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Enhancing Customer Experience with Digital Price Tags

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Today’s shoppers demand transparency, convenience, and personalized experiences. Digital price tags—also known as electronic shelf labels (ESLs)—are emerging as a powerful solution to meet these expectations. By offering real-time pricing updates, detailed product information, and seamless integration with inventory systems, ESLs help retailers reduce costs and enhance both operational efficiency and customer satisfaction. Leading brands like Walmart and Carrefour are already harnessing this technology to stay ahead of the competition and deliver the exceptional shopping experiences that consumers now expect.

RFID vs. Digital Price Tags: Distinct Technologies with Unique Roles

RFID and digital price tackle different aspects of the customer journey—each enhancing the other. RFID (Radio Frequency Identification) works behind the scenes, using microchips embedded in products to ensure real-time tracking and accurate stock management. This allows retailers to streamline inventory processes, reduce stockouts, and accelerate checkout speeds by eliminating manual scanning.

In contrast, digital price tags, or electronic shelf labels (ESLs), focus on the consumer-facing side of retail. These digital displays on store shelves instantly convey up-to-date pricing, special offers, and even detailed product information like ingredients or customer reviews. Together, RFID and ESLs create an integrated, frictionless experience. While RFID optimizes inventory and backend logistics, ESLs directly engage customers with transparent, real-time data—resulting in smoother, faster, and more satisfying shopping experiences.

Streamlining Checkout with RFID: A Win for Customers and Retailers

RFID technology offers a game-changing solution, especially in high-traffic retail environments like grocery stores, where checkout speed is crucial. By automatically detecting every item in a cart without needing manual barcode scans, RFID accelerates the checkout process, drastically cutting down wait times and enhancing customer satisfaction. This means that retailers can serve more customers in less time, especially during busy periods, without sacrificing service quality.

As highlighted by Mediaset Retail, RFID-enabled checkout counters instantly scan and register all items in a cart, transforming what would typically be a lengthy checkout into a seamless, near-instantaneous experience. This efficiency not only reduces customer frustration, but also leads to increased spending, as happy and stress-free shoppers are more likely to make additional purchases. The smoother the process, the more likely it is that consumers will keep returning, creating a cycle of positive customer experiences and loyalty.

Beyond improving checkout efficiency, RFID helps retailers manage inventory in real time, ensuring that stock levels are accurate for both in-store and online orders. While the initial investment in RFID systems may seem significant, the long-term return on investment—through operational savings, increased customer loyalty, and improved shopping experiences—makes it a vital technology for the future of omnichannel retail.

Digital Price Tags Can Provide More Transparency to Consumers

Modern digital price tags, such as electronic shelf labels (ESLs), offer far more than just pricing information. Enhanced with technologies like Near Field Communication (NFC) and Quick Response (QR) codes, these tags provide consumers with valuable insights, including nutritional details, allergen warnings, stock availability, product reviews, and even real-time currency exchange rates. Some advanced Bluetooth-enabled ESLs take personalization a step further by delivering tailored promotions or price comparisons directly to shoppers’ mobile devices.

As Chute Gerdeman highlights, consumers crave immersive, personalized experiences, driving a compelling case for investment in “phygital” retail strategies that blend digital capabilities with physical environments. Personalized shopping experiences can increase consumer spending by as much as 40%, underscoring the financial upside of adopting ESL technology.

ESLs also streamline operations, allowing retailers to rapidly update pricing, sometimes as frequently as six times an hour. This minimizes confusion, reduces labor costs, and eliminates errors associated with manual updates. However, retailers must be cautious about consumer perceptions of dynamic pricing. While ESLs can support seamless promotional updates, 68% of US adults view dynamic pricing as price gouging. Transparency and clear communication about pricing strategies will be critical for retailers to maximize the benefits of digital price tags while maintaining customer trust.

Are Digital Price Tags Worth the Investment?

Digital price tags offer compelling advantages that go beyond their upfront costs, positioning retailers to stay competitive and meet evolving customer expectations.

