In 2024, e-commerce will transform into a dynamic realm of interactivity and personalization, surpassing all previous expectations. 75% of consumers are more likely to buy from brands that recognize them by name, recommend services based on past purchases, and knows their purchase history. At the forefront of this evolution lies the interactive shopping experience, which empowers real-time engagement and tailored recommendations to craft a unique and captivating shopping environment. The rise of virtual shopping will reach its peak, with platforms like TikTok pioneering live video shopping, providing retailers with an innovative avenue to connect with consumers on a deeper level.
To fully harness the potential of this new era of e-commerce, retailers must embrace a holistic approach that seamlessly integrates physical stores, mobile apps, and websites. This omnichannel strategy is crucial for maintaining customer retention and ensuring a frictionless shopping journey, regardless of the platform or channel they prefer.
Artificial Intelligence possesses a remarkable, often overlooked, attribute: its continuous learning capacity. As businesses in the retail, e-commerce, and CPG sectors increasingly adopt AI, its ongoing learning process not only matures the systems but also yields a substantial cost efficiency ratio.
By addressing inventory management challenges and optimizing end-to-end supply chains, AI becomes more adept at making cost-effective decisions, thereby minimizing expenses.
Simultaneously, its evolving maturity enhances productivity concepts, enabling businesses to streamline operations and make informed, efficient choices.
One of the main issues in retail today is the high return rate of purchases, since people are more likely to shop online due to the pandemic. According to AR in Retail Market Insights, 73% of consumers say that they would be more likely to purchase a product if they could see it in their own home using AR. The high cost of returns can have detrimental effects on the business and can affect their long term profits.
Google has introduced two new features for its online shopping experience: a virtual try-on feature and new filters. The virtual try-on feature uses AI to show users how clothes will look on a variety of real human models. The new filters help users find exactly what they're looking for, such as a similar but cheaper alternative to a shirt or a jacket in a different pattern. These new features are designed to help users make more informed decisions about what to buy and to avoid disappointment with their purchases. In this case with the help of AI, this helped retailers to reduce returns and at the same time to personalize the overall shopping experience.
An e-commerce chatbot is designed to facilitate and streamline online commerce and retail experience, it uses artificial intelligence (AI) and natural language processing (NLP) to communicate with customers, playing the role of an online shopping assistant to accompany customer during their buying process through various channel such as e-commerce website, e-commerce platforms or messaging apps. According to Gartner in their report(Virtual Assistants: A Global Market Outlook, 2023-2028) that 66% of businesses are using virtual assistants to automate tasks.
Google’s latest AI model, Gemini is poised to revolutionize the chatbot industry, particularly in the realm of customer service. Its advanced capabilities and seamless integration with other AI tools help offer a plethora of benefits for the retail industry seeking to enhance their customer engagement and support.
However, according to a CGS survey, 86% of consumers still prefer to interact with a human agent. albeit the growing power and ability of artificial intelligence (AI). This can be seen in the likes of chatbots such as ChatGPT, Gemini, Bard, Bing Chat and Salesforce Einstein GPT, which have been continuously growing at an unimaginable pace. In 2024, the adaptation of AI Chatbots will witness a huge growth, creating more leveraged user experiences that will be able to handle complex situations, and be more adaptable in order to give customers a more personalized experience.
Technology in the beauty industry will witness a large growth in 2024 with the increased utilization of artificial intelligence, virtual reality, and augmented reality applications. These new additions offer personalized and engaging beauty experiences, track well-being metrics and help conduct virtual wellness consultations.
Sephora recently shared its plan to introduce Smart Skin Scan, a new skin diagnostic that would allow for enhanced personalization for its customers. Advancing past its predecessor SkinIQ, the personal data captured in addition to the data from ColorIQ diagnostic, will allow Sephora to tailor their entire onsite experience and enhance in-store clienteling. This will lead to increased conversion across multiple channels.
Another innovative use case in the beauty sector was announced this year at Viva Technology Paris by L’oreal. They showcased their new augmented beauty devices with cutting-edge diagnosis tools for skin and hair as well as one billion packaging units with a QR code to augment the consumer experience. 60% of consumers are interested in using AI-powered makeup recommendations. (L'Oreal, 2023)
One of the most significant ways in which AI could change the pharmacy practice is through medication management. AI can help assist pharmacists in managing their medication inventory, predict medication demand, and identify potential drug interactions and adverse reactions. This can help pharmacists make more informed decisions about prescribed medications and how to effectively manage medication regimens.
