New season, new start – what’s next for the retail sector
As retailers look to unveil the new products of the season, there is an opportunity to start afresh – and consider how best to evolve operations to meet the demands of an ever-evolving breed of customers. While this is no small undertaking, it does provide a real opportunity to enhance the customer experience and keep ahead in a notoriously competitive sector.
Central to capitalising on these opportunities is an increased investment in technologies to bring retail operations into an increasingly digital world. Research from Contact Babel suggests that the uptake of digital channels in the retail sector will represent the biggest proportion of expected technology growth over the next two to three years. In fact, Contact Babel calls out email management technology and web chat, alongside AI and interaction analytics, as the key areas that retailers will invest in.
Beyond this, there are some universal trends that are likely to impact all retailers throughout the remainder of this year, which will have a bearing on the strategies they employ to better serve their customers. Here are our top four:
1. Retailers must do more with less
The economic headwinds dominating news pipelines over the last year show no sign of abating and retailers should be braced for customers being more considered with their purchases and more discerning about which brands they choose to engage with. This, together with the UK retail sector’s continued labour shortages and the rising cost of doing business, will force retailers to be more creative in their attempts to appeal to a broader range of customers and stand out from the competition, particularly as they continue to grapple with reduced headcounts and budgets.
This is where tools such as AI can drive new efficiencies, create economies of scale, and provide competitive advantage. With most calls to retail contact centres transactional, low complexity enquiries, which are relatively quick for Contact Centre agents to resolve, retailers have a prime opportunity to embrace automation. In fact, applying AI to routine requests will free up customer service agents to engage in more transformational work and enable customers to get quicker responses, boosting the overall customer experience in the process.
2. There will be a step change away from siloed channels towards cohesive journeys
According to Deloitte UK, more brands are becoming “digital by design” and the retail industry’s continued investment in digital channels supports this view. However, bricks and mortar establishments are still important assets to brands – even as they evolve on-site operations to meet the needs of a new breed of shopper.
Retailers will need to think more strategically about how to connect each of the individual customer touchpoints in order to create a cohesive journey – linking high streets to websites and chatbots. To be truly successful, these channels must not be viewed as siloes. Rather, brands must connect these interaction points and their associated data, to gain a complete view of the customer across every interaction. Retailers will have to shift gear if they are to succeed. Instead of rolling out new (siloed) solutions to meet customer demands, they need to be more strategic, considering the overall customer journey so it’s consistent across all channels.
3. Retailers must prioritise investment in understanding customers better
At the heart of achieving a cohesive customer journey must lie a desire to deliver more personalised services to customers. Retailers looking to better engage with customers must become more thoughtful about individual experiences, introducing more experiential shopping experiences on the high street, and tailoring communication to ensure that customer interactions are both timely and relevant each and every time.
Technology such as AI can help to deliver such personalisation at scale – however its full benefits will only be realised if a retailer’s data is in order. Gathering meaningful customer insights is key to successful implementation here, which means compiling high quality feedback from customer conversations across every channel to gather a comprehensive view of the customer.
4. Delivering ‘good outcomes’ is no longer optional
Getting data in order and understanding customers better will always stand retailers in good stead. However, these attributes are no longer just optional. The Financial Conduct’s Authority recently introduced Consumer Duty mandates that retail organisations must deliver ‘good outcomes’ when communicating with customers and recommending products and services. Introduced in July 2023, Consumer Duty adherence is still a new requirement, and something retailers will need to give their full focus over the coming months.
Ringing in the changes
The key to unlocking success within the retail sector ¬¬will be an unwavering commitment to the experience of the customer. Brands which strive to move ahead of the pack will seek to better understand their customers, tailoring their approach to meet their ever-evolving needs, and ensuring that their journey – irrespective of which channel they use – is both seamless and smooth.
The rewards for those who successfully ring in the changes are great, offering the potential to streamline customer journeys, optimise resources and increase sales and margins. A world of opportunity clearly awaits; let’s see which brands make their mark.
By Sam Grant, Sector Specialist, Retail, IPI
