Before taking the leap into tech, Boomi global head of retail and consumer goods, Katherine Buckland built her specialisation in executive roles at GameStop, Hasbro, and Disney, together spanning over 20 years.
She says when the economy gets tough, shoppers usually dedicate more time and energy toward sniffing out deals or using loyalty programs to access rewards or bargains. But are retailers doing enough to make their loyalty programs attractive to recession spenders?
“When you think about what’s changed over the last couple of years, we can’t underestimate how much Covid has impacted retail. Thinking about the technology that came in as a result and the speed of e-commerce, a lot of retailers had an e-commerce site, but it wasn’t a large part of their business. All of a sudden, we were thrown into a situation where that e-commerce site was possibly the only connection to customers. There was a dynamic shift in technology for retailers to get that up and running to ensure it would support their business,” Buckland told Retailbiz in a recent interview.
“When I think about technology that’s now advancing, Artificial Intelligence (AI) comes to mind. One of the things that is important around AI is what it means to each industry. The general population is talking about generative AI with ChatGPT for example, which is also becoming instrumental from a retail perspective, but there is also Graph AI and Computer Vision AI. All three elements play a key part in retail – how and when they’re used, and how technology integration brings them together to deliver enriched data to help retailers better serve their customers.”
Historically, AI in retail has been linked to demand planning, forecasting, inventory management and merchandising, to identify product trends and patterns. Although chatbots have been around for a long time and aren’t anything new, Buckland said it will be interesting to see how customers engage with generative AI like ChatGPT.
“It’s still to be determined how shoppers see ChatGPT working for them from a retail perspective though. Everyone is exploring the space right now so time will tell.
“One area I’m particularly focused on is how do we take AI and drive consumer insights in a more valuable way – thinking about the data and the technology we need to bring it front and centre for retailers, whether it’s in marketing, loyalty or merchandising, to truly understand customer needs and provide better personalisation.”
Retailers need to create trust and resilience within their business to help them navigate the current economic downturn and this comes down to delivering a frictionless experience, according to Buckland.
“Not only understanding customers from a basic transactional data perspective because that isn’t enough anymore. AI can help build out patterns and trends to talk to customers more effectively, while making sure the data is secure and customers are protected from a security perspective because data security is becoming more prevalent not just in retail but across the board.”
When asked about how businesses can increase customer loyalty, Buckland said there are three areas – firstly, a frictionless shopping experience, whether it’s in-store, online or mobile; secondly, greater personalisation and digital engagement, and thirdly, sustainability.
“For sustainability in particular, customers are committed to being more environmentally friendly. It has the potential to help influence a company’s value proposition and although the level of pricing associated with sustainable products is yet to be determined, the more cost-conscious customer is going to have one view and those who are passionate about sustainability will have another view,” she explained.
“When it comes to operational efficiencies, returns are a huge issue. When you think about the fashion industry, returns are incredibly high – up to 40% in some retailers. Retailers need to think more about shrinkage and theft and how are they using AI from a point-of-sale system perspective but equally, hyper personalisation and returns, such as virtual fittings or using technology to help reduce the need to buy multiple items.
“It’s not cost-effective for the retailer to have a high rate of returns and inevitably, it impacts how the customer perceives the retailer as well. It will be interesting to watch the returns space and how returns policies evolve in 2023 and beyond.”
With the challenges associated with the economic downturn, there is a softening of retail sales in certain categories. With changing customer behaviours and preferences, businesses need to think about product innovation to simplify and de-spec products to offer the same quality at a lower price point.
“Simpler shopping and being able to provide a true omni-channel experience is key, as well as offering affordable options that are meaningful through private brands, for example,” she said.
“Looking ahead, I think there’s a generally positive sentiment. Inflation will start to slow, and unemployment will remain low. Although there is economic uncertainty, the point of inflation was to slow spending, and we are starting to see that. Ultimately, consumers will be more conscious of what they’re buying so again, retailers need to make sure they are providing relevant products and services.”