In the midst of an evolving retail landscape, where consumer expectations are increasingly diverging from the offerings of both in-store and online shopping experiences, the need for innovation and adaptation has never been more critical. This need is highlighted in a comprehensive global study by the IBM Institute for Business Value, which surveyed nearly 20,000 consumers and revealed significant dissatisfaction, with only 9% of respondents satisfied with the in-store shopping experience and a mere 14% content with online shopping.
This study underscores the urgency for retailers to embrace technological advancements, such as AI and voice assistants, to revamp the shopping experience—a sentiment echoed by retail consultant Jan Kniffen, who envisages a pivotal role for voice assistants in enhancing post-pandemic retail environments.
One significant aspect of evolving consumer behavior is the demand for flexible payment options, influenced by economic factors such as inflation. In response to this demand, Gulf-based buy now, pay later (BNPL) firm Tamara announced an additional $100 million raise in August 2022, bringing its total capital raised to $215 million.
This Series B funding round, featuring investments from entities including Sanabil Investments, owned by Saudi Arabia’s sovereign wealth fund PIF, underscores the burgeoning interest in alternative payment solutions. Tamara, founded in 2020 by Saudi entrepreneurs Abdulmajeed Alsukhan, Turki Bin Zarah, and Abdulmohsen Albabtain, has not only expanded its market presence but also formed strategic partnerships with notable retailers such as IKEA and Saudi retailer Jarir, in addition to collaborating with e-commerce platforms Shein and Namshi.
This expansion and partnership strategy highlight the company’s ambition to cater to a growing market demand for financial flexibility in shopping behaviors, a trend that aligns with the consumer preferences outlined in the IBM study.
The IBM report further delves into consumer expectations around technology, noting a significant appetite for AI enhancements in shopping experiences, with 55% of respondents eager for virtual assistants and 59% interested in other AI applications. This technological enthusiasm reflects a broader trend towards digital integration in retail, with consumers seeking more personalised, efficient, and seamless shopping experiences. Moreover, the study identifies a stark gap in satisfaction with current AI assistant offerings, indicating a prime opportunity for retailers to innovate and improve these technologies to better meet consumer demands.
Economic pressures, particularly inflation, have also shaped consumer priorities, with 62% of IBM study respondents citing price as a top reason for brand or store switching. This economic sensitivity is further emphasised by consumers’ growing interest in BNPL services, like those offered by Tamara, as a means to manage spending more effectively amidst financial uncertainties.
In addition to technological and economic considerations, the Retail Week survey of 1,000 UK consumers, produced in association with nShift, offers further insights into how shoppers are reprioritising their spending by category and demographic. This geographical specificity in consumer behavior and economic response indicates that retail strategies must be adaptable and informed by both global trends and local nuances.
Integrating these insights, it becomes clear that the future of retail lies in leveraging technology, like AI and BNPL services, to create more engaging, personalised, and economically flexible shopping experiences. The data from these studies presents a compelling narrative for retailers to act swiftly in adopting innovative solutions to meet the changing demands of consumers, ensuring they remain competitive and relevant in a rapidly transforming market landscape.
(The author is a member of the International Press Association)
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