Data-driven consumer engagement tools using digital technology, data analytics, user-generated content, influencer marketing, Augmented Reality, and Virtual Reality are rapidly changing the $27 trillion global retail sector, said experts.
The retail sector is shifting from mass-market to target-market approach for retailers to increase their sales output in a very fragmented and competitive marketplace, experts at a RetailME digital conference told the audience.
“Many retailers operate an omnichannel model, which aims to integrate offline and online channels in a seamless way. In 2019, the global retail market generated sales of nearly $25 trillion, with a forecast to reach close to $27 trillion by 2022,” according to Statista, a global market intelligence provider.
According to recent research, technology-driven hyper-personalisation increases average revenue per user by 166 percent. A survey found that 86 percent of the buyers are willing to pay more for a better customer experience while 54 percent of the customers think companies need to fundamentally transform how they engage.
In the category of online entertainment, Netflix was the leading brand with a score of 89 percent in terms of how the brand met consumer expectations versus the consumer-generated, category-specific ideal.
Retailers are currently investing heavily in futuristic technologies to stay ahead of the competition. Globally retailers’ investment in Artificial Intelligence (AI) is expected to exceed $7.3 billion in 2022, according to Juniper Research, which will deliver 25 to 50 percent cost savings on effective deployment to the tune of $340 billion.
“Technology companies are creating new tools for retailers to increase customer engagement to boost their targeted digital sales output to compensate for the decline in physical sales, especially following the outbreak of the COVID-19 pandemic that changed consumer behaviour worldwide,” said Shruthi Nair, Executive Editor of Images RetailME said at the Redefining Consumer Engagement digital conference held in Dubai recently.
“It is very important to have a discussion on the direct correlation level of customer engagement and business profitability. A study says companies that improve the customer engagement can increase cross-sale revenue by 22 percent, up-sale revenue by 38 percent, and order-size by 5 to 85 percent.”
The virtual roundtable was organised by Images RetailME, a 16-year-old retail intelligence media brand in the Middle East with 45,000+ strong print readership and over 100,000 digital reach across the Mena region inhabited by 411 million people living in 22 countries.
By 2021, the influencer marketing market value was forecast to grow to $13.8 billion. Tik Tok and Instagram are some of the most successful social platforms used by influencer marketers. Other retail trends include the use of AR (Augmented Reality) powered shopping experiences, retail technology, faster delivery, sustainability, and smart speaker shopping, according to Statista.
Despite the digital and e-commerce revolution, loyal customers remain the best advocates, according to some studies.
“Word of mouth marketing drives $6 trillion of annual consumer spending and is estimated to account for 13 percent of consumer sales. Impressions from word-of-mouth result in 5x more sales than a paid media impression. People are even 90 percent more likely to trust and buy from a brand recommended by a friend,” said a report.
Despite the retail market's promising growth globally, the industry was severely impacted by the COVID-19 pandemic. Though it was a thriving moment for e-tailers such as Amazon, it certainly was not the case for many brick-and-mortar companies in non-essential industries. Diverse sectors like shopping centres, high street retail, department stores, and office supplies stores were forced to close their doors for a prolonged period, which had a substantial impact on their sales.
“Every industrial revolution was catalysed by a major technological evolution. Today is no different. With 90 percent of the world’s data having been produced in the last two years and more than 26 billion smart devices in circulation, we are living in an era of unprecedented technological innovation — one that has spurred the Fourth Industrial Revolution,” the latest report by Deloitte, titled 2020 Global Marketing Trends, says.
The global Augmented Reality (AR) and Virtual Reality (VR) market is forecast to reach $18.8 billion in 2020. This would be an increase of over 78 percent overspending in 2019.
AR/VR technology makes use of sensory devices to either virtually modify a user’s environment or completely immerse them in a simulated environment. Virtual reality devices typically consist of specially designed headsets that offer complete visual immersion into a simulated environment, while augmented reality relies on headsets that add virtual elements to a user’s actual environment. In 2020, sales of AR/VR headsets were projected to reach 5.5 million units. – TradeArabia News Service