The retail landscape is rapidly evolving to meet changing consumer needs. In 2023, 74% of industry professionals thought that the act of shopping is shifting towards being a process that consumers can engage in anytime, anywhere and on any platform, based on Euromonitor International’s Voice of the Industry: Retail Survey (fielded July 2023). This shift has driven increased investment in digital customer experiences. However, retailers also prioritise enhancing the in-store shopping journey, leading to innovations across online and offline channels.
Euromonitor International’s Retail system tracks new concepts and other innovations across channels globally. This year, the new concepts being explored feature five themes, with three of these themes powered by technology. These three themes are New Digital Interfaces, Simplified Shopping, and Data-Driven Retail.
New Digital Interfaces
Retailers and brands are embracing novel digital interfaces such as social commerce, livestreaming, AR/VR, and the metaverse to engage consumers online. These technologies enhance online experiences and offer innovative ways to transact, catering for the preferences of younger generations, including Generation Z.
Retailers have been exploring various solutions within digital interfaces.
One in three retail industry professionals indicated that their businesses enable consumers to make purchases through social media transactions
Source: Euromonitor International’s Voice of the Industry: Retail Survey (fielded July 2023)
Upcoming investments will prioritise adding new transactional features to social media, enhancing online consultations, and leveraging livestreaming even more. These efforts reflect retailers’ recognition of the importance of connecting with consumers through engaging experiences. Amazon, for instance, introduced “Consult-a-Friend” in October 2023, enabling users to seek feedback on potential purchases from friends and family via their preferred social messaging app. Following growing social media popularity, TikTok introduced TikTok Shop in Vietnam in April 2023, offering a platform for retailers, brands and content creators to promote products. Consumers can directly purchase featured items from livestreamed videos on TikTok. Major brands such as Samsung and Unilever have expressed interest in this new platform.
Simplified Shopping
Retailers are actively streamlining the shopping experience, implementing frictionless checkout and fulfilment both online and in stores. Simplifying the journey helps eliminate pain points, minimise waiting times, and enhance customer satisfaction. By doing so, retailers create space to introduce new products and formats, meeting consumers’ expectations for intuitive, enjoyable and efficient shopping experiences.
57% of retail industry professionals indicated that improving the customer experience is a strategic priority over the next 12 months
Source: Euromonitor International’s Voice of the Industry: Retail Survey (fielded July 2023)
Retailers are placing a strong emphasis on improving product visibility and selection, whether in bricks-and-mortar stores or on digital platforms. This is especially vital online, where the endless number of choices can overwhelm consumers. Technology, particularly AI, plays a crucial role in simplifying the shopping experience by facilitating faster product discovery, ensuring timely price updates, and offering personalised promotions such as coupons and loyalty-based discounts. Personalising product offerings based on individual preferences, such as past purchases or user profiles, is becoming increasingly important. Retailers like Walmart are at the forefront of this trend, leveraging AI-powered solutions to help shoppers find specific items based on prompts and automate the reordering of previously bought products.
Technological advancements are simplifying shopping experiences for diverse consumer groups. In March 2023, tech startup Inklusiv launched an app to help people with disabilities shop at Danish businesses. The app features a searchable database of accessibility features, maps of business locations, and customer reviews. Users can also book customised assisted shopping trips.
Data-Driven Retail
Retailers and brands are harnessing the potential of data, advanced algorithms, and AI to enhance both back-end operations and the customer experience. This includes improving inventory management, supply chains, pricing, marketing, and more.
Retailers have adopted AI technology to optimise operations and provide personalised experiences to consumers.
43% of retail professionals recognised AI as the most influential technology in retail in 2023
Source: Euromonitor International’s Voice of the Industry: Retail Survey (fielded July 2023)
As a result, utilising data has become essential for decision-making in retail. AI-powered tools such as machine learning algorithms improve supply chain management and price optimisation. ChatGPT and other AI technologies drive innovation in online shopping experiences. As personalisation becomes more intuitive and less intrusive, an increasing number of consumers are willing to share their personal data to receive personalised deals. In 2020, 37% were open to sharing their data for this purpose, rising to 42% by 2024, based on Euromonitor International’s Voice of the Consumer: Lifestyles Survey. This growing acceptance of personalised marketing strategies reflects consumers’ desire to optimise their purchases.
In 2023, data-driven innovations transformed retail, impacting both front-end and back-end operations. Mexican conglomerate FEMSA’s retail arm, Oxxo, partnered with Finnish tech company Relex to optimise its supply chain and retail planning across 22,000 convenience stores. Using machine learning and AI, this software enhances operational predictions, optimising the supply chain and implementing customer-centric strategies. Alibaba’s Tmall launched Wenwen, an AI-powered feature assisting merchants with copywriting, images and customer service for the Chinese 11.11 shopping event. By November 2023, Wenwen had garnered over five million users and facilitated 1.5 billion interactions, aiding consumers in securing discounts for optimal deals.
Looking ahead
Over the next five years, the primary focus for retail industry professionals will be growth and expansion. As such, 45% of them intend to prioritise investment in new technologies over this period, according to Euromonitor International’s Voice of the Industry: Retail Survey (fielded July 2023). Given the transformative impact of technology on retail in recent years, continued innovation in this area is expected to shape the industry’s future.
To delve deeper into retail innovations and examine relevant case studies, read our strategy briefing, New Concepts in Retail.
To further explore the impact of generative AI on the operations of retailers and brands, read our strategy briefing, Top Five Digital Consumer Trends in 2024.