Cost Savings: Replacing traditional paper tags with ESLs eliminates printing and labor expenses associated with frequent price updates. These savings contribute to a strong ROI over time. Moreover, ESLs enhance operational efficiency by notifying employees of low stock levels, enabling quicker replenishment. For example, Asda’s use of ESLs in Stevenage reportedly saved 60,000 sheets of A4 paper, as noted by The Grocer.

Integrated Logistics: ESLs provide real-time inventory alerts, improving supply chain communication and ensuring a seamless flow of products. When items are out of stock, digital tags can inform customers how long the product will be unavailable, enhancing transparency.

Less Food Waste: Grocery stores can rapidly reduce perishable foods using dynamic pricing before their expiration date, saving tons of food from the trash, and reducing methane from the environment, as well as expensive landfill fees and higher grocery costs for consumers.

Enhanced Product Discovery: By integrating with third-party apps, ESLs enable consumers to locate products, check availability, and receive accessibility-friendly alerts when they are near desired items.

Advanced Analytics: Digital price tags offer retailers valuable insights into consumer behavior. By tracking where shoppers spend the most time and identifying high-traffic areas, retailers can optimize store layouts and better cater to customer preferences.

The Human Touch in a Tech-Driven Future

While technology like digital price tags and RFID systems provides the foundation for automation and smarter decision-making, humans remain central to shaping exceptional customer experiences (CX). Retail associates play a pivotal role in driving satisfaction and loyalty through empathetic, personalized engagement.

By automating repetitive tasks and streamlining processes, technology empowers retail staff to focus on meaningful interactions with customers. This synergy between human connection and technological innovation elevates CX, ensuring a seamless and memorable shopping journey that resonates with consumers on a deeper level.

Retailer Takeaways from 2024 Holiday Shopping Trends

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As we look at the insights from 2024 holiday shopping trends, several key themes have emerged, shaping how consumers are approaching spending and how retailers can adapt to meet their needs. Here’s what we’ve learned so far:

1. Early Holiday Shopping Trends are Becoming the Norm

In 2024, consumers began holiday shopping earlier than ever. Many started as early as August, with more than half of shoppers beginning by October. Consumers planned to spend as much or more in 2024, but the shift to early shopping has been largely driven by a desire to spread out expenses and capitalize on early promotions. Retailers who ramped up supply chains and launched holiday campaigns early have seen the benefits of engaging shoppers before the traditional holiday rush.

2. Price Sensitivity Is Increasing

Economic pressures have heightened consumer focus on price, with two-thirds of global shoppers prioritizing affordability when choosing where to shop. Many shoppers are also turning to value-driven alternatives, including private labels, the sharing economy, discount stores, as well as platforms like Temu, AliExpress, and Shein, challenging retailers to deliver competitive pricing without eroding brand value.

3. Omnichannel Shopping Is Essential

2024 has shown that consumers are increasingly expecting a seamless omnichannel experience. They want to shop online, check in-store availability, and enjoy the convenience of buying online and picking up in store (BOPIS). Retailers are realizing that investing in a mobile-first strategy is key to capturing sales. Mobile shopping continues to dominate, with more than half of online transactions occurring on mobile devices, making responsive web design and mobile-optimized checkout crucial.

4. AI Is Revolutionizing Customer Experience

AI tools and generative AI (GenAI) are playing an increasingly important role in retail this holiday season. From personalized recommendations to inventory management, AI is helping retailers enhance the customer experience by predicting trends, offering tailored shopping suggestions, and providing chatbots for immediate support. Retailers leveraging AI are better able to deliver customized discounts and promotions at scale, which is critical for converting browsing shoppers into buyers.

5. The Rise of Self-Gifting

Self-gifting, particularly among Millennials and Gen Z, is becoming a significant trend. Many consumers are not only purchasing gifts for others, but are also buying for themselves. Retailers are tapping into this trend by promoting deals that encourage self-gifting, especially in categories like fashion, beauty, and branded merchandise. Offering “buy one, get one” promotions or personalized shopping experiences helps encourage these purchases.

