated offerings
The integration of AI-driven content and chatbots is streamlining customer interactions. Through personalised recommendations and efficient query resolution, retailers can enhance the overall shopping experience. AI algorithms can analyse customer behaviour, enabling businesses to curate offerings that align with individual preferences, which can lead to increased engagement and conversion rates.
The right mix of payment choice
The modern shopper values flexibility in payment options and retailers are listening; allowing consumers to pick their choice and budget responsibly. Whether through one-click payments for the tech-savvy or recurring payments for subscription-based services, providing diverse payment options enhances the customer experience and fosters trust.
With growth-hungry merchants looking for new ways to capture a larger slice of the market, delivering tech that makes stores smarter, experiences seamless and that boosts checkout choice and empowerment makes commercial sense. Merchants that understand how to fully connect omni-channels not just across touchpoints, but also across a broader range of consumer segments, will be best placed to thrive.
While payments diversify and retail tech becomes more ubiquitous, intuitive, and invisible, it’s clear that exciting new connected services are welcomed by all. As next-level retailing comes of age, it’s time for merchants, developers, and tech-providers to rise to the challenge and accept that “we are all next generation shoppers now”.
Paul Koopmans is vice president for Australia and New Zealand at Worldpay from FIS.