A Forecast on Future Retail Strategies

Subconscious commerce with AI, Combating fraud with NFC tags and more: retail approaches to look for in the upcoming years.


29 May, 2024

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As the world is going through enhanced confidence in consumers and decreasing inflation, brands and retailers must plan for a proper welcoming for the future to improve their efficiency in business and increase sales. There will be an intense threat to production with automation and a need for a security solution as the technology is growing. With confidence building up, the consumers will invest in low-cost products and create memories. Opportunities will come in handy with a noteworthy performance of AI. As there is a hike in global warming, the indoor economy will get more attention.

Let us have a look at the possible strategies to witness in the retail sector.

Commerce Through Subconscious

Understanding the right products for the right customers at the right time has been a challenge for retailers and brands for years. However, with the assistance of advanced data analytics and AI technology, they can predict the consumers’ needs and desires.

Use AI to provide a personalized list of products with an immersive shopping experience for the consumers. The technology can also help in hacking into the customers’ decision-making skills. The retailers have to adjust the store with domestically-edited concepts and use consumer data analytics to know the local neighborhood they come from to work on the store design space. Shein, with the help of AI, analyzes customer activities and forecasts the shoppers’ demand.

With inflation affecting the predictability of consumer spending, retailers have to incorporate the technology to build a sustainable manufacturing process that focuses on supply to demand. They can use blockchain technology with AI to make an optimized supply chain, which, as a result, can decrease the errors by 20%-50%. ASOS has a demand forecasting model that was trained on former revenue, product popularity, returns, and trends.
Instead of going with a pricing strategy based on consumer demand, work on an optimized AI-powered pricing system. Levi's uses AI technology to optimize its pricing on a global level by considering the weather, past prices, the economy, social media trends, and consumer sentiments.

Value-centric Sales

Instead of traditional discounts and promotions that prioritize hacking through margins, retailers can give a meaningful service that can be valued by the customers. Value-driven discounts can include birthday discounts, complimentary gifts, bundle deals, and free expedited shipping with post-purchase rewards. It is crucial to optimize an excellent customer experience with continuous assurance of whether the loyalty programs provide rewards. Freitag allowed customers to buy a bag free for Singles Day and Black Friday. Shein and Temu offer their customers a large quantity of low-priced products and big discounts to lessen the price pressure.

Retailers have to keep an eye on the discounts offered as a constant offering can set a customer expectation which becomes a routine. It will also anticipate the customers to buy the products at reduced costs. Globally, the minimum discount the shoppers see as a good deal is 30% off. Dropping discounts and offers for an indefinite period is an ideal option. One can consider one or two discounts yearly, personalized promotions through email, and targeted discount offerings. It is alright to opt out of a sales event. Rixo of the UK skipped its Black Friday discounts and sales in 2023.

US’s Grey Bandit gives a 15-20% buffer on retail price which will eventually go on sale to balance its lower promotion prices and make up for the future discounts. Maison Miru offers products in a seasonless assortment with the best-selling item sold at full price always.

Fight Against Fraud

Brands and retailers must be ready for more cyber-related frauds which can cost millions by 2025. Policy abuse has become a popular issue among 90% of e-tailers worldwide. The return fraud alone was valued at $101 billion in the US in 2023. People are taking advantage of these friendly policies. Not preventing this fraud will not only affect the sales but also play with reputation and raise operational costs.

The sellers have to limit consumer-friendly returns and refunds and encourage exchange instead of returns. Reviewing the policies again and closing possible loopholes is crucial. They have to create an emotional bond with the customers by providing personalized services and products to make them less likely to commit fraud. The returned items have to be checked thoroughly through scanning technology. Zara charges its customers for returns and H&M provides free returns for the members of its loyalty program.

There are digital IDs that can be used to authenticate and keep track of the products. Moroccanoil has a concealed digital code for each product that needs to be scanned by the staff before selling. Through Aura Blockchain technology and the NFC tag, Tod's has incorporated digital passports for its Di Bag which authenticates the product. Moncler used NFC technology to avoid counterfeits produced in China.

Unfortunately, social media plays a crucial role in this issue. These return frauds are getting increased because of some consumers supporting this policy abuse in TikTok. #RefundMethod touched 12,1 million views as of January 2024. Here, the brands and retailers can work with influencers to raise awareness against these issues. Zoe Rammie, a digital creator, is offering tips for users who spot fake K-Beauty products. TikTok collaborated with an authentication specialist Entrupy to eliminate the sales of counterfeits in TikTok Shop.

Show the Caring Side

Amplifying a caring and kind narrative is another strategy for retailers. The brands have to build equitable and support-the-good kind of strategies to grab the attention of today’s consumers. The strategies should lighten the moods of those in need like the people living a solo life. They need ways to keep their shoppers as well as staff satisfied and happy. To show that they care, the sellers can work on rewards and donations to business models that can educate and enhance the talents. Communicating with the partners and employees regularly and ensuring a calm course in finance with transparent donation-making are other valid strategies. UK’s T Label’s official website has a whole page dedicated to explaining the money it has raised and for which charity. Ninety Percent is giving 90% of its profits to the employees who work on the collections.

Retailers can attempt to become a default emotion in the lives of their customers. They always need to consider the positive reflection their products and services have in the consumer's mind. Generosity is a key feature of this topic. Retailers can create brand-powered free initiatives that give the people and let them do the same. The Kindness Foundation by Kurt Geiger introduced a seven-month-long business course that assists young people from under-represented people to cope with work.

Beware of Extreme Weather

Earth is currently facing extreme weather which was not seen before and it is expected to become more intense and a potential risk for businesses by 2025. Therefore, retailers and brands have to evolve and be reflective of the swift conditions with a flexible strategy for merchandising, product development, and supply chain.

Geoskincare is taking the center seat in the beauty and skincare trends in 2024. One should notice that the skincare that focuses on combating pollution is estimated to reach $15,2 billion by 2033. Consumers are expecting the brands to create adaptive and versatile products that can be used in this condition. Intense exposure to pollution and UV rays today can accelerate the skin aging process. In the future, the intensity of this issue is projected to get worse. Moreover, the climate is forecasted to be more unpredictable and unreliable. Therefore, the consumers will be expecting to get climate-tracking skincare products.

This extreme weather is expected to affect clothing exports worth over $65 billion and jeopardize around 1 million employees’ jobs in the fashion and apparel industry. To overcome this problem, retailers have to be more quick in determining which products are selling well and order them accordingly. Replenishing inventory at every level is important. It is ideal for them to be more transparent and honest with their suppliers to avoid any fluctuations in derived demands. The procedure must be shiftable and each process must have a backup plan such as an extra inventory in a different location and another distribution approach.

It is the brand and retailer’s responsibility to cover for their staff in this situation. They have to work on modifying their outlets to be more adaptable to the outside weather, along with providing refreshments to the shoppers and allowing the employees to take more breaks. Additionally, they can take steps to protect the farmers and factory workers, who are the active parts of the sourcing and manufacturing processes, with community programs and supplying essentials.

Marfa Stance of the UK has dropped a jacket with removable collars, liners, and hoods - allowing customers to build their own jacket in a particular climate. Pour Moi has labeled itself to be the first-ever climate-focused skincare brand, presenting products that are created to be used in specific locations of the US and climates. Techniche UK has launched StayQool suits which can be used by the outdoor workers under the intense heatwave. It features cooling collars and cuffs as well as waterproof inside and mesh outside.

Cover Image: Moncler NFC Tag, courtesy LSA Magazine.