Future Retail Disruption For Shoppers

Flywheel Retail Insights presented its annual report, highlighting upcoming changes to the retail world and the strategies that retailers and brands should adopt to succeed.

This report is based on the STEIP methodology, which identifies the most important drivers of change in Society, Technology, Economy, Industry, and Policy. With this STEIP methodology, we can analyze the potential implications of decisions for brands and retailers and, therefore, the winning strategies for you to invest in as you make decisions about markets, customers, resources and talent to remain relevant.

Today, we would like to discuss the upcoming disruptions in the retail industry that will directly impact shoppers.

Social commerce influences a generation of shoppers

?? The younger generations, Gen Z and Gen Alpha, are driving significant changes in the retail landscape by embracing new digital subchannels for shopping and entertainment. Their fluency in technology and social media has led them to embrace and adopt digital platforms for discovering new products, connecting with brands, and making purchasing decisions.

?? Commerce features on social platforms are developing rapidly, making it quicker and simpler to make purchases within social apps. This trend reshapes the retail landscape as businesses increasingly utilize social media to sell products and engage with customers. This new social commerce model allows for a seamless shopping experience where users can discover, research, and purchase items without leaving their favourite social media apps.

? As a content-driven, seamless, and personalized buying experience, social commerce will raise expectations for omnichannel interaction. With the rise of social commerce, retailers are increasingly looking to leverage social media platforms to connect with consumers, provide a more interactive shopping experience, and ultimately drive sales.

What it takes to win:

1. Think of the most popular social platforms as retailers and develop specific strategies to increase visibility.

2. Collaborate with content creators to ensure that the content authentically represents the products and builds trust with the customer base.

3. Allocate resources to develop skills in these new channels and use digital touchpoints to influence in-store sales.

An AI-powered path to purchase

? Generative AI is expected to revolutionize the retail and shopping experience by powering more personalized product recommendations, targeted advertising, and interactive virtual shopping assistants. This technology will enable retailers to offer customers more curated and tailored shopping experiences, ultimately leading to higher customer satisfaction and increased sales.

? Exposure to AI-powered search tools, including personal assistants and chatbots, will evolve consumer search behaviours from product-based search terms to more complex natural language queries. This shift is especially noticeable in retail and shopping, where customers increasingly use AI-powered tools to ask detailed questions about product features, availability, and recommendations.

? Frictionless experiences on the digital shelf and in stores will be increasingly commonplace as AI solutions evolve. From personalized recommendations to seamless checkout processes, AI-powered retail experiences are set to transform how we shop. With the ability to analyze vast amounts of data, AI can anticipate customer needs, streamline inventory management, and offer tailored promotions, ultimately enhancing the overall shopping experience for consumers.

What it takes to win:

1. Brands must enhance their digital shelf strategy as generative AI becomes more widespread and advanced. This could involve sponsoring specific events or product recommendations rather than relying solely on keywords.

2. It will be crucial to set up products effectively to ensure their relevance in AI-powered search results.

3. AI-powered technology has the potential to boost productivity at every stage of the value chain. It can also support the creation of personalized products that cater to individual preferences and generative AI marketing campaigns.

Consumer priorities compete for household spend

? The strain on household budgets will continue, prompting shoppers to prioritize value and seek products that align with their focus on health, wellness, and environmental consciousness. As shoppers navigate their purchasing decisions, emphasizing these values will significantly shape their buying habits.

? Consumers are increasingly seeking products and services offering proactive and preventative healthcare, with digital solutions reshaping expectations. In addition, there is a growing demand for shopping experiences that provide convenience, personalized recommendations, and seamless interactions across online and offline channels.

? With the increasing emphasis on climate change, shoppers increasingly consider the environmental impact of the products they purchase. This shift in consumer sentiment is particularly evident among younger generations, who prioritize sustainability and environmental responsibility when making purchasing decisions.

What it takes to win:

1. With consumers facing multiple pressures on their spending, retailers and brands need to provide transparency to assist consumers in making informed decisions regarding value, health, and sustainability.

2. As demographics change and consumption patterns evolve, addressing the demand for cost-effective solutions that cater to increasingly intricate care and wellness requirements is essential.

3. It is crucial to interact with and prioritize sustainable partners, as environmental reporting stimulates change and raises standards.

Today, we discussed the future of retail disruption for shoppers. We hope this information will be helpful for you and your business.

?In the upcoming LinkedIn newsletters, we will delve deeper into the impact of this disruption on retailers and brands. To stay updated with more fascinating information, subscribe to our newsletter and be the first to know.