Global retail sales are projected to hit $30 trillion by 2024, representing huge growth opportunities for brands and retailers alike. Despite this huge growth opportunity, unprecedented industry disruptions have made winning in retail harder, forcing retail leaders across the US and the globe to find new paths to address this supply chain volatility.
These conversations were front and center at the just concluded NRF ‘24 (National Retail Foundation) Retail’s Big Show, one of the largest conferences in retail. At the event, RedCloud’s COO, Soumaya Hamzaoui, and SVP of Product, Juandre de Jong, joined retail leaders from some of the largest companies in the world to delve into the latest industry trends.
In this article, Juandre summarizes the key takeaways from the event on the future of retail and shares his insights on how businesses can leverage new technologies like GenAI and Open Commerce to unlock consistent growth and win over the next few decades.
The Global Supply Chain is Broken
It’s no longer a secret that the global supply chain is broken. Shifting consumer preferences, abrupt spikes, and reduction in demand, coupled with geopolitical tensions, have made global supply chains more fragile and volatile than ever. Recent reports show that the retail sector has experienced more disruption in the last five years than in the last 25 years, and according to McKinsey, these disruptions will erase half a year’s worth of profits or more for many companies.
While NRF’s conferences are typically US-focused, the conversations held at this year’s edition had a more global flavor, as global interdependencies have increased the complexity of supply chains and made them more susceptible to disruption from local and regional events. For example, a number of talks at the conference centered on the impact D2C players such as Shein and Temu will have on the US retail market and on-demand manufacturing in general.
This makes our work at RedCloud with Open Commerce even more important. Open Commerce technology provides visibility across the end-to-end consumer goods value chain, allowing players in the retail industry across emerging markets and beyond to better understand the trends reshaping their supply chains.
Making Data Useful at Scale is Key for Growth
The number one topic talked about at the conference was data. Data is king, and retail leaders at all levels want to know how they can access relevant data, but more importantly, how that data can be used to provide useful insights. At first glance, the retail sector seems poised to benefit maximally from advanced data analytics – it boasts of a high purchase frequency and rich customer data generated via the shift to unified commerce, as every sale becomes a new datapoint. However, much of the data collected is irrelevant and leaves retailers drowning in noise, unable to transform the data generated into actionable insights that can generate significant impact.
Retailers and CPG players also need to better understand their consumers, how they behave, and how that behavior might change over time. However, despite having access to data on what consumers buy and when, many retailers remain unable to critically analyze the data to uncover insights into what consumers are really thinking and recognize patterns of changing product variations or SKUs within a product or category.
For retail companies to make data-driven decisions and build personalized consumer experiences, they must adopt analytics tools that augment first-party data with available market data from multiple sources into a single source of truth that provides full end-to-end visibility across the supply chain. We built this into RedInsights®, RedCloud’s AI-powered predictive analytics solution that provides a high-fidelity view of the market in real time. With RedInsights®, sellers can see the demand for their products in real-time, alongside other market trends. When coupled with our AI-powered insights that provide tailored recommendations, retail can lead the market, anticipating and reacting in time to maximize changing consumption patterns to unlock new levels of growth.
AI-Powered Commerce is the Next Big Thing in Retail
With artificial intelligence exploding into popularity over the last year, its transformative impact on retail was a central topic at the conference, with many retail leaders agreeing that harnessing the disruptive power of AI could determine if they spend the next two decades as leaders or laggards. To survive and thrive in the next 10 to 25 years, retailer and consumer companies must evolve into technology-led companies.
The retail industry is rapidly moving from traditional e-commerce to more interactive AI-driven experiences and evolving into a new type of commerce – conversational and concierge commerce, where retailers are leveraging new AI tools to understand their customers in more detail, anticipate their needs, and deliver a more personalized and interactive shopping experience.
However, as the retail industry continues to embrace AI-powered commerce, retail leaders must answer a significant question: how can they effectively integrate and maximize AI in their operations? There is no one-size-fits-all playbook for success with AI, which makes it critical for retailers to adopt AI tools in specific use cases that align with their unique business needs.
GenAI Can Help Unlock Omnichannel Commerce
According to NRF, over 200 million consumers shopped over the five-day holiday weekend from Thanksgiving to Cyber Monday, spending over $222 billion across the holiday season. These consumers increasingly shop across different channels, showing little loyalty while expecting hyper-personalized shopping experiences. We are entering a new world of “phygital,” where retail is neither purely physical nor digital, but both at the same time and adapting to this world means retailers must get better at creating unique, personalized customer experiences at scale.
Generative AI (GenAI) has emerged as a game-changer that allows retailers to anticipate consumer needs and drive hyper-personalized consumer experiences across multiple channels. The technology is transformational for any industry, especially for retail, because, according to researchers from Gartner, “it enables a probabilistic capability to identify the next word or phrase that is more likely to accurately represent customer intent.” This means that GenAI can better understand individual customer behaviors, preferences, and shopping patterns, allowing retailers to craft seamless omnichannel customer experiences that go beyond the transactional.
For example, Google Shopping’s new “Try-On” feature helps customers visualize how clothing items look on them before purchase by using a GenAI-generated digital model that resembles the consumer’s body type and skin tone. This boosts conversion rates and drastically reduces returns, which can sometimes rise as high as half of all orders. One retail giant is even already using GenAI to renegotiate contracts with smaller suppliers to unlock pricing excellence at scale!
The retail market needs a new type of digital commerce, a solution that leverages the disruptive power of AI to provide brands, retailers, distributors, and other stakeholders with data from across the market and the global supply chain, which can be leveraged to drive informed strategies and build personalized customer experiences. This is what we are building at RedCloud – the world’s first AI-powered Intelligent Open Commerce Platform™, where all brands, retailers, and other players in the retail industry can connect and trade directly while accessing the granular data needed to drive growth.
To learn more about RedCloud’s AI-powered Open Commerce Platform™ and how it has unlocked growth for thousands of retailers and brands across the US and emerging markets, book a demo here.