6. Sustainability Remains a Priority

Consumers, especially younger generations, are making purchasing decisions based on sustainability. 80% of Millennials and 66% of Gen Z consider sustainability an important factor in their buying behavior—and they’re willing to pay 9.7% higher prices for it. Retailers are responding by promoting eco-friendly products, sustainable packaging, and integrating sustainability goals into their overall business strategies. Transparent sustainability practices are becoming a key differentiator in the crowded holiday marketplace.

7. Traditional In-Store Events Are Losing Ground

While in-person shopping is still important, traditional events like Black Friday are losing their appeal. Consumers are increasingly gravitating toward online shopping events like Cyber Monday, which has now extended into Cyber Week. The shift toward longer shopping events allows retailers to capture sales across a broader window of time and meet the demands of multiple generations. As a result, retailers are refining their marketing strategies to target specific demographics on the most effective platforms—TikTok for Gen Z, Facebook for older consumers, and email for others.

8. The Silent Generation’s Spending Power Is Underestimated

While much attention is paid to Millennials and Gen Z, it’s becoming clear that the Silent Generation (those aged 75+) holds significant spending power. Research shows that while they do not plan to spend as much as Millennials this holiday season, their buying behaviors are often overlooked by retailers focused on younger generations. Inclusive marketing strategies that speak to older consumers could prove to be a lucrative opportunity for retailers in 2024.

9. Social Commerce Is Booming

Social commerce has grown substantially, with platforms like Instagram, TikTok, and Facebook driving direct sales through engaging, shoppable content. Social commerce sales in the U.S. more than doubled between 2020 and 2023, and 2024 is expected to follow this trajectory. As mobile-first shopping continues to rise, retailers are increasingly leveraging social media to meet consumers where they spend a significant amount of time and to provide a seamless, shoppable experience.

10. Consumers Are More Willing to Shop Through Discounted Platforms

While big-box retailers and well-known brands are still dominant players, discount platforms like Temu and AliExpress are gaining traction. Offering a wide range of products at lower prices, these platforms appeal to budget-conscious consumers looking for deals. This competitive threat will likely shape the strategies of major retailers in 2025 and beyond, who will need to balance value-driven offers with maintaining brand loyalty.

How Retailers Can Thrive in 2025

As 2024 ends, the blueprint for retail success in 2025 is taking shape. The retailers thriving this season have embraced early shopping trends, invested in personalized experiences, and demonstrated a clear commitment to sustainability. These are no longer just tactics—they are strategic imperatives for future growth.

Looking ahead, retail leaders must prioritize agility and innovation to meet evolving consumer demands. Early and decisive action on AI-driven solutions, omnichannel excellence, and mobile-first strategies will set industry leaders apart. At the same time, the rise of self-gifting, value-driven platforms, and social commerce presents untapped opportunities that demand attention.

The path forward is clear: to remain competitive, retailers must lead with a customer-centric vision, seamlessly blend digital and in-person experiences, and foster trust through transparency and purpose-driven strategies. The retailers who execute on these priorities will not only navigate change but define the future of retail.

Credit card purchase

What’s Next in Embedded Lending for Retail

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By integrating financial services into their retail platforms, businesses are unlocking new revenue streams while enhancing customer loyalty and engagement. By offering financing options like Buy Now, Pay Later (BNPL), retailers can increase revenue and deepen customer engagement. With the global embedded finance industry projected to reach $1.5 trillion by 2030, growing at an annual rate of 27.5%, this movement signals a shift in consumer expectations and retail strategies. For retail leaders, the message is clear: embedded lending is no longer optional—it’s a competitive necessity.

Expanding Access with Embedded Lending

Embedded lending democratizes access to financial services by evaluating creditworthiness through alternative data, allowing more customers to participate. Philipp Buschmann, Co-Founder and CEO of AAZZUR, emphasized in Retail Voices how this innovation creates a competitive marketplace, enabling retailers to act as financial service providers. Customers who might not qualify for traditional loans can secure financing, resulting in increased sales and broader consumer reach.

