The rise of AI- and tech-enabled retail experiences

Salesforce insights predict that the next 12-plus months will present retailers operating within the industry with boundless opportunities to get closer to their consumers and enhance the experiences that they provide for them // By Sean Tarry

Aswe continue to move deeper into 2024, a renewed sense of optimism and excitement is beginning to bubble up in and around retail circles. Consumer confidence remains on the uptick, however slightly. Inflation is beginning to level off. And most of the kinks within the global supply chain that had been wreaking so much havoc, impacting so many, have begun to dissipate. It all adds up to an environment that provides the industry with massive opportunities to get closer to their customers and grow their businesses. As a result, many across the country are eager to spot and get ahead of the next trend to get a leg up on their competitors. With this in mind, Retail Insider the magazine sits down with Michelle Grant, Director, Strategy and Insights, Retail and Consumer Goods at Salesforce, to discuss the forcing functions that are on the horizon and the ways in which retailers can leverage their potential impact to optimize their businesses and enhance the experiences they offer their customers.

Retail Insider the magazine: Consumer behaviour and attitudes are ever-evolving, requiring brands and merchants to shift and pivot on a relatively consistent basis in order to meet and exceed their needs. In your estimation, what is today’s consumer seeking to receive from their retail shopping experience? And, generally speaking, how do retailers ensure that they provide what the consumer’s looking for?

Michelle Grant: It really depends on the type of brand that the consumer is shopping with and the product that they’re looking to purchase. What they’re seeking from the experience can vary slightly from case to case. However, what’s apparent is that despite these things, all consumers want the fundamentals to be taken care of. The product needs to be high quality and in stock, and the customer service needs to be able to correct a situation if something goes wrong, offering a seamless returns policy. Quick and convenient delivery has now also become table stakes. And beneficial reward programs are increasing in prominence in the consumers’ mind, too. Ensuring that these things are a part of the retailer’s offering will place them in good standing. However, when you start talking about high-intent purchases like clothing and beauty, consumers are looking for a little bit more of an experience from the brand they’re shopping with. And they want those experiences to be unique, surprising and delighting them and bringing some joy back into the shopping journey.

RITM: Salesforce recently released its ‘Retail Predictions’ for 2024, offering a compelling list of forcing functions that pose potential impact on retail operations over the course of the next year. The list indicates that brands may be on the cusp of realizing some amazing opportunities when it comes to the use of technology. What in your estimation are some of the most significant benefits that may result from their use?

MG: One of the main tenets of retailing is to make sure that you’re creating a presence for your brand in the places your consumers are engaging. Technology is obviously an incredible facilitator for this, enabling brands to leverage messaging apps or create and develop their own to communicate with consumers. It’s also allowing them to explore the potential of spatial computing within the retail environment and ways its use might be able to help offer their customers those unique experiences that have been tailored to their format and offering. Technological advancements are really providing brands with an endless array of ways to capitalize on commerce, marketing and customer engagement and service opportunities. However, in order to find success leveraging technology, retailers must be strategic. Technology isn’t a cut-and-paste job. It’s implementation, whatever it is, needs to make sense for the brand and support the crafting of experiences that resonate with their consumers. Underpinning all of these incredible capabilities, though, is what I like to call the new retail imperative: data. None of these things happen in any sort of meaningful way without the data that helps create the personalization. Everyone is becoming used to the power of predictive AI. But data is being leveraged today to take that predictiveness one step further through the use of generative AI, presenting retailers with the chance to really bolster their customer service and the experiences they offer.

RITM: Communicating and getting closer to the customer has always been a priority for retailers operating within the industry. And, with so many channels to choose from today in order to do so, retailers must be strategic in their approach to communication. Where are you seeing the most potential with respect to retailer/consumer engagement in 2024?

MG: Leger data reveals that 77 per cent of Canadian Internet users have the Facebook messenger app, and 39 per cent use WhatsApp. Messaging apps have gone from a very chat-based group where friends essentially hung out online, to a tool that’s now offering far more innovative uses. WhatsApp now, for example, has broadcast channels and stories where celebrities and brands who post content can be followed. They’re really resonating with the younger generations. And, as these apps continue to evolve, the capabilities that they offer in terms of communicating with the end user in a multitude of different ways are exploding. From advertising and marketing opportunities to personalized direct messaging, messaging apps are providing brands with a host of ways by which they can enhance their customer service and elevate the overall experience that they offer. The evolving role of the messaging app hasn’t yet been fully identified in North America. It offers a new and interesting way to communicate with shoppers, and is also far less expensive than text messaging when using rich data.

RITM: Spatial computing within the retail experience has still yet to find its proper place. Do you think it’s finally moving from a pie-in-thesky technology to become a functional, useful tool with which retailers can use to enhance the shopping experience for their customers?

MG: The use of this type of technology really depends on the product category that the retailer’s operating within. For instance, fashion brands, cosmetics brands, and so many others will definitely benefit from the use of spatial computing to help enhance the retail experience. but you have to possess a deep understanding of who your customer is and what they’re looking to get out of the experience that they receive from you. The use of VR headsets within the retail environment is going to require some modifications to consumer behaviour. According to most data, a vast majority of VR headset owners use them for gaming, with only a small amount of people using them to explore other realms. Consumers need to see these devices in use, and understand their tangible benefits within the shopping experience, in order for this technology to start to take off. It offers brands operating within certain categories the opportunity to change that consumer behavior and engage them in this new format, providing a potentially really great way to connect with consumers more deeply, and execute wonderful, exciting brand activations. And, as a result, it heightens levels of personalization, establishing stronger loyalty to the brand, opening up some really exciting opportunities for some within the industry.

RITM: Considering all of the potential impacts on merchant operations that we’ve discussed, what in your estimation will the retail shopping experience look like 12 to 18 months from now?

MG: The key to retail success over the course of the next year or so is going to be the creation of a lot more personalized experiences, from in-store to marketing messages to the website. The industry has talked about personalization for a very long time. But, today, with the meaningful data that retailers have at their disposal, particularly those offering strong loyalty programs, real one-to-one relationships between retailers and their customers can finally, truly be established. Now, more than ever before, if a retailer is able to send a customer the right message, via the right channel, at the right time, offering the right incentive or promotion, they’re more likely to cut through the noise of the consumer’s busy lives, unlocking endless opportunities to enhance personalization and recommendations. As a result, a ton of friction is removed from the shopping experience, elevating the brand in the mind of the consumer and strengthening the relationship between the two.