A survey of UK retailers by Red Ant is highlighting retailers’ biggest challenges and drivers for success in 2023. 68% of retailers claim personalised services is their key driver for retail tech investment in 2023. While personalising the customer experience has overtaken data integration to become brands’ biggest challenge (for 30% of respondents). This year siloed data came a close second with almost a quarter (23%) identifying it as their biggest challenge.
The Retail Tech Investment Survey of senior retail executives, conducted by Red Ant at the Retail Technology Show in London, assessed retailers’ tech investments since 2022. On a positive note, 20% of respondents claim their retail budgets have increased in 2023. Reassuringly, 77% of retail tech budgets stay the same as 2022. While challenges remain like last year, the developing investment in new technologies, such as AI, indicate retailers are under pressure to do much more with the same.
In fact, of the 72% of retailers who claim they have already adopted AI and data analytics, 24% of these have ambitions to increase adoption. Despite the biggest barriers to AI adoption being lack of strategy (for 26% of respondents), and costs (for 23%). The complexities of regulation and compliance were a significant barrier to adoption for 18% of respondents. Among these challenges to embrace AI featured a not-insignificant company culture (9%) and data requirements (8%).
Shift in retail tech priorities
This survey highlights the shift in retail tech priorities towards personalisation and the customer journey/experience. It left omnichannel strategy ranking in fourth place. This raise concerns around whether retailers have done enough in the year since Red Ant’s 2022 survey. That survey suggested less than a quarter (24%) of retailers confirmed that they have ‘a well-established omnichannel strategy that works with collaborative tools and platforms and goes beyond multichannel’.
While retailers’ intention to adopt new tech to engage with customers shows innovation, only 62% admitted to being able to provide a single customer view across all channels. This is considered to be a defining factor of true omnichannel retail and essential for retail success. Retailers are also missing key opportunities of an omnichannel approach. Only 42% empowering store associates to recommend/upsell to customers. 45% allowing customers to keep a shared basket when switching devices, keeping customers engaged to browse and buy anywhere.
Exploring the recent hype around ChatGPT, Red Ant asked retailers their views. 32% of brands say they don’t know enough about the potential of AI models like ChatGPT for supporting store associates. The report suggests this will be a learning curve for 2023. Although 14% said they felt tools like ChatGPT might help store associates do their job. 50% voiced that it can’t replace the human touch. With 44% aiming to increase store associate productivity, exploration of ChatGPT with technology partners can help them to deploy this new technology effectively alongside human expertise.
Sarah Friswell, CEO at Red Ant said, “Personalised services are clearly a major focus for successful customer engagement. The study reveals that retailers are taking on greater responsibilities to exceed customers’ expectations while facing the same budgetary pressures. Much more is going on within retail businesses that influences the success of technology in a retail context. For instance, those citing company culture, compliance and lack of strategy as key barriers to success. It’s easy to get excited about new tech, but taking the right steps to adopt, including first getting data in order as part of an omnichannel set-up, is essential.”
Other survey findings
- Budgets- 20% of retail budgets have increased in 2023 and 77% of 2023 retail tech budgets stay the same as 2022.
- Joint top key drivers for retail tech investment in 2023 are personalised services (68%) and improving the customer journey (68%) and omnichannel retail in third priority (63%). Data management / integration also ranked high (64%) and increasing store associate productivity is a major new driver for 44% of retailers.
- Personalisation pain points -While 94% of retailers claim to be able to send relevant communications to customers about new ranges / events, less than half (42%) can allow store associates to recommend / upsell to customers or allow customers to keep a shared basket when switching devices (45%). Less than a third (33%) can reward their store associates or correctly attribute the sale.
- Core applications for AI and data analytics in current operations include the contact centre/chatbots (for 68%) and for product recommendations and identifying revenue opportunities (54%).
- ChatGPT- 50% say AI models like ChatGPT are no replacement for the human touch, while 32% feel they don’t understand their potential for retail, and 14% say ChatGPT could help store associates in their roles.
Enterprise Times: What this means for business
Brands and retailers must ensure they have omnichannel strategy in place which ensures an integrated experience for customers across touchpoints. Otherwise, they risk not making effective use, nor reaping the benefits of emerging technologies such as AI and machine learning. Sarah Friswell is correct on the need to prioritise data integration and ensure seamless and frictionless customer journeys and experiences. The report indicate that only 62% of brands claim to have a single customer view across all channels. This is particularly dangerous in retail, where success is dependent on fully understanding and knowing your customers. Once this is in place, that’s the time for brands and retailers to invest in AI, ChatGPT tools. In addition to other new technologies that can support store associates and give meaningful business insight based on customer data.