Starbucks

Unlocking New Revenue Streams

Partnering with third-party lenders offers retailers diversified revenue streams while enhancing the customer experience. Starbucks provides a prime example; by embedding financial products, the company has personalized customer interactions, driven brand growth, and outpaced competitors in building deep customer relationships. According to Bain, payments and lending dominate embedded financial services, complemented by value-added offerings like insurance and tax services.

For retailers, these partnerships generate additional income and elevate brand loyalty, creating a virtuous cycle of engagement and profitability.

The Gen Z and Millennial Imperative

Embedded lending has become a strategic priority for retailers targeting Gen Z and Millennials. A third of these consumers say they would abandon a purchase if financing options weren’t available. Lenovo and Jerome’s Furniture showcase how embedding lending into the purchase journey drives higher order values and loyalty. By offering instant credit decisions at checkout, they remove financial barriers and streamline the customer experience.

Retailers that fail to adapt risk alienating these crucial demographics—and losing ground to competitors.

Gen Z on comupter

Transforming B2B Transactions

Embedded lending’s impact isn’t limited to consumers; it’s revolutionizing B2B transactions as well. Anil Stocker, CEO of Kriya, predicts a “colossal” impact on efficiency and growth, enabling faster credit approvals, seamless payments, and steady cash flow for retailers.

For B2B buyers, embedded lending expands purchasing power, making large orders more feasible without delays. For retailers, it ensures reliable cash flow and fosters stronger supplier relationships. Integrating financing directly into B2B platforms will empower businesses to grow while meeting customer demands for flexibility and speed.

Future Trends: AI, Blockchain, and DeFi

The future of embedded lending is being shaped by cutting-edge technologies like artificial intelligence (AI), machine learning (ML), and blockchain. These innovations are poised to transform the retail finance landscape by enhancing efficiency, personalization, and security.

AI and Machine Learning

According to EY, AI and ML will revolutionize embedded finance in several key ways:

  • Risk Assessment: By analyzing vast data sets, AI can predict repayment likelihood with precision.
  • Credit Scoring: Retailers can use AI to assess creditworthiness and determine lending terms instantly.
  • Personalized Offers: Tailored financing options can be crafted based on customers’ spending habits and credit profiles.
  • Inclusion: AI supports alternative lending models like peer-to-peer and crowdfunding, expanding access to financial services.
  • Fraud Detection: Advanced AI systems enhance security by identifying and preventing fraudulent transactions.
Online shopping

Blockchain and Decentralized Finance (DeFi)

Blockchain technology and DeFi are set to further enhance embedded finance by facilitating near-instant transaction settlements and reducing counterparty risk. According to PYMNTS, DeFi protocols streamline payment systems and improve cash flow efficiency. Retailers that adopt these technologies will position themselves as leaders in providing seamless, secure, and transparent financial services.

By integrating these advanced technologies, retailers can offer cutting-edge financial solutions that not only meet consumer expectations but also drive long-term growth.

Credit card

Challenges with Embedded Lending

Retailers do face certain challenges in embedding the necessary technology, especially using legacy systems. There are several hurdles many retailers will need to overcome to not only be able to offer comprehensive embedded finance, but to convince their customers that the option is secure. There are several third-party solutions entering the market who can help retailers make the leap forward.

By embedding an entire body of financial services, such as payments, lending, insurance, and investment options, directly into their platforms, retailers will be able to offer much more personalized services that make the shopping experience more efficient and convenient. The automobile industry tapped into this a long time ago, offering in-house and on-the-spot financing so that customers can drive away in the car of their dreams.

As we’ve seen with loyalty programs, customers are only willing to provide information to retailers if they feel that their information is protected and secure. It may take extensive communication to relieve consumers of the concerns they might have about retailers obtaining financial information.

The regulatory environment is going to require retailers to offer some of the same considerations – such as disputing charges on BNPL and other embedded financial services – as are offered with credit card purchases. The Consumer Financial Protection Bureau has already taken action to ensure consumer protections are in place.