With the help of AI, pharmacists can provide personalized medicine to their patients by analyzing patient data: medical history, allergies history and medication usage. With the power of Data and AI, this enables pharmacists to identify patients who may benefit from personalized medicine, as well as identifying patients who may be more likely to respond to certain medications or be at higher risk of medication-related complications.
Within the last mile delivery landscape, the new trend is to utilize Micro-fulfillment centers which are small, strategically placed warehouses that are located closer to customers. This allows for faster delivery times and reduced shipping costs and enables companies to provide same-day, or even same-hour delivery service. Customers are increasingly demanding for faster and more convenient delivery, micro-fulfillment centers help fill the gap between traditional warehouses and the end consumer.
Today’s omnichannel experience is built on sophisticated, unified engagement with customers across all sales channels including online, in-store, and mobile. By implementing Omnichannel Fulfillment, retailers can provide a unified customer experience, no matter which channel the order is placed.
Companies are increasingly investing in advanced technologies such as drones, robots or self-driving vehicles to streamline operations and reduce costs. The adaptation of Artificial Intelligence (AI) and machine learning is no longer a buzzword, and is becoming a necessity for staying in the game.
To have a unique in-store experience doesn’t necessarily mean to adapt a high end technology, or a high cost implementation. On the contrary, to leave an impressive in-store shopping experience retailers need to go back to the core objective which is to provide a seamless and memorable shopping journey for customers.
Loyalty programs are expected to continue to play a crucial role in retail in 2024 and beyond. Here are some key trends that will shape the evolution of loyalty programs in the coming year:
Loyalty is based on positive experiences, brand reliability, trust, and overall satisfaction; essentially a positive perception of the brand. A personalized rewards experience is highly anticipated by the consumer. Retailers nowadays can use data analytics to tailor for each customer base on individual customer preferences, encompassing not only purchase history but also lifestyle, interests, and aspirations.
At the same time, the introduction of Artificial Intelligence (AI) into loyalty programs will enhance personalization and efficiency, utilizing AI to analyze customer data, identify patterns, and predict behavior, thereby optimizing engagement and retention.
Notably, in cost terms, the direct advantage of prioritizing loyalty through the retention of existing customers, as opposed to acquiring new ones, is evident in the significantly reduced expenses associated with maintaining customer relationships.
Sustainability is becoming an increasingly prominent focus for beauty brands, as consumers become more conscious of the environmental and social impact of their choices. Brands are responding by sourcing sustainable ingredients, reducing packaging waste, and implementing eco-friendly practices across their operations. This trend is likely to continue in 2024, with brands that prioritize sustainability gaining a competitive edge.
Sustainable ingredients: Brands are increasingly using natural, organic, and recycled ingredients in their products. This helps to reduce the environmental impact of the manufacturing process and also appeals to consumers who are looking for clean and ethical beauty products.
Reduced packaging waste: Brands are using recyclable, reusable, and compostable packaging materials whenever possible. They are also reducing the amount of packaging they use altogether by moving towards smaller, refillable containers.
Eco-friendly practices: Brands are taking steps to reduce their overall environmental impact, such as using energy-efficient lighting and appliances in their factories and offices. They are also offsetting their carbon emissions by investing in renewable energy projects
With the rise of e-commerce, omnichannel shopping experiences, and the integration of data analytics into marketing strategies, retailers are amassing vast amounts of customer data. This data encompasses personal information, purchase history, browsing habits, and even location data. While this data can be invaluable for understanding customer preferences and optimizing business operations, it also raises concerns about data privacy and security.
Customers are becoming more aware of their data privacy rights and are demanding greater transparency from companies.
The growing awareness of data privacy issues, fueled by high-profile data breaches and increasing consumer advocacy, has led to the enactment of stricter data privacy regulations worldwide. Data privacy and security to maintain customer trust and avoid legal repercussions.
By prioritizing data privacy and security, retailers can demonstrate their commitment to responsible data handling, build customer trust, and mitigate the risks associated with data breaches and regulatory non-compliance. Maintaining a strong data privacy and security culture is becoming an essential element of responsible business practices in the retail industry.
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