Marketing Creativity, Technology Needed To Enhance Consumer Connections
As retailers work to attract shoppers to their stores and websites in 2024, they will need to enhance their marketing creativity, expand their use of AI, and meet the growing consumer demand for healthier products.
Those are just some of the topics retailers will need to address over the next 12 months, according to a new report from Acosta Group.
“While we expect 2024 to remain as complex as 2023, brands and retailers will have opportunities to better understand and meet the evolving demands of their customers, securing meaningful growth for their businesses,” said Colin Stewart, executive vice president, Business Intelligence, Acosta Group.
With the New Year now underway, there are five key topics identified by Acosta Group that retailers will need to manage in 2024. They include:
Driving Growth Will Take Standout Creative Measures
Strong promotions will be key in another year of cautious spending, channel shifting, private label purchasing, and value messaging. When developing a promotion strategy, Acosta Group recommends the creation of promotions that don’t erode margins for retailers, brands, or shoppers; the need to deploy/evolve revenue growth management (RGM) programs; and practice disciplined post-promotion analytics
“Consumers will respond to bold, creative promotions that provide them enriched value,” said Kathy Risch, senior vice president, Thought Leadership and Shopper Insights, Acosta Group. “Smart retailers, brands, delivery services, and restaurants are stepping up to create promotions that resonate.”
Seamless Retail Redefines Shopper Delight
Retailers and brands are enabling seamless shopping in the moment and dialing in to reach consumers with innovative tactics and disruptive technology will be necessary to meet shopper demands. Acosta Group recommends that retailers should integrate trade, marketing, and retail media spend, targeting specific shoppers with both in-store and online merchandising to maximize budget, grow sales and improve margin. Retailers should also strengthen product detail page (PDP) searchable words, hero images, infographics, and videos; understand ratings and reviews; and continuously monitor results. Finally, retailers should have a sharper focus on share of shelf and assortment optimization to meet shopper demand and keep shelves stocked.
AI Propels Retail Efficiency And Shopper Experience
The most successful applications of AI will drive efficiencies that improve productivity as they benefit shoppers with an enhanced, more customized shopping experience. Gen Z is the most comfortable with retailers using AI to improve their shopping experience via personalized rewards/recommendations. Increased investment in AI is expected to drive $113B in value by 2025, according to Grocery Doppio.
“The strategic use of AI helps retail operate smarter and faster,” said Stewart.
Three quarters of retail executives surveyed believe they could go out of business if they don’t adopt AI in the next five years, according to Grocery Doppio.
Shoppers Prioritize What’s Not In Their Products
A growing number of consumers are paying closer attention to the ingredients in their foods. FMCG Gurus reported that 41% of consumers have heard of clean label and 78% find it appealing when provided a definition. In the year ahead, it will be important for retailers and product suppliers to better understand analytics segmenting key label attributes, they will need to actively communicate what’s not in the product, and use promotion and digital/social media to educate shoppers and demonstrate value
Retailers Turn Up The Heat To Attract Diners
The level of competition between retailers, c-stores and restaurants could be as hot as ever, further blurring the lines between foodservice and retail. In the year ahead, Acosta said retailers should work to replicate the restaurant experience with food halls and local restaurant partnerships. Convenience stores should respond to requests for hot foods and new, globally inspired flavors for breakfast.