The Future of Retail Finance

The evolution of embedded finance marks a turning point for retail. Retailers that embrace this opportunity will distinguish themselves as leaders in delivering personalized, convenient, and secure financial solutions. By addressing challenges and investing in advanced technologies, forward-thinking retail executives can position their brands for long-term success in a competitive and rapidly evolving landscape.

Embedded lending is not just an addition to retail—it’s the foundation of a future-ready, customer-centric approach to shopping.

How Dupe Culture is Reshaping Retail

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Navigating Dupe Culture

Dupe culture has emerged as a disruptive trend within retail, signaling a powerful shift in consumer spending, especially among Gen Z shoppers. For retailers, this growing demand for “dupes” is not simply about cost-effectiveness; it’s a shift that could redefine brand equity and reshape market positioning. As Gen Z, a generation marked by financial prudence and a heightened awareness of value, becomes a dominant consumer force, retailers must consider how dupe culture could influence both their customer base and overall brand perception.

The Allure of Dupes

Dupe culture—short for “duplicate”—is a phenomenon in which consumers actively seek nearly identical, lower-cost alternatives (“dupes”) to premium products that match in quality or functionality. Popular categories for dupes include luxury makeup, skincare, and designer apparel, with fast-fashion brands like Shein and Temu leading the way by providing cheap alternatives.

From home décor and tech gadgets to fashion accessories, dupe culture spans industries, allowing cost-conscious consumers to find “luxury for less.” This rising preference for dupes challenges traditional brand loyalty and raises the stakes for retailers aiming to balance premium offerings with value-based options.

The Consumer Appeal of Dupes

The dupe trend is reshaping consumer culture, with influencers actively hunting for budget-friendly alternatives to high-end clothing, beauty products, and home décor. This pursuit is not just about savings; it’s the thrill of discovery and the joy of sharing these finds. Unearthing a worthy dupe brings a sense of accomplishment; there’s no shame in choosing a “knock-off.”

“The rise of dupe culture speaks to a generational shift in consumption of goods and media,” said Jennifer Baker, growth marketing leader at creator management platform Grin. “Previous generations may have shopped for knockoffs on the sly, but Gen Z has not only normalized buying knockoffs or generic products, but has grown the #dupe movement into one of the most searched terms on social media.”

According to eMarketer, around one-third of makeup consumers ages 18 to 34 (33%) and 25 to 34 (35%) bought a dupe due to something they saw on social media. And research conducted by Alexandra J. Roberts for Northeastern University’s School of Law, revealed that “71% of Gen Z  and 67% of Millennials report they sometimes or always buy dupes. Where older generations clandestinely purchased dupes hoping to pass them off as the real thing, young bargain-hunters eschew gatekeeping and proudly share their finds with friends and followers.”

One-third of makeup consumers ages 18 to 34 buy dupes inspired by social media. Research from Northeastern University shows 71% of Gen Z and 67% of Millennials regularly purchase dupes, proudly sharing their finds as a badge of value over exclusivity. This financially savvy approach is redefining brand loyalty and pushing retailers to rethink how they deliver value.

Gen Z’s financially savvy, value-driven approach is fueling the rise of dupe culture. This generation is redefining brand loyalty, pushing retailers to reconsider how they deliver value and exclusivity.

Hashtags like #DupeAlert or #DupeCulture make it easy for consumers to find these alternatives. However, according to Roberts, “Amazon has banned its use in product descriptions, TikTok has blocked the hashtag #designerdupe, and Target’s legal team forbids the company from saying the word.”

Consumers know how to get around the hashtag and still share their favorite finds. BuzzFeed published a list of Amazon products that were “very similar” to higher-priced products; DUPETHAT, an Instagram influencer, doesn’t use the hashtag in her posts but has over a million followers.

But it’s about more than just finding a less expensive alternative to a popular luxury brand. It’s also about the thrill of discovery. This challenge to the traditional notion of luxury, where exclusivity and price once defined value, is driven in part by the constant companion of economic uncertainty over the past several years. Most shoppers are more budget-conscious, and dupe culture allows them to indulge in luxury experiences without the luxury price tag.

