Insights from the 2024 Retail Technology Show
Last month the Retail Technology Show 2024 took place in Olympia, London. Some of the biggest names in retail attended and shared their insights on future trends and new forms of commerce, AI adoption and how to achieve sustainability in the industry. These insights underscore the need for retailers to innovate, adapt, and prioritise sustainability for future success.
Reason for “cautious optimism” over the next year
Richard Lim, CEO at Retail Economics, reasoned for cautious optimism over the next year in the UK retail industry. Some key takeaways:
The second-hand market has seen explosive growth in recent years due to the cost of living crisis and now the recommerce market, worth £7 billion, is predicted to double in size over the next 5 years.
There is a gulf between the retailers that invest in digital transformations and those who do not. Lim pointed to the investments made by M&S and Boots in recent years in new technology operating models and data transformations to become more agile, customer-centric, and technologically advanced.
Emotional Commerce
Holly Tucker, UK ambassador to Creative Small Businesses and Founder of Holly&Co and Notonthehighstreet, highlighted the importance of emotion as a driving force in a consumer’s decision-making process.
Small businesses have the distinct advantage of being able to tap into emotional commerce, whereby customers have an emotional connection to a brand. In a highly transactional world, Holly pointed out that small businesses should leverage their uniqueness to stand out and build an affinity for their brands. Further, relating to her own experiences of running businesses, Holly recalled that her failures had occurred when she didn’t trust her gut. Consumers want to trust their gut and if retailers can connect emotionally with a consumer, they can build a rapport that the larger retailers cannot strike as easily.
Social Commerce
Maddie Forman, Fashion Key Accounts Lead at TikTok Shop, spoke on the growing social commerce market that has risen out of content creation through platforms like TikTok. TikTok is now both a media platform for content creators and a storefront for clothing. And with low barriers to entry, content creators have been able to take advantage of social commerce to sell on media platforms.
Anyone who watches content on TikTok is a potential customer and should they want to purchase an item they have seen in a video, the customer journey from discovery to purchase is short which increases conversion rates. The rapid growth in social commerce demonstrates its value as a growing sales channel that increases accessibility to the retail industry for individuals.
AI adoption for competitive advantage
Retailers shared how AI is used across value chains to increase competitive advantage. With the applicability of AI, reaching from back office to customer facing technology, the overall benefits are not only linked to cost cutting but to time savings and improving the customer experience.
Morrisons have been using AI to reduce the administrative burden on staff by implementing camera technology in stores that monitor stock on shelves. AI notifies staff of when the shelves need restocking which removes the process of manually monitoring shelves, giving time back to staff. This provides the means for staff to spend more time with customers, improving the customer experience.
At B&Q, AI is being used to aid in kitchen design. Staff can use AI powered design tools to help bring a customer’s vision to life. The implementation of AI in this case improves the quality of B&Q’s offering and increases the customer’s confidence along the journey in getting the design they envisioned. Since adopting this technology B&Q has seen higher conversion rates in kitchen sales.
Sustainability
The power of collaboration in sustainability
Simon Finch, Supply Chain Director at Harrods, shared how collaboration is important within the retail industry to achieve sustainable goals. Harrods wanted to improve their upstream delivery of goods to the store by replacing diesel fuelled trucks with HVO (Hydrotreated Vegetable Oil) fuel. Whilst HVO fuel produces 99% less emissions than diesel, the fuel is 10% more expensive. To make the switch more affordable Harrods collaborated with other retailers, including luxury stores, to purchase HVO as a 10-member consortium.
Through pooling their usage, Harrods went from a single purchase of 250,000 litres up to 2 million litres as a group. All members of the consortium paid less than they would have on their own, making the transition to sustainable fuel feasible to all. This demonstrates the unique power of collaboration amongst competitors within sustainability.
5 Pillars of a sustainable organisation
At Too Good To Go, Sophie Trueman (Managing Director UK & Ireland) shared the pillars of the business that set the foundations of enabling sustainable business:
Stay true to your values
Embrace new technology and innovation
Foster and maintain a strong culture
Engage with the community
Measure your impact
From the significance of emotional commerce empowering small businesses to the transformative potential of AI and the necessity of collaboration in sustainability, retailers are navigating a landscape where innovation and adaptation are key. These trends underscore the importance of embracing change, leveraging technology, and fostering sustainability to meet evolving consumer needs and drive future success in the retail sector.
To discover more about Enfuse Group's expertise in the retail sector, please get in touch with our specialist, Nina: nina.stanley@enfusegroup.com
