Retail & e-commerce: four key shifts that will affect your business in 2024
From sector convergence and geopolitics to behaviour shifts and technology acceleration, these are the disruptive shifts retail brands need to plan for
Any retail and e-commerce business that is looking to plan for 2024 and beyond is currently on the hunt for trends, ideas, opportunities and challenges. You want to know where to focus your energies, where you need to futureproof your business, where to invest, where to seek an advantage over the competition, and how to keep up with customer expectations. No business of any size should take its eye off the ball in these respects.
In order to understand the future trends, you need to first understand the shifts and disruptive forces that will shape the retail and e-commerce landscape. Only when you can imagine the landscape can you work out how to navigate it successfully.
Konecta’s retail and e-commerce experts and specialists have therefore identified four key disruptive forces or shifts that will affect the landscape in customer management, and how brands can approach them.
1: Technology shifts
You probably won’t be surprised at this one! Technological change has been on the agenda for a few years now, but in 2023 and 2024, this change is both accelerating and becoming more wide-ranging than ever. Changes that businesses have to understand include:
- digital channels evolution
- development of digital goods and services
- how to embed digital, AI and analytics throughout your business to drive excellence in customer care and management
- how to ensure operational excellence through new and more powerful infrastructure: for example in a recent report on The Future of Retail (2023), EY highlighted the use of 5G, Internet of Things (IoT) and cloud / edge computing as being among the technology infrastructure creating landscape change.
These changes are daunting, especially because customer management is simultaneously a technology business and a people businesses. The growth of digital channels and the appearance of AI in customer care processes will continue to displace traditional channels and reduce human interactions in many markets – for example, in Europe. However, it’s still essential for brands to gauge where consumers still want human interaction or where the ‘human touch’ will support long-term value creation.
Konecta can provide powerful support in this landscape of technology change, offering a number of technology solutions, such as:
- speech analytics, enabling brands to obtain value insights to know customers better
- generative AI (GenAI) to improve and optimize customer care services
- data visualization with business intelligence technologies to know and to control quickly visuality, granularity and the evolution of services
At the same time, our mix and understanding of people, technology and processes means we understand where human interactions can still create value, so that consumers and end-customers do not feel ‘left behind’ by technology shifts.
2: Retail & e-commerce sector convergence
If you told a 20th-century consumer about how they’d be buying and consuming from brands in the 21st century, they would think you were living in a science-fiction movie or had just gone crazy! Sector convergence is gathering pace, through disruptive forces like the shift from product to service, the shift towards retail-tainment, and the gamification or monetization of data.
Successful brands are seeking to take over the complete customer experiences, and to do this, many are completing their offer with initiatives aligned with their values and with their customers’ way of life. For example, the flagship store of the skatewear brand Vans completes the customer experience with an art gallery, restaurant, cinema and a skatepark which offers skateboarding lessons. Vans has also built skateparks in the Metaverse, illustrating how this experiences can be provided – and may need to be provided – remotely too.
Another example of convergence is the way that some large distribution companies, such as furniture and DIY retailers, are increasingly building service offerings that complement the products they sell, including home design solutions, and assembly & maintenance experts to enable an end-to-end service for customers looking to improve their homes.
It’s exciting territory, but also daunting and highly-competitive territory. The good news is that support is available. For example, Konecta can help brands by providing remote services by specialized advisors who can help, advise or teach customers on their requests. Likewise, these advisors can provide valuable information to customers, such as explaining new features, tricks or methods of preparation.
3: Geopolitics and economics
The retail & e-commerce sector is always vulnerable to geopolitical and economic uncertainties and changes, as the last few months and years have proved. So, the possibility of geopolitical and economic shocks and shifts must continue to be high on brands’ agendas in 2024, as EY’s Future of Retail report also makes clear. For retail and e-commerce brands, the report says the consequences of uncertainty can include:
- a need to diversify and reinforce supply chains, and to build local supplier networks
- fragmentation of their operations and the severing of partnerships
- a requirement to manage cost hikes and product shortages
Economic and geopolitical uncertainties, which could be localized or global, also create a need for agility and resilience planning. The ability of providers like Konecta to provide services and bestshoring options to global clients from multiple geographical locations, can help brands to manage economic uncertainties as well as reduce risks and optimize costs. Konecta’s network of 10 multilingual hubs in Barcelona (Spain), Bucharest (Romania), Casablanca (Morocco), Istanbul (Turkey), Lisbon (Portugal), London (UK), Medellín (Colombia), Mexico (Mexico), Paris (France) and Prague (Czech Republic) offers powerful support for brands trying to navigate the consequences (or potential consequences) of economic and geopolitical disruption on their customer management provision.
Further resilience is offered by Konecta Cloud, which enables us to operate from remote locations, with multilingual services provided at home by agents anywhere, helping to protect against recruitment difficulties or unexpected events or issues.
4: Demographic and behavior shifts
Technology shifts are also being accompanied by shifts in consumption, caused by anything from demographic changes to changes in behavior and expectations. EY, in The Future of Retail, pointed to trends like conscious consumption and healthy-plant-based consumption; at Konecta, we would also highlight:
- the emergence of companies dedicated to second-hand or vintage purchasing, a good example being Vestiaire Collective, a Konecta client in France, as well as the growth of the Vinted online platform for ‘pre-loved’ clothing. Some brands also see the launch of pre-owned apparel as an effective method for reducing their carbon footprint as well as adapting to the evolution in consumer behavior and values.
- the move away from traditional ownership models, good examples being the rise of clothing rental agencies
- customers’ desire for ‘here and now’ purchasing, leading to the emergence and growth of delivery companies such as Deliveroo, Uber and Glovo
- Since customer loyalty has dramatically decreased during the last years amongst the younger generations, the quality of customer experience is playing a central role in brands’ strategies for differentiation, along with personalization, and the use of analytics and automation.
Many of these trends and shifts are global, but each market customizes them to the idiosyncrasies or specificities of its own target audiences. The level of social and economic development of each market is key in this, and also in the deployment of retail & e-commerce initiatives to create value. For example, in Europe, there are many initiatives being developed and deployed in order to build customer loyalty based on good / excellent purchasing experiences, while in the Americas, there’s a stronger tilt towards providing upselling and cross-selling experiences.
To support on these trends, Konecta can offer solutions that facilitate brands’ relationship with the new consumers through its expertise and presence in the conversational channels where consumers hang out and express themselves. Our analytical models allow brands to gather valuable insights into their end-customers – a good example of these models being the SAE (Speech Analytics Experience) solution, which has been developed to analyse what customers say on voice channels.
Naturally, these significant shifts will create challenges for brands, but also new engagement opportunities between retailers and their customers. According to EY, in the Future of Retail, the traditional retail principles of price, product and place still remain in place, but ‘with changes’. For example, price is now only part of the value exchange between retailers and their customers, and in terms of place, the customer is now the destination of the retailer, and not the reverse, as in the past.
In our experience at Konecta, these shifts and changes create two major opportunities for retail businesses, which we can support them to achieve:
New business and business growth: achieving greater connection with customers, or more sales, by generating valuable insights through analytical techniques, such as speech analytical tools or monetizing the data obtained
Optimization of operations: through the use of digital channels, AI or services in the cloud to reduce the cost and increase the efficiency of their operations
Ultimately, it is critical for the retail sector to always have the consumer on its radar. The four key shifts in this article will affect, or be adopted by, consumers and end-consumers across the world – perhaps at different times or speeds and in slightly different ways. Brands must be prepared for that moment and for those variations, and will need partners who understand and anticipate the global as well as the local. Konecta is here to help.