But for brands, it can be another story. When a $10 foundation is hailed as a perfect match for a $50 high-end product, it can dilute the prestige associated with the original brand. However, some brands have embraced dupe culture by marketing themselves as an affordable alternative to luxury, while other designers are creating their own dupes to capture market share.

Brands Thriving in Dupe Culture

e.l.f. Cosmetics has embraced dupe culture by aligning closely with its target audience. Influencer Marketing Factory attributes e.l.f.’s success to how it has “adopted the voice of its loyal beauty community, leaning into Gen-Z slang, TikTok trends, and playful comments.”

Olaplex, a pioneer in “bond-building” hair care, has also capitalized on dupe culture. When the hashtag #olaplexdupe hit over 30 million views on TikTok, the brand humorously joined the trend by sending influencers a “viral dupe” of a fake product, Oladupé No. 160, to turn imitation into brand engagement.

Lululemon hosted a “dupe swap” that allowed consumers to trade their dupes for branded versions. This came after a viral TikTok highlighted leggings that closely resembled Lululemon’s at a lower price point.

H&M and Mugler collaborated to create accessible high-fashion pieces, embracing the blending of luxury and fast-fashion. Fast-fashion retailers like H&M and Target openly sell duped products, generating buzz and catering to demand for high-quality yet affordable alternatives. These partnerships benefit designers by expanding brand visibility and reaching new audiences.

@jordannkelsey

The perfect new dupes by Mugler x H&M ✨ im into it, what do you think? #muglerxhm #mugler #fashioncollab #fashiontrends #hottopic #fashionnews

♬ Aesthetic - Tollan Kim

Sophie Hardie, client director at the Goat Agency, advises brands to lean into dupe culture. She says, “Brands don’t need to worry about their reputation being damaged… Instead of fighting dupes, high-end brands should light-heartedly engage with popular culture, showing confidence in their brand’s power.”

The Future of Dupes: Risks and Opportunities in Retail

As dupe culture expands, it brings both challenges and opportunities to retail. While dupes may not directly infringe on IP, the line between inspiration and imitation is increasingly blurred, with some designers seeing dupe culture as unregulated and exploitative. One indie designer described how an Amazon seller duplicated her product and used AI to alter her promotional videos without permission; another went viral after alleging a major retailer appropriated her original designs. Such cases underscore the vulnerability of creatives in a world where duplication technology is advancing rapidly.

Looking ahead, retailers may face more regulatory scrutiny. Evolving IP laws could strengthen protections for designers, especially around unauthorized AI use to imitate original work. This also raises concerns about consumer trust, as shoppers may struggle to distinguish authentic products from replicas. Retailers should innovate to help their brands stand out from fast-fashion dupes.

A crucial aspect of dupe culture is its environmental impact. Fast fashion, largely driven by dupes, contributes more to climate change than aviation and shipping combined, with textile production responsible for 20% of industrial water pollution, according to a report from a The Fifth Agency. Brands that emphasize fair labor practices and sustainable sourcing could gain loyalty and stand apart from dupe-centric competitors.

Ultimately, brands can address the rise of dupe culture by focusing on quality and authenticity while embracing transparent, ethical, and eco-conscious initiatives that resonate with today’s values-driven consumers.

AI, Retail, and the Do-It-For-Me Economy

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Forget DIY! DIFM (Do-It-For-Me) is the new name of the retail game, driven by AI technology that includes conversational AI chatbots, AI-driven personalized recommendations, and powerful data analytics for better decision-making. Time-pressed consumers are increasingly outsourcing not just tasks but decisions, creating a golden opportunity for retailers.

The “Do-It-For-Me” economy and its overlap with AI is transforming retail. AI-powered home reordering to virtual beauty consultations, DIFM services offer convenience and personalization that busy customers crave. Let’s breakdown the benefits and the implications.

Why Do-It-For-Me?

The DIFM economy is growing as consumers increasingly prefer services where experts or automated systems complete tasks on their behalf, rather than the traditional DIY (Do-It-Yourself) approach. It’s a shift driven by convenience, time savings, and the desire for professional results.

