The world faced many challenges in 2023, with high inflation and interest rates impacting the cost of living and business budgets. As a result, retailers had to adapt to the ever-changing financial landscape and look for ways to survive in their respective markets.
In 2024, retailers must home in on strategies that not only enable them to adapt to inevitable changes, but also establish connections with their customers. Here are some strategies to focus on:
Authenticity as a guiding principle
Being transparent and ethical is crucial for authenticity, especially in building relationships with customers. As each year passes and customer behaviour changes, brands become more susceptible to shopper scrutiny. They are no longer judging businesses on price and product, but on everything from supply chain and materials to the mission and ethos. It is vital that a brand offers transparency and remains clear with its messaging to build a close, meaningful relationship with its customers.
For instance, sustainable and ethical production of products has become a crucial concern for shoppers. In Australia, 69% of consumers now look for the sustainable option when purchasing their items ,according to recent data on Statistica. Brands, like Patagonia, are addressing this through initiating campaigns and programs, such as Worn Wear events for trading in used gear and an activism directory on their website, allowing customers to support causes, sign petitions, volunteer, and donate money.
Tailored customer experience
Recent advances in technology, such as those in AI and machine learning, have enhanced retailers’ ability to tap into techniques like personalisation and hyper-personalisation. For instance, Zoho Analytics employs cutting-edge technologies to analyse extensive data sets, enabling retailers to create highly customised content and offers that resonate with individual preferences and behaviours. This approach ensures that interactions with customers are deeply meaningful, fostering stronger connections and enhancing overall satisfaction and retention.
With hyper-personalisation, for example, a cosmetics retailer could reach out to a customer through email, promoting a sale on a particular product that the customer recently purchased.
In 2023, data privacy – an already-prominent issue – took on even greater significance, particularly when it came to online shopping. This trend is expected to continue throughout 2024, given the heightened importance of security for both retailers and customers. The government has promised to improve privacy protections for Australian consumers by rolling out extensions to the Privacy Act, which will impact many previously immune small retailers. Failure to comply will result in fines and penalties.
However, according to Zoho’s research, only 51.8% of respondents believe that their business understands its requirements in accordance with The Privacy Act 1988. Meanwhile, almost one quarter (22.9%) say they do not understand the privacy requirements laid out in The Privacy Act 1988. The legislation concerns the collection, use, storage, and disclosure of personal information.
As worries about data privacy continue to grow, transparency and consumer control over their own data becomes imperative. This isn’t just a trend response; it’s a timeless trust-building foundation. When you visit a website, a pop-up box prompts you to ‘accept’ or ‘decline’ the company’s terms. Acceptance permits data collection, while declining signals that the customer’s data cannot be legally stored. This exemplifies a retail brand’s transparency about their business operations.
Interactive content and gamification
Interactive content and gamification remain powerful tools for capturing attention and driving user participation. By engaging audiences through quizzes, polls, and gamified experiences, retailers can increase engagement and encourage social sharing. These strategies not only captivate audiences but also transform passive consumers into active participants, creating a sense of involvement and connection.
Starbucks has implemented a gamified loyalty program, where customers receive rewards for their purchases. Members in the Starbucks Rewards program earn stars for each transaction, progressing through distinct membership levels with accumulated stars and additional perks. While your operation is likely smaller than Starbucks, there are plenty of ways to benefit through creative engagement.
Ephemeral content and social commerce
Ephemeral content, popularised by platforms like Instagram Stories and TikTok, has become widely adopted – and very impactful. Retailers should seize the opportunity to incorporate these short-lived but engaging formats in their marketing strategies. Utilising these dynamic mediums alongside the growing trend of social commerce allows businesses to directly convert audience engagement into sales – particularly for those targeting Gen-Z or Millennial shoppers. Ephemeral content creates a form of urgency, which can persuade shoppers to make a purchase quicker than they otherwise would.
Think of ‘livestream shopping,’ which has rapidly evolved in the ecommerce space on platforms like Facebook, Instagram, and TikTok. This format is being utilised to promote and sell a diverse range of products, including beauty items, clothing, electronics, and home furnishings.
The challenges of 2023 highlighted the ongoing importance of authenticity, transparency, and engaging with customers. In 2024, retailers must continue to combine innovation with approaches centred around consumer needs. By focussing on authenticity and connection, prioritising data privacy and using effective content and incentives to boost loyalty, retailers can thrive in 2024.
Vijay Sundaram is chief strategy officer at Zoho, a global technology company.