This article discusses four key strategies retailers should implement to maximize profits and stay competitive in the retail industry for 2024 and beyond.
Within the last decade, retailers have faced so much disruption and industry change when compared to the previous 30 years. Gone are the days of routine downtimes throughout the year. Pressure from customer demand and increasing market competition is a near constant. Leaders in the industry will continue to prioritize major investments to help strengthen key long-term initiatives to separate themselves from the rest of the industry. Retail executives must adapt to the evolving landscape of consumer behavior and industry shifts to stay ahead of their competitors.
Below are four trends that will help retailers maximize their profits in not only 2024 but also for the years to come.
The current generation known as Gen Z (those born between 1997 and 2012) shoppers will never know a shopping experience of hours visiting multiple stores to pay for goods and then bring them home. Shopping trips that once took hours now only take minutes, if not seconds, to complete. Today, customers demand the ability to pay for their goods the way they prefer, including in-store, online, or through an app.
To get even more granular, customers also want the ability to pay in full or through installments for specific products and orders. Retailers must prioritize every commerce channel. Crafting a unified omnichannel experience that ensures fluid and seamless interactions throughout the entire customer shopping journey.
eCommerce now makes up various forms, including mCommerce and qCommerce. Each type is just as important as the other throughout the customer journey. With eCommerce sales exceeding one trillion dollars in 2022, having a holistic approach to your commerce channels will allow you to help gain revenue as you are making it easier for customers to shop.
Within the last five years, the retail industry has seen a complete transformation of customer behavior. This will continue to evolve in the coming years. Customers increasingly prioritize convenience when selecting products and services. If their needs aren't met, they are likely to turn to competitors offering better solutions, as loyalty is practically non-existent. This means retailers need to offer every avenue available to deliver products, including in-store shopping, shipping, curbside, buy online – pick up in store (BOPIS) and same-day delivery. Finding a strategic partner like AutoStore offers an end-to-end solution of products putting omnichannel order fulfillment at the center of every order journey.
Delivering on performance will drive more revenue for companies. If it takes too long to receive an order, research shows half of your customers will shop elsewhere. To maximize profits, retailers will need to exceed customers' expectations and find a balancing act to deliver products in a price conscious manner to the organization.
Automation and robotic technology in supply chain operations allow retailers to unify commerce channels and omnichannel fulfillment, centralizing a brand's operations. Automation can address cross-channel orders at a higher rate of accuracy and productivity. There is greater potential to increase profits in a scalable and efficient manner, by removing “profit eaters” in the form of enhanced labor costs for in-store picking and the added logistical costs that go hand-in-hand with a workforce.
As demand among customers continues to rise, and expectations for fast delivery become the norm among customers, it is vital to maximize every aspect of existing operations where possible. Supply chain disruptions can cause significant negative losses in terms of finances (62%), logistics (54%), and reputation (54%).
As demand continues to rise, expectations for fast delivery become the norm among customers. Automation ensures faster order processing with greater accuracy.
Customer returns are a thorn in every retailer executive’s side. It’s a substantial loss in revenue. From the postage expense to the rising fuel and labor costs, retailers are desperate to find new ways to be more efficient. In 2021, returns accounted for $761 billion in annual lost sales for U.S. retailers. And that number is only likely to continue to increase each year.
Discovering why customers return products in the first place is a good first step. Better analytics and technology can help reduce the amount of returns retailers receive. For example, AI can help customers determine if products are exactly what they want or need. Recent findings suggest there is a 40% reduction in returns when customers can visualize products in 3D.
Finding the right strategy to decrease returns or creating a convenient way to sell returned items will help with your bottom line. Another example is using data analytics to suggest new styles, colors, and sizes based on the customer's purchase history and preferences. This fosters a more engaging customer experience and promotes loyalty through a seamless customer experience. In addition, taking advantage of in-person returns, whether it’s at your own store or a designated drop-off location, will save on postage and fuel costs.
Navigating the fast-paced retail landscape of 2024 and beyond requires foresight and adaptability. The accelerated pace of change, fueled by rapid technological advancements and evolving consumer expectations, emphasizes the need for an agile and innovative approach to your entire order fulfillment operation. A retailer's success will be determined by its commitment to enhancing multiple commerce channels, often within the same purchase journey, to ensure a seamless shopping experience.
Furthermore, advanced integration of automation within supply chains will be crucial for operational efficiency, and for keeping up with customer demands on speed, accuracy, and convenience. Retailers must strategically position themselves at the intersection of technology and customer-centric experiences to stay competitive moving into 2024 and beyond.