“The do-it-for-me movement caters to consumers who don’t have the time, resources, or desire to complete a certain task. So, whereas DIY would involve teaching a customer how to complete a task themselves, DIFM would have a business do the job for them. Although the do-it-yourself (DIY) trend had its time to shine, it’s now fading away. Replacing it is the do-it-for-me (DIFM) movement, which is changing how customers interact with businesses and how companies respond to consumer demand” – Business.com

How Does AI Function in the DIFM Economy?

We’ve explored in depth how AI can improve retail and restaurants. But AI is an essential component of the DIFM economy, providing sophisticated tools and technologies that cater to growing consumer demand for convenience and efficiency. In retail, this manifests in several ways:

Customized Recommendations – Because AI can crunch data quickly and effectively, it becomes a powerful tool for personalized shopping. Brands offering personalized shopping experiences see a 40% increase in consumer spending. Using the customer’s historical purchases, online searches, and demographic information, it can serve up recommendations to customers in-store or online. This not only makes them feel noticed and catered to but also increases their loyalty and spend.

Virtual Assistants – A retail AI chatbot offers a human-like experience with conversational AI capable of responding naturally, answering questions, and functioning as a virtual assistant to help customers find products and make purchases. AI chatbots have proven to be game changers in the retail industry, boosting sales by an impressive average of 67%. Notably, 26% of all sales originate from initial interactions. According to Gartner, Chatbots are predicted to become the primary channel for customer service in 25% of all businesses by 2027.

Automated Service – Once again, chatbots for retail come to the rescue, providing rapid, no-wait customer service for everything from locating products to processing returns. The instant service provided through automation increases customer satisfaction – gone are the days of waiting on hold for 20 minutes for the next available customer service rep. Customers now get immediate gratification with conversation AI and can escalate to a human when needed.

Walmart has been developing DIFM solutions that are enhancing the consumer experience.

  • Voice shopping through Walmart Voice Order allows customers to effortlessly reorder items using their smart speakers and mobile devices.
  • Text to Shop lets customers conveniently search for, add or remove items from their carts, reorder favorites, and schedule pickups or deliveries via quick text conversations on iOS and Android devices.

Walmart continues enhancing its mobile app experience to provide a more personalized shopping trip for customers on the go. An improved search tool now provides suggestions and recommendations tailored individually based on location, past purchases, product interests, and browsing history. Customers can also now find recommendations in dedicated sections of the app, like trending near me, new arrivals, rollbacks, and more.

Augmented Reality (AR) and DIFM Retail

AR is playing a huge role in changing how consumers shop. Whether in-store or online, AR allows customers to “try before you buy.” How? With AI interior design, you can use AI home rendering to visualize how a product will look in your room. Similarly, you can virtually try on clothing in front of an AR mirror in the store or through an app. United.ai highlights the key benefits of AR for DIFM interior design:

  • Utilizing AI tools for interior design revolutionizes the way spaces are envisioned and executed, allowing for the creation of designs that perfectly match individual preferences and spatial constraints.
  • With AI, designers can easily simulate and visualize spaces in 3D that enable clients to see and modify their future interiors in real-time.
  • AI technology streamlines the selection of furniture, color schemes, and materials.
  • AI-driven analytics can predict user needs and recommend design adjustments, leading to more innovative, personalized, and adaptable living spaces.
  • The integration of AI in interior design significantly reduces time and costs associated with manual planning and revisions.

Developing a Strong DIFM Strategy

Behind the scenes, AI is already working to improve operational efficiencies, improve supply chain excellence, and transform labor requirements. For example, Amazon achieved a 225% decrease in “click to ship” time by utilizing machine learning, reducing it to 15 minutes.

But the integration of AI in DIFM strategies can have an even larger impact on retailers, because by providing this desired service for customers it not only enhances customer experience and improves loyalty but can increase how much the customer spends.

When properly introduced, DIFM strategies should have a positive impact on core product sales. A great example is the DIY retailer, Wickes. Wickes began implementing their DIFM strategy in 2021.

