The Future Of Retail
Where Are We Headed?
Image: AREE / Adobe Stock
The novel ways of conducting business a few years ago are now the norm thanks to the quickened pace of the evolving retail environment. Setting yourself apart from the competition today requires new and innovative ways of engaging with customers and closing sales.
To start the year off right and highlight potential, let’s explore the opportunities and challenges for 2024 and the direction retail is heading.
Election Year Bump Expected
With 2024 being an election year, there’s bound to be an increased interest from consumers in our industry. Historically, we generally see a bump in business, but for 2024 the ways to capture those valuable consumer dollars are starkly different than they were in 2020.
In 2020, the catchphrase was “Omnichannel Retail.” This essentially meant letting the consumer shop when they want, how they want and where they want. As a result, retailers needed to add an e-commerce presence to their portfolio. It also meant offering services like order fulfillment where a customer could have the products shipped right to their door.
Last but not least, the last election cycle also brought to the forefront the idea of BOPIS or “Buy Online Pick-up In Store.” These were all the hot-to-trot trends of the era.
Flash-forward to 2024 and all those ways of doing business are the norm, rather than the exception. For those of you still not implementing these ways of doing business, 2024 should be a wake-up call to evolve!
CTV & Livestreaming Potential
So, where will 2024 lead us? One of the biggest growth trends retail is experiencing is being called “CTV” or “Connected Television.” (Think: QVC evolved.)
Sarah Travis, a senior VP at Target, has gone on record to say, “Shoppers can now scan a QR code in a Target ad they see on their TV screen at home and seamlessly add products directly to their cart for in-store pickup.”
I’ve personally experienced this sort of product marketing and it works!
How can the firearm industry embrace this new way of doing business? Incorporate these same sorts of QR codes into your marketing pieces, be it TV, social media or direct-to-consumer marketing and drive customers to your e-commerce website. Better yet, develop an app for your store to close the sale even faster!
An extension of this also seeing rapid growth in the U.S. retail market is Livestreaming retail. In a recent Forbes article (“Livestream Shopping Is Not Going To Take Over E-Commerce”), contributor Nikki Baird stated the Livestream market in 2022 was roughly $20 billion and represented only 2% of national e-commerce sales.1 Global models, particularly out of China, indicate growth in the U.S. market could see Livestreaming swell to 20% of the e-commerce market.
Suffice it to say, those who adapt to this way of doing business would be poised to be the early adopters and dominate a potentially growing sector of our market. The fact Livestream retail also includes entertainment means it can bring a fresh and new way of engaging with customers, establishing customer loyalty and, ultimately, convert into more sales and profits.
Using AI To Battle Compressed Margins
Speaking of profits, retail indicators highlight 2024 is showing to be a year of margin compression, where consumers will be focusing on price and value more when they take their purchasing journey. So how can we overcome this concern and maintain our bottom-line profits? Two letters: A and I. Yes, artificial intelligence.
“Retailers must shift their perspective on customer service interactions, including chatbots and email, from a mere transactional cost-saving approach to prioritizing authentic, humanistic experiences. Generative AI is an opportunity to deepen customer relationships and make customers feel respected and cared for, at scale,” said Sara Alloy, head of experience for the retail industry at Publicis Sapient.
Realize it or not, many retailers you have interacted with in the past year or two had you engage with an AI-driven chatbot. Deploying AI-driven chatbots on a website or an email allows businesses to create a far richer and more personalized experience for customers, while at the same time reducing the staffing overhead.
SMS Messaging
How else will consumers connect with retail in 2024? SMS text messaging represents another attractive option.
In 2023, Americans checked their phone an average of 144 times a day.2 By leveraging your customer database, you can make laser-accurate marketing campaigns via SMS. Based on broad industry studies, SMS text messaging has an open rate around 98%, higher than any other form of outbound communication, and is shown to be the most preferred means of communication between retailers and their customers. With companies specializing in SMS text messaging in the firearm retail space, there is no reason not to add this to your portfolio.
Use Data!
Lastly, one action every single retailer reading this can take today (though you may go kicking and screaming along the way) is to utilize both store-level as well as industry-level data to make planning decisions.
Access to data has never been easier via the store-generated data in your point-of-sale system (see the recent SI article, “Points Of Surprise!”) as well as subscription services giving a more industry-wide perspective. In times of market uncertainty, increased costs of doing business and price-conscious customers, optimizing the use of your cash through thoughtful leveraging of data will be a key facet of success in 2024.
As noted in the beginning, the evolution of retail continues to accelerate every year. It takes a thoughtful plan and a forward-looking vision just to keep pace. My encouragement to everyone reading this in 2024 is to onboard at least one new way of evolving your business to meet, if not exceed, the customer experience expectations going forward.
