The Future of Retail: 3 Insights for 2024

For retailers, consumers are, and always have been, the beating heart of business success. In today’s world of ample choice for customers, this vitality is at an all-time high. Consumer buying power is higher than ever as is the importance of building loyalty and trust among them.

Retailers know it's crucial to anticipate customer needs and to deliver on promises consistently and repeatedly. Against a backdrop of disruption — growing competitive pressures, staffing challenges, geopolitical conflicts, and economic volatility — this is only getting harder.

That’s where artificial intelligence (AI) comes into play. No leader is smart or visionary enough to see the entire picture, let alone predict the whole future, on their own. They need the right tools in place to support them. Today’s leading technology solutions can infuse businesses with the power of AI in a way that opens a myriad of possibilities and countless paths to continuous success. Whether it’s the ability to predict optimal product assortments, deliver seamless personalization in-store and online, anticipate demands across the supply chain, or minimize the cost of returns, these kinds of edges will give retailers the leg up they need to win in today’s environment.

AI will help retailers carve out their success in 2024 and beyond in the following ways:

Enhancing Shopping Experiences From Beginning to End

Some consumers are wary when it comes to AI, but there's no doubt they crave the overall personalization it can bring to the shopping experience. Executed thoughtfully and with clear governance in place, the implementation of AI can give retailers unprecedented insight into customer data and activity, giving enterprises the ability to tailor the buying journey every step of the way. This can mean curated product selections, the embrace of unexpected trends, optimized inventory management, or a clearer understanding of seasonal buying patterns via predictive analytics.

Put simply, AI can help companies personalize customer relationships based on what customers signal to be most important.

Optimizing Supply Chains for Dynamic Consumer Behavior

Economic uncertainty, the rise of new buying channels, and rapidly evolving viral trends are influencing customers’ shopping habits and behavior more than ever, posing ever-increasing challenges for modern retailers. To keep up, visibility into organization-wide data is absolutely essential if enterprises want to achieve complete understanding of customers and be able to adapt to sporadic demand surges. However, the retail industry is struggling to integrate customer experience systems and processes smoothly with other key business functions.

That’s why connectivity across the enterprise is key, as it enables agility to navigate disruption and to build resilient supply chains that can withstand shifting consumer preferences. Furthermore, AI can arm retailers with real-time views and predictive analytics designed to help stay ahead of the curve via better decision making around inventory planning and the ability to proactively cater to customer demands.

Going Digital to Build Long-Term Loyalty

Almost half of U.S. shoppers say they no longer need a physical wallet or purse, opting instead for the digital wallets on their phones. Nearly all (around 96 percent) said they participate in a mobile, wallet-based loyalty program.

This shows that mobile wallets are not only becoming more convenient, but that they're becoming a way for consumers to build true, lasting connections with brands, whether vis a vis story loyalty points, redemption coupons or organized vouchers.

Undoubtedly, as customer loyalty declines and becomes more challenging to maintain, retailers will be able to leverage mobile wallets as a new mechanism for creating seamless and personalized experiences designed to foster stronger long-term relationships and heartfelt brand loyalty.

Customers expect more from retailers than ever. Even the smallest disapproval can be reason enough to move on to the next company — and never come back.

To help drive the future of their businesses, retailers need to embrace AI and its related insights to build a more secure, growth-focused future.

Matthew Laukaitis is executive vice president and general manager of consumer industries at SAP.