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Redefining Retail: Technology and Strategies for a New Era

By Anabell Trejo - Getin
Ceo & Co-Founder

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Anabell Trejo By Anabell Trejo | CEO and Co-Founder - Thu, 04/27/2023 - 10:00

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As we entered 2023, the retail sector in Mexico experienced a surprising resurgence. Brick-and-mortar stores saw 29% growth in sales in January compared to the previous year, a trend that persisted through the first quarter. This phenomenon sparked questions about the underlying reasons for these changes in consumer behavior and how retail businesses can adapt.

One notable factor is that during the first months of 2023, indicators like average ticket value and the average number of items purchased per ticket remained unchanged from 2022. So, if these indicators haven't changed, how did sales revenue increase? The answer lies in the marketing department and the promotions deployed during these months. Discounts and special offers have been the primary drivers of sales growth, despite the stability in average ticket value and item count per ticket.

The buyer's profile has evolved dramatically over the past five years. Before the pandemic, consumers visited shopping malls for experiences, making it difficult to convert visits into purchases. As lockdowns ended, the need to resume in-store shopping experiences increased purchase intent. However, as 2022 progressed, consumers began visiting stores for recreational purposes again, decreasing the conversion rate.

The old belief that a mall's high foot traffic alone would guarantee sales for a store is no longer valid. The retail landscape has shifted, and brands must adapt and innovate in response to changes in consumer behavior. Retailers can no longer rely solely on their location within a high-traffic shopping center to drive sales. Instead, they must recognize and address the evolving habits and preferences of consumers who now visit commercial spaces more frequently but with different motivations.

The end of lockdowns led to a surge in purchase intent as consumers sought to revive their physical shopping experiences. This trend continued throughout 2022, with people entering stores more likely to make a purchase and significantly increasing conversion rates.

In 2023, lower purchase intent compared to 2022, brick-and-mortar stores have seen an increase in sales and visits, thanks to effective marketing strategies and promotions. These actions have successfully motivated consumers to buy, even though constant discounts impact profit margins.

To address this challenge, brands must adapt to new consumption habits and strike a balance between promotions and profitability. One option is offering attractive promotions like "buy 2, get 3" deals that don't aggressively reduce profits per product.

Technology plays a crucial role in providing insights to retail business owners. Comprehensive store monitoring, including sales indicators and foot traffic behavior analysis, is essential for understanding and adapting to changes in consumer behavior.

Getin, a company focused on leveraging technology to provide insights to retail business owners, offers a valuable tool for addressing these challenges and improving sales. The data obtained through Getin allows brands to analyze their stores' context and the market, making decisions based on concrete information.

As 2023 unfolds, brick-and-mortar stores will continue to evolve, provided retailers consistently monitor their performance and adapt to new trends and consumption habits. To maintain profitability and meet consumer expectations, brands must prioritize innovation and personalization in their offerings and services.

Moreover, brands must focus not only on promotions and discounts but also on the quality and innovation of their products and services. Investment in research and development can provide a competitive advantage in a market saturated with similar offers.

Collaboration between brands and shopping centers is another critical aspect. Strategic alliances and the creation of shared events and experiences can attract a broader audience and foster a sense of community around physical stores, positively impacting sales and consumers' perceptions of brands and shopping centers.

Furthermore, embracing digital channels and omnichannel strategies will be essential for retailers. By integrating online and offline shopping experiences, brands can cater to a wider range of customer preferences and deliver seamless, personalized experiences that drive customer loyalty and satisfaction.

In addition, data-driven decision-making will play a significant role in retail success. Retailers must invest in advanced analytics and artificial intelligence to derive actionable insights from customer data, enabling them to tailor their offerings and optimize their operations. This will help brands stay ahead of the competition and respond to market trends proactively.

Customer experience should also be a top priority for retailers. In the post-pandemic era, consumers are more discerning and have higher expectations for their shopping experiences. Retailers must focus on providing exceptional customer service, personalized interactions, and unique in-store experiences to differentiate themselves and retain customers.

Finally, sustainability and corporate social responsibility are increasingly relevant in the retail world. Consumers are more concerned about the environmental and social impact of their purchases, and brands that effectively address these concerns can position themselves as industry leaders.

In conclusion, the rebirth of retail in 2023 demands constant adaptation and the incorporation of innovative technologies to understand and meet ever-changing consumer needs. Collaboration between brands, shopping centers, and technology providers, like Getin, will be crucial to face market challenges and ensure future success. Companies that can leverage these changes and utilize technology and insights to guide their strategies will be the ones that triumph in this new retail landscape.

Photo by:   Anabell Trejo

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