HARNESSING THE POWER OF TECHNOLOGY: WHAT’S NEXT FOR DIGITAL RETAIL FASHION
In the fast-paced digital retail world, facing challenges via a post-pandemic, pre-war, mid-inflation, and overall economic global upheaval is now, much less about just landing on our feet and more about making smarter short- and long-term decisions. E-commerce continues to be a powerful factor in retail development.
In 2018, Gartner predicted that by 2023, the majority of businesses that have adopted AI for digital commerce will have seen an increase of 25% or more in customer satisfaction, revenue, and cost efficiency. This and other predictions have become realized as the industry continues to adapt accordingly via technological advances.
As the online channel reaches a more advanced state, particularly in regions where certain categories are already saturated, it is essential for brands and retailers to take advantage of technological developments. These up-and-coming musts that are almost past the trend phase can help businesses steer their customer and data and ride the tech-driven wave.
Here are three ways technology will change digital retail in 2023
1. AI and automation will play a big role.
In 2018, the idea that “you can’t spell retail with AI”, is now most relevant in 2023. Digital retail and the fast demands are now becoming increasingly automated, the real goal being to optimize the shopping experience for customers, making it faster, easier, and more efficient. With AI, retailers in particular will be able to track customer behavior and preferences in order to provide them with a more personalized shopping experience.
Brands can enhance their marketing strategies by leveraging personalized data and insights to create a more devoted customer base.
Technology has already started to revolutionize the way businesses interact with customers. AI-based tools such as virtual assistants, chatbots, and automated customer service systems are becoming increasingly popular. By using AI to respond to customer queries, businesses can save time and money, while also providing a better customer experience. Furthermore, AI can analyze customer data to make personalized recommendations, customize customer journeys, and detect potentially fraudulent activities.
Automation is also becoming increasingly popular in the digital retail landscape. Automation allows businesses to streamline their operations and reduce the need for manual labor. For example, it can be used to automate the process of order fulfillment, customer service, and inventory management. While increasing customer satisfaction. In a November 2022 industry survey from Euromonitor, 45% of professionals said delivering a positive digital consumer experience was critical to success.
In addition, automation is helping to reduce costs, as many manual processes are being automated. This saves time and money while also improving customer experience.
2. Sustainable Practices become a priority
With the increasing awareness of the importance of sustainability and the potent methods of ai and automation, it is no surprise that this is becoming a top priority for digital retailers. In the next few months, we will see even more retailers implementing sustainable practices, such as using recycled materials, reducing packaging, and using energy-efficient technologies. Companies are now working to reduce their carbon footprint and improve their environmental impact by 2026, a seemingly steep learning curve to adapting to more than half the world’s online consumers’ commitment to eradicating climate change.
And essentially, maintaining a successful business involves finding harmony between shareholders’ anticipations and the worries and requirements of associates, customers, providers, and those in the supply chain, and the natural environment. Ai is paving the way for data insights on the impact of eco-friendly methods in an industry where Co2 emissions, logistics output, and generated wastes are part of fashion production and supply chains.
According to invespcro, more than 60% of consumers return items more than once and return items multiple times, at no cost to them, (unlike the retailer) raising operating costs at 10-20 units in any currency per exchange/ return but more importantly, detrimental to the planet.
Businesses are looking into their supply chains are now becoming more motivated to use renewable energy sources such as solar and wind power to run websites and other digital infrastructure, and consciously use sustainable packaging materials and shipping methods to reduce their environmental impact, the question remains:
Why are companies not becoming more sustainable?
We can argue that brands and retailers can make more responsible choices (long term) in production, supply chain management, and product compliance standards by aiming to make them in the first place. We now have the capacity and automation software offer the capability to attain and organize such data let alone to level up our business efforts to drive more sales and retain more customers, and if they choose, disclose the breakdown of materials used in their production lines as well as the policy in place to disclose it to their target audiences.
