Traditional Retail Is Back!

According to Forrester’s latest research, the AI hype is over. How can it be? And if it is, how can companies prosper on this new frontier and position themselves for growth in the months ahead? What else is keeping B2B and B2C revenue leaders up at night?

In our latest series, our sales acceleration experts weigh in on this and other pressing sales-shaping trends with deep, diverse insights.

Q: What trends are you seeing that are impacting retailers this year?

Traditional retail is back! In-store shopping has recaptured consumers’ imaginations. This is leading retailers to try to determine the areas of their stores and those products that require high touch, which may require a reallocation of resources. I expect retailers to reinvest resources from day-to-day products (paper products, for example) to areas that drive experiences (like electronics or baby gear). I expect more product exclusivity and event-based interactions (such as album launches). I also believe many retailers will turn to third-party labor (3PL) solutions as they seek to offer more experiential events and displays without having to pull their employees from core store functions (merchandising, BOPIS).

At the same time, we’re going to see the retail industry introduce more automation, especially with respect to commoditized items (such as groceries). Retailers are working to understand AI—learning how it can fit into the culture, flow, and footprint of their stores. While incorporating AI into their strategy can be valuable, retailers shouldn’t do it just because they think they should. Those who are taking the AI plunge should make sure to approach it intentionally and competitively. Before they implement AI to cut costs, they should first analyze how much they need to invest to realize those savings. They may find it’s not worth the investment.

Q: Forrester found that 52% of US online adults actively pursue in-person, tactile experiences. If they aren’t already, how can retailers capitalize on this trend to meet consumers where they are?

Retailers need to evaluate innovations that came out of COVID and adapt them to a post-COVID world. They need to give customers a reason to go into the store—to find the attraction component that will lead them to park the car and come inside. They need to strike a balance between customer preferences and in-store opportunities. They should assign their base employees to focus on blocking and tackling and leverage 3PL experts to bring the experiential events to life.

Q: Forrester also says retailers are facing a perfect storm: higher wages, higher interest rates, waning consumer confidence, technological disruption, and intensifying competition. How can retailers and retail brands not only survive this environment but grow despite it?    

The environment is certainly challenging. Many retailers have increased wages but reduced hours. Fewer employees in stores means shelves are empty, and checkout lines are long, which disincentivizes people from going into the store. There’s a tension there, as shoppers increasingly want in-store experiences, but the customer experience is suffering. Also, wages are not keeping up with price increases, which makes AI’s efficiency and cost-savings promises so attractive. But it’s not all doom and gloom. This moment gives retailers the chance to find the right balance of human and technology solutions to gain efficiencies while delivering new, better experiences for their customers. AI is not a panacea or a simple add-on. AI solves for some economic problems that exist, but brands and retailers that examine and invest in their core differentiators are more likely to win in the long run. A 3PL provider can help bridge the gap between efficiency and personalized customer experiences by bringing deep retail experience, specialized, trained associates, and a sophisticated tech stack to the table.

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