Olvin - 28/10/2021
5 key trends for 2022
With talks of a post-retail world, lockdown-induced closures of non-essential stores and the always looming threat of Amazon and other e-retailers, the outlook for physical retail lately looked somewhat bleak.
At the risk of sounding trite, the emergence of the Covid-19 pandemic has reshaped the retail space like no other – and while things at the time of writing of this article look slightly better, the coronavirus is here to stay.
Keeping that in mind, but looking towards the future with hope as well as excitement, we have identified 5 key factors – one of which, as you might have guessed, is the increased use of AI systems providing retail predictive insights – will likely shape the future of retail in 2022 and beyond.
Customer convenience remains king
Fueled by e-commerce’s undeniable success in offering same- and next-day deliveries, consumers now demand quick and relevant service. This culture of immediacy, if anything, has only increased in the last two years. Businesses will continue to make strides into improving customer convenience and ease-of-buying. A potent example of this type of frictionless shopping, as the Wall Street Journal calls it, are Amazon Fresh’s self-service stores, where grocery store items are automatically scanned and charged the moment they are placed inside the cart – no check out or employee needed. Other such technologies are smart carts introduced by the likes of grocery chain Kroger. The upside of serving customers in this way are the troves of data created for AI-driven platforms to streamline operations by optimizing supply chain planning and improving customer service, among other capabilities.
The continued rise of e-commerce
The pandemic has – if anything – further cemented the reality of continuous e-commerce growth. Consumers now expect retailers to have an online presence. In other words, it is now perceived as the bare minimum. The penetration of e-commerce in total retail spending now hovers around 20% in the US, and while there has been a slight decline versus the heights of the pandemic, this overall upward trajectory is set to continue to increase in the coming year. LinkedIn figures even state that over 80% of consumers prefer the online buying experience. That does not however mean that physical stores are set to disappear anytime soon (or as we would dare say, ever!). Retailers instead will have to continue building their omnichannel abilities while not neglecting their stores as vaccinated U.S. consumers flock back into physical spaces in droves.
Sustainability and compliance at the forefront of consumer wants
Today’s breed of conscious consumers care a great deal about sustainability, inclusivity and compliance. They possess greater awareness of the environmental and social impacts their purchases are having, and in turn demand greater transparency and accountability from brands and retailers. Loyalty for the sake of it (like in ye good olden days) is no longer a given, and consumers do not shy away from switching sides based on their values. Paying lip service to causes (also called ‘woke washing’) no longer suffices, and businesses are expected to translate their promises into action. According to Unilever, sustainable business practices could translate into US$ 1.1 billion worth of untapped potential alone. The businesses that will survive – and better even – thrive, will require attunement to constantly shifting consumer desires matched by an ability to empathically meet them at lightning speed. It may well be the year where agility becomes more than a buzzword.
Welcome to the experience economy
When it comes to brick-and-mortar, effectively challenging e-commerce means providing tangible added value. Luring consumers back into physical spaces will take a creative approach or two as consumers no longer see going to the shop as being about convenience or price-point alone. For certain businesses, immersive experiences will no longer be optional – think of applications of maturing technologies like AR and VR to augment the shopping experience. AR for instance can be used to preview the look of a piece of furniture in a costumers’ home. Customer engagement will depend on the ability to be ‘wowed’ and to feel catered to in a way that does not scream ‘generic’. Forward-thinking retailers will invest in personalization and technology and turn their shops into true shopping destinations consumers want to come back to time and time again. For retailers, that translates into a focus on store quality, not quantity.
Increased application of AI-systems in business planning
The evolution of artificial intelligence has reached a turning point, one where access to sophisticated AI systems is no longer destined for the few but instead accessible to the many. This means that an increasing number of businesses will start capitalizing on the power of AI in helping to optimize supply chain decision-making by connecting the dots between discrete data points, e.g. by analyzing online and offline consumer activity. Whether it is to get in-depth knowledge about shifting consumer behaviors and its impacts on demand forecasting or to make price adjustments, AI systems will increasingly be used to make better informed decisions. According to Gartner, AI will be used to improve business operations by 77% of retailers in the next few years.
This democratization of AI in business means that tools like predictive analytics are no longer out of reach. This has particular relevance for retail businesses: retail predictive insights can help better understand consumer buying behavior, for instance through consumer location-based AI prediction. As businesses start reaping its benefits and turn towards a post-Covid recovery plan, one thing is sure: A surge in spending on AI is bound to happen in 2022. The future of retail analytics is indeed looking bright.
AI tools like our very own Almanac can help businesses enhance their decision-making by sharing insights around visitor trends and relative performance, among other things.
Those businesses that will put their agile mindset to work, and turn towards innovative technologies to augment their planning and decision-making capabilities while focusing on speed, relevance and convenience will be the ones best equipped to deal with our rapidly changing world.
If you want to delve deeper into the myriad ways AI can help unlock the value within your data, Olvin’s team is here to help.
Olvin is an AI-powered solution focussed on predicting consumer intent. It leverages billions of real-world data points in a powerful yet easy to use platform. This enables businesses of all sizes to understand what drives their customers in the real world.
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