Adidas has excelled in its efforts for a cleaner planet with 96% of all polyester used in 2022 being recycled and in 2022, making a small apparel collection with at least 60% fibers from recycled cotton waste and 40% organic cotton as part of their partnering with Infinited Fiber Company and the EU-funded New Cotton project.
Companies are implementing professionalization and data processing via machine learning to implement proper allocation to drive sales as the focus but they can succeed even more by upholding policies not only to satisfy and create a stronger loyalty base in an authenticity-driven shopping metaverse, but also, reinvest those efforts into driving eco-friendly and sustainable retail.
3. Technology will catapult DTC and Omnichannel models
The amalgamation of Direct-to-Consumer (DTC) and Omnichannel provides brands and retailers with the opportunity to fashion a unified, integrated customer experience. As customers’ demands for convenience and efficiency continue to surge, companies will have to offer an Omnichannel experience if they aspire to remain competitive in 2023.
For brands and retailers, the secret to success with DTC and Omnichannel will be data. Companies must aggregate and evaluate data from multiple channels in order to provide an individualized, customized customer experience. This will include utilizing customer feedback, sales data, and other insights to construct more accurate marketing campaigns and product offerings.
Currently, campaigns are driven not only by attempting innovative ideas but also by responding (automatically) to AI, and automated consumer behavior using AI is allowing retailers to develop predictive models via recognition, detection, and modeling and convert them to machine-readable formats.
With even more AI and automation becoming the standard, brands and retailers can more easily create an omnichannel approach to retailing, construct a direct-to-consumer model, and automate certain processes. This helps to create a more personalized shopping experience and streamline operations, ultimately leading to increased sales and profitability.
For Omnichannel, it’s a perfect union because by leveraging the machine learning power of AI, pricing is now managed across various channels, implementing a customer’s purchase history and price sensitivity. IT infrastructure can be reconfigured and integrated to better serve the needs of an Omnichannel retailer, as well, by digitizing supply chains, ensuring better on-time performance, and accelerating revenue growth.
DTC’s most overlooked use case is having a single source of truth, a central hub in which all the generated data and insights are collected and streamlined across several systems.
Since 2009, Tradebyte has emerged as the leader in the revolution of DTC and Marketplace SaaS. As a reliable integrator for fashion & lifestyle marketplaces in Europe, they have worked with over 1,000 brands, retailers, and manufacturers, such as About You, Asics, Guess, Karl Lagerfeld, and Puma, to name a few.
More shoppers, increasingly turn to multiple channels such as web, mobile, and social media to purchase items, expecting retailers to always be accessible and ready to assist them.
According to Forbes, up to 75% of DTC brands are predicted to have a subscription-based offering by the end of 2023. To reach their revenue targets and distinguish themselves from the competition, brands must focus on personalizing the customer experience, using AI and machine learning technology. This will enable them to provide each visitor with a more tailored, personalized experience.
To meet this expectation, many retailers are implementing unified commerce, specifically in that they are now constructing a 360-degree retail network to more effectively attain faster and more targeted data via a single and completely integrated software platform. This approach eliminates the necessity to match up data from different systems, thus conserving time and resources. Furthermore, data silos are broken down, ensuring the data from separate sources is kept secure and intact within the unified commerce system.
Technology is helping businesses transform data into digital customer experiences that emulate physical store shopping.
We can argue that Gen-Z’s online shopping style is becoming more and more immersive, with visuals and sound that engage customers. We may credit live shopping and virtual dressing rooms for that. These and other entities are pushing the boundaries of the web experience, utilizing tech to involve all the senses, including touch, smell, and even taste.
The future of digital retail in 2023 will be even more challenging but nonetheless paves the way to take advantage of advancements in AI, automation, and sustainability. The choice lies in businesses themselves, to really rise to the occasion and optimize their e-commerce operations in order to provide customers with a better experience and use data-driven tools to reduce the impact on the environment.
By David Juarez-Schmidt