In a truly dynamic market, retailers that leverage disruptive technologies like generative artificial intelligence (gen AI) to embed themselves in their customers’ lives better are more likely to succeed than their peers relying on traditional selling methods.
Numerous retailers have displayed remarkable resilience over the past year, cultivating empathy and delivering personalization despite an uncertain landscape. Recent months serve as a compelling indicator that customers will engage with brands on an even deeper level in 2024. Having built trust through enhanced experiences, the challenge is for retailers to fortify this position of strength and provide even greater value to consumers.
To meet these challenges, leading retailers in 2024 will demonstrate all-new levels of agility, adapting in real time, unlocking new niches and evolving into trusted partners. Retail will be redefined in the process, with prominent brands getting more deeply integrated into customers’ day-to-day lives than ever before.
Driving New Value With Gen AI: From Optimizing Costs to Increasing Wallet Share
Gen AI will prove revolutionary in enabling retailers to respond dynamically to changes in 2024. The combined power of data and gen AI is already transforming decision making and providing retailers with democratized, actionable insights that can enable customer-centric innovation across the value chain.
Naturally, costs are one case in point. Through its ability to track and trace revenue leakages or quality issues, gen AI can help retailers streamline logistics and operations, reducing costs and driving greater value for consumers. However, it goes far beyond efficiency. The intersection of gen AI and data analytics is delivering all-new levels of consumer understanding, with one business achieving 18 percent higher customer happiness scores through communications created with the help of the technology.
Higher-quality data and sophisticated analytics are resulting in comprehensive 360-degree views of customers across all channels and touchpoints. This is unlocking niche, consumer-oriented approaches to all aspects of retail, with merchandising being a prime example. Through enhanced predictive capabilities, retailers can do things like adjust their private label brand mix in near real time and provide customers with lower price points on new products in new categories that were previously untouched.
2024 will see sophisticated retailers push this even further. One leading retailer is using the power of gen AI and analytics to create customized campaigns based on each customer’s preferences. This demonstrates how gen AI can be used to drive higher sales and increase loyalty and customer intimacy. The campaign clickthrough rate surged significantly from 2 percent to 8 percent, indicating a four-fold increase in campaign productivity and effectiveness.
Enhancing Retail’s Remit Through Customer-Driven Commerce
The notion of intimacy and deep engagement will also see retailers work to expand their remit beyond pure retail, evolving from brands to trusted partners. Empowered with enhanced insights, 2024’s leading retailers will identify new opportunities to integrate capabilities within their customers’ lives.
Buy now, pay later (BNPL) programs are a prime example, offering customers greater flexibility and poised for proliferation in 2024. Leading retailers will push the envelope further, experimenting with customer-driven options like tie-ins with travel and hospitality brands or offering access to adjacent but complementary experiences. Once again, gen AI will prove integral in shaping these services, with synthetic data generation capabilities providing transformative insights into customer sentiment.
Looking Ahead
Whether driving greater value for customers or offering new services, retailers must embrace disruptive technologies to flourish in 2024. This requires expertise and access to digital talent, given the dynamic and fast-paced nature of the business landscape. Retailers with access to best-in-class talent and the latest technologies will not just benefit from increased wallet share, but also have a more significant impact on their customers’ lives. The immense possibilities that emerge from technologies like gen AI are all set to transform the very essence of retail.
Manish Vora is the business unit head of manufacturing, retail and consumer products at WNS, a global business process management company.
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