Although retail has always been a fast-paced, fiercely competitive industry, things seem to have been moving at a breakneck rate these days, and the stakes for competition are rising as a result of quicker, better, and stronger innovations.
If you want your retail firm to succeed in 2025, you need to be aware of these three trends:
Artificial intelligence comes in first.
Indeed, there is a clear reason why it has become the most popular keyword. Its uses are practically limitless in the retail industry, and it can have a big effect on profitability. The era of universally applicable suggestions is over, and AI has made the customer experience more personalized, relevant, and intuitive.
AI analyzes vast amounts of data to get to know each customer’s preferences and individualized needs by analyzing shopping history, demographic information, social media engagement, browsing habits, and more, explains Karen Keylock, National Retail Services Manager at Nedbank Commercial Banking.
Keylock went on to say: “Then, instead of bombarding shoppers with random product suggestions, AI enables brands to recommend items that make sense based on previous interests, making customers feel understood – and more likely to buy again.”
The pressure is on, as 73% of consumers anticipate retail offers to be personalized, according to the 2022 Salesforce State of the Connected Customer Report. However, the benefits outweigh the implementation costs: Swiftly claims that personalization increases sales for retail companies by 40%.
Guy Le Ray Cook, Kauai’s Business Development Director, discussed how the company has made large investments in its digital platforms to give consumers a better brand experience at a recent franchising mentorship event organized by Nedbank and Franchise Coaches.
He went on to say: “By offering incentives ranging from instant gratification via cash back rewards to gamification and longer-term tier points, hyper-personalization and the use of data to benefit and drive customer engagement has significantly boosted customer loyalty in our stores and driven higher engagement and lifetime value.”
The audience, which consisted of franchisers and franchisees from a variety of retail industries, shared similar stories, demonstrating how AI is being used extensively in South African retail to curate and personalize pertinent consumer experiences.
Le Ray Cook and attendees at the event concurred that data-driven insights had also been very helpful in determining the ideal sites for new stores and increasing profitability through in-depth analysis of production variations and demand projections.
A 2022 McKinsey study available to BrandSpur digital news platform claims that AI demand forecasting can cut supply chain failures by 20 to 50% and lost sales by as much as 65%.
The Next is Retail Omnichannel
Retail Omnichannel, a strategy that provides a similar shopping experience across all channels, whether a customer is purchasing online, in-store, or through an app, is made to make it simple and hassle-free for customers to transfer between channels. According to Salesforce, 71% of consumers prefer omnichannel experiences; therefore, if you want your company to stay relevant, omnichannel is practically a must. However, there are significant benefits:
Additionally, according to Salesforce, 89% of customers are retained by businesses that use omnichannel customer engagement tactics, and 83% of consumers are more devoted to these businesses.
Furthering, Keylock said: “Although in-person shopping appears to be back in vogue, mobile devices are now the dominant force in online shopping, accounting for 34% of shopping in South Africa, while Nedbank’s transactional data for Black Friday 2024 showed a 14% increase in the number of customers transacting online. At the same time, social commerce continues to gain global traction.”
According to VML’s 2024 Future Shopper Report, 78% of South Africans have made purchases using social media. Social commerce should be at the top of consumer brands’ agendas for two reasons: its unparalleled reach and the speed of transactions.
Omnichannel and AI-supporting systems come as the next.
Can your systems handle the omnichannel experiences and artificial intelligence that you’re investing in? If you don’t modernize, it could be hard to fully utilize new technologies, even if your current systems are operating as intended.
Keylock had this to say: “Point-of-sale systems, for example, are one of the most valuable tools for generating the wealth of data that AI needs to analyse the buying habits of customers, personalise customer experiences and better forecast demand and manage inventory.
“However, it can only function in this way and provide seamless omnichannel experiences if the systems are interconnected. This is important not just for tracking inventory and forecasting but also for customer trust. If you provide stock and pricing information for products online, accurate and real-time data contributes toward customer confidence in your brand. This data can also be used to upsell, suggest promotions, and encourage customers to buy other items that they are likely to want based on their unique profile,” he added.
According to Le Ray Cook, app modernization is about more than just staying current; it’s also about boosting security, expanding flexibility, and boosting business performance.
“We were possibly a little ahead of the curve when we introduced our app as the technology wasn’t quite up to speed with what we wanted to achieve when we developed it. We had to go back to the drawing board to develop and enhance the performance we needed but it was worth it. We now have 340,000 Kauai app users and it’s one of our most powerful tools, allowing us to truly understand our customers and engage with them in a meaningful, authentic way,” he added.
