How Will Consumers Shape the Future of Retail?

The retail sector faced the digitalization boom as a mandatory step to remain part of the market after the pandemic hit. Businesses with an online presence found themselves in a good position to continue to generate revenue and attract customers, while those that neglected digitalization disappeared. Business digitization has become a minimal requirement for companies, agreed experts. 

“The COVID-19 pandemic came to show organizations that physical stores had power but that they were not an efficient tool to really understand their clients,” said Juan Montes, Country Head, SAP Customer Experience.

Globally, 94 percent of companies are planning to invest in technology during the remainder of 2022, according to Adyen. If this accelerated technology adoption is carried out correctly, the retail sector could add 4.7 percent to its growth rate over the next five years. For this transition to happen and to make the best out of the current opportunities, customers must be kept at the center. “Digital transformation forces companies to transfer the attention from the product to the client, which is where it has to be,” said Kelly Kroger, CEO, C&A México.

Today’s businesses not only have to have a digital platform that makes it easy to get their products; they also have to generate a unique user experience and constantly incorporate customer feedback to stay one step ahead. “Retailers did not enter the market as tech companies, but today, all companies have to be seen as tech-enabling organizations,” said Daniel Navas, Co-Founder and CEO, Mora Mora.

Despite the numerous challenges posed by digitalization, customer experience has to be kept at the center. Retailers must also face the blurring of the physical and digital worlds to map how this new way of living will affect the future of shopping. “Physical stores are not going to die. This over dimensioned fear that arose during the pandemic is not real. I expect a future of unified commerce but changing the concept that physical stores have today,” said Benjamín Santa María, Co-Founder and CEO, Reversso. 

To address customer needs, the lines between the online and offline world must disappear to offer a complete experience. Technology should also be seen as the catalyst that drives people to physical stores. “We can use physical stores as a communication and educational tool,” said Kroger. 

However, there are some challenges ahead such as tackling security issues so customers can enjoy the shopping experience without worrying about their money’s safety. Physical and online stores belonging to the same brand are also increasingly finding themselves competing against each other, to the detriment of sales and clients. “Organizations do not have to boost a competition between physical and digital stores because the client is the one who is affected by this. Companies have to implement a structure to homologate the customer’s experience,” said Montes.

Aside from increasing conversion rates and improving the customer’s experience, a strategy that addresses both physical and digital stores can become a window of opportunity to create an evolving brand image that engages Gen Z and allows retail to reach unforeseen levels. “Younger generations choose to enter a physical store from their homes after seeing the brand on their phones,” added Kroger.

For companies to succeed in this process, they have to pay attention to their catalogs to ensure that the client receives the price and quality they are expecting. Companies should also understand how to control the customer’s experience from the moment that users know of the brand to the moment the product arrives at their house. Finally, organizations have to learn to understand what the user is looking for to start customizing the shopping experience. “These strategies have to be implemented by retailers; however, the challenge now is to use the technology correctly to predict the future behavior of users,” said Alejandro Sisniega, Co-Founder and Chief of New Business, Justo. “Stores that do not have the technology implemented yet; they continue to only see transactions without linking the behaviors of their clients. Consequently, they do not know their users,” he added.

“When we get to know our consumers and their relationship with our brands, we will be able to improve the experience we offer to benefit companies,” said Santa María.