As retailers gear up for 2024, they find themselves in an ever-changing market … yet again. They understand shoppers and offer them value in a world where customer privacy is coveted, third-party cookies aren’t an option, and anonymous shoppers reign, representing a bulk of transactions. The technologies powering e-commerce platforms continue to evolve, but now they must factor in a new era of artificial intelligence as brands look for ways to measure and understand these new rules of engagement. Given the ever-evolving role of technology in e-commerce, here are three predictions for the year ahead.
1. Retail brands will continue to struggle with the cold shopper problem.
Despite the ever-growing connectedness of our digital lives, when it comes to shopping a majority of e-commerce transactions originate from anonymous visitors — a whopping 86 percent according to a recent study. What this means for retailers is that delivering personalized experiences has become increasingly complex when a visitor is unknown to the brand. Brands encounter a number of challenges when it comes to anonymous visitors, including profile data availability, third-party cookie deprecation, lack of user authentication, and the inability to recommend products. Given that so many transactions will be plagued by these challenges in 2024, retailers will embrace the need to address the cold shopper problem and look for innovative ways to make the most of in-session contextual signals for one-to-one personalization.
Retailers are painfully aware that consumers aren’t making it easy to personalize. We recently collaborated with RSR Research to conduct a survey of 92 U.S.-based retailers, most with revenues above $250 million. The research showed that retailers know that they need to address consumer demand for relevant offers — 59 percent of the top performers surveyed (retailers with revenue growth above the average of 7 percent) indicated that their customers only log in a quarter of the time while shopping.
Some of the most popular strategies that top performing retailers are using to counterbalance the guest login challenge include aggressively publicizing their loyalty platform to be able to personalize the shopper experience with highly relevant offers based on preferences, purchase history and behavioral models (“personas”); using in-session behavior data to determine personalized offerings in real time; and making value offers at checkout when customers ID themselves.
The shift away from third-party cookies, which Google will phase out in 2024, means marketers will need to find more creative ways to gather first-party data to drive personalized campaigns in a cookie-less, privacy-centric marketing landscape. One tactic that shows promise for collecting personalized information is email marketing.
2. Retailers will take GenAI hype to task in 2024.
Retail brands will continue to embrace and explore how to best integrate AI into the mix in 2024. Their attention will be on highlighting genuine opportunities by differentiating between quick wins, distinctive use cases and transformational initiatives. Using GenAI to generate relevant answers to shoppers’ complex questions about products is a critical use case that has the potential to create significant benefits by facilitating enablement and improved product discovery.
There are clear benefits of GenAI and AI, including the ability for retailers to measure data points to better understand the impact and return on investment of AI-led initiatives. When it comes to deploying new technology investments in particular, retailers may find these data points helpful in reducing the implied risk of both the time and financial investment that new technology requires. This trend to better track and justify GenAI investments will continue in 2024 as more brands seek ways to experience and measure their potential impact, often more aggressively than traditional proofs of concept.
3. Top performing retailers will continue increased investment in e-commerce-related tech as they eye profitability.
Successful retailers are reporting a greater focus on and investment in relevance and e-commerce-geared technology. In our research study, at least 50 percent or more of retail top performers said they’ve been increasing their tech investments in the areas of CRM, e-commerce platforms, payment processing, inventory management, and AI/personalization initiatives. For contrast, only 15 percent of the retail underperformers surveyed said they invested more in e-commerce platforms in 2023. This trend will only grow in prominence this year as the retail “winners” reap the fruits of their tech investments, with more retailers striving to achieve similar gains.
The year ahead will be one of continued change and a drive for understanding new technologies like GenAI, while also embracing tried-and-true marketing programs to create meaningful and profitable customer experiences.
Andrea Polonioli is a senior AI product marketing manager at Coveo, the AI platform built to make digital experiences delightful, relevant and profitable.
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