By Luz Angela Quintero Toro, IBM Consulting Leader in Colombia
In 2023, the retailers They will face challenges on several fronts. Consumers are increasingly segmented by generation, purchasing power, life stage, and ways of thinking and acting, and the impact of inflation and other economic pressures have increased the importance of these values. The industry is also facing rising costs for raw materials and internal operations, continued supply chain disruptions, and perhaps most importantly, intense pressure to become more sustainable.
Consumer attention will be won by offering a personalized and continuous shopping experience; in fulfilling the purposes and values of clients; by increasing the overall effectiveness of the supply chain in matching supply with demand; by implementing sustainability in the business; and business modernization, with technologies like hybrid cloud and artificial intelligence (AI) playing key roles.
Creating a hybrid and personalized experience
The consumer shopping journey has been dramatically transformed in recent years into a new “hybrid mode of purchase” divided into multiple digital, physical, and mobile touchpoints. Similarly, we've seen a resurgence of "micro moments," which describe people shopping when and where they want, often while performing other tasks. What is clear is that customers want them to retailers find them wherever they are on their shopping tour.
Furthermore, because of this increasing segmentation, consumers can no longer be categorized into broad demographic or geographic groups. That means the retailers they must reimagine the customer experience, allowing them to create their own shopping journey based on preferences related to age, values, product categories and more. According to new data from an IBM study commissioned by Morning Consult, people want brands that offer convenience, high-quality service, and a sense of control and security when shopping online. Investing in hybrid cloud technology can help retailers to more easily implement innovations like a cognitive store or more quickly incorporate emerging opportunities like the metaverse to deliver the personalized omnichannel experiences consumers now expect.
In the last three years, hybrid shopping, combining physical and digital, has become the norm for most people. Now there is an opportunity to further expand this experience by incorporating more digital elements into stores, enabling salespeople and contact centers to sell and serve customers, and exploring new digital touchpoints such as social media and/or online. metaverse. Digital enablement of stores and vendors is a good starting point, and the metaverse offers retailers and brands many opportunities beyond new consumer experiences, including product innovation, operations, manufacturing, commerce, training and employee support. To learn more about opportunities in the Enterprise Metaverse, visit recent content on Expert Insights from the IBM Institute for Business Value.
Reducing sourcing risks and costs with supply chain intelligence
The global supply chain leaders in the industry retail they also face major challenges, such as external supply chain shocks, sustainability concerns, inflation, and complex supplier networks that contribute to high risks and operating costs that can undermine consumer confidence. People reacted to this by diversifying the way they consume, for example, considering the distance to travel to buy and the costs related to transportation.
Industry executives interviewed in the last IBM CSCO study they say that issues related to supply chain disruptions, technology infrastructure, sustainability and market changes are their biggest challenges in the coming years. And now, almost three years into the pandemic, more retailers they are rethinking their strategies and exploring how a regionalized supply chain network can help them better meet the needs of their customers.
In this case, AI and automation can drive intelligent workflows, delivering insights of 360° and analysis of the impacts that provide interconnectivity, helping to make more accurate predictions. For example, AI can help predict supply and demand so that retailers can more effectively determine the sourcing and regionalization of their supply chain strategy. The retailers they can also use AI to support their workforce and customer service chatbots to move towards a data-driven future to better serve their customers.
Winning over the value-oriented consumer with sustainable operations
As more consumers align their purchases with their values, retailers and brands that offer greener options stand to gain a larger share of consumer spending. Recent data from a study by the IBM Institute for Business Value illustrates the importance of combining sustainability and value: more than half of consumers said they would pay a higher price for sustainable brands by 2023.
Rapidly scaling innovation with hybrid cloud and an open ecosystem
From next year onwards, the retailers and its partners know that they must improve efficiency and costs by driving innovation in their businesses. Much of our work with clients retail is in this area: scaling transformational innovation in customer experience, operations and supply chain, modernization across the business, and sustainability with technologies like AI, machine learning, virtual/augmented reality, advanced analytics, and cloud hybrid.
A hybrid cloud architecture offers the flexibility that retailers they need to harness data, AI and automation to serve consumers wherever they are, transforming their business models and driving sustainable growth. Ecosystem partners can also play an important role in helping customers modernize applications and move critical workloads to the cloud.
Come visit us at NRF 2023, January 15-17 in New York City at the booth #5139, level 3 of the Javits Center and subscribe to our newsletter for more information on how experts in retail from IBM guide the industry by leading clients' transformation journeys in designing, building and scaling their hybrid cloud-based innovations.