Wickes DIFM sales doubled in a year. Its “performance was driven by having sales in local trade, DIY (or Core), and Do-It-For-Me (DIFM), with two-thirds of its sales in 2021 driven by digital channels. Its Core like-for-like sales increased by 35.7% on a two-year basis, while DIFM orders strengthened throughout 2021 from Q2. DIFM like-for-like revenue grew by 8.5% for the full year, with ‘buoyant’ bathroom sales.”

Actionable Takeaways for Retail Leaders:

  • Leverage AI for Personalization: Implement AI-driven solutions to offer personalized shopping experiences that can increase customer spend and loyalty.
  • Integrate AR for Enhanced Engagement: Utilize AR to provide immersive “try before you buy” experiences, reducing returns and enhancing customer satisfaction.
  • Invest in Cloud-Based Infrastructure: Use cloud computing to gain deeper insights into consumer behavior and streamline operations, enabling more agile and responsive business strategies.
  • Develop DIFM Offerings Thoughtfully: Ensure DIFM services align with your brand’s core values and customer expectations, focusing on enhancing rather than replacing the DIY experience.

AI is a key enabler of the Do-It-For-Me economy, transforming the retail sector by providing personalized, efficient, and automated services. As consumers continue to demand convenience and professional results, the integration of AI and conversational AI chatbots in retail will only grow, driving further innovation and reshaping the shopping landscape.

The Shoppable Content Era

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Some of you might remember the infomercial era—those late-night product pitches that caught sleepless viewers at their most vulnerable, selling everything from kitchen gadgets to miracle cures. Fast forward to today, and the concept of shoppable content has taken that idea and given it a digital-age makeover. Instead of drawn-out monologues, you now have instant, interactive shopping at your fingertips on platforms like Instagram, TikTok, and YouTube. With just a click or a swipe, you can buy what catches your eye in a seamless blend of entertainment and commerce. Whether it’s a livestream shopping event or a shoppable video from your favorite influencer, today’s shopping experience is all about engaging audiences in real-time, on their own terms.

For consumers, it’s all about convenience and immediacy; for brands, it’s an opportunity to engage audiences in more personalized and creative ways. Shoppable content is revolutionizing the retail landscape, making shopping more immersive, interactive, and enjoyable than ever before.

Why Shoppable Content?

More than a driver of immediate sales, shoppable content plays a crucial role in fostering long-term brand loyalty for businesses. By making products instantly accessible at the point of inspiration, your customers are more engaged and satisfied. That builds a deeper connection between brands and their audiences.

This strategy fits perfectly within a broader omnichannel approach, where digital transformation and customer experience management are keys to staying competitive. Shoppable content stands out as a pivotal element in creating a cohesive and personalized shopping journey. The goal is to ensure that every interaction with the customer is an opportunity to reinforce brand affinity and drive future sales.

The Competitive Advantage

By integrating shoppable elements into social media posts, videos, and even live streams, brands capture attention and convert engagement into sales in real time.

Beauty brand Sephora has successfully integrated shoppable Instagram posts into its marketing strategy, allowing users to purchase products directly from their feed. It’s an example of mastering social commerce to increase conversion rates and build stronger customer loyalty.

It’s worked. Digital storefronts have allowed Sephora’s 20 million social media followers to browse and buy products directly in the Instagram app. In August 2024, Instagram users in the United States spent an average of 33.1 minutes per day using the app. This half hour offers a prime opportunity for brands like Sephora to catch potential customers, as each minute spent on the app increases the likelihood of turning casual browsing into purchasing decisions.

This strategy was heavily influenced by the success of Sephora China’s partners, who served as a roadmap for enhancing the consumer experience in U.S. stores, according to Carolyn Bojanowski, Sephora’s general manager of e-commerce, in a Quartz news article. China’s social-commerce market exceeds $300 billion in annual sales.

L’Oréal introduced livestream shopping into its marketing strategy and quickly found success. The cosmetics company offers livestream makeup tutorials on YouTube and Instagram. Customers can meet with senior makeup and skincare experts who advise them on how to create popular looks using L’Oréal products.

During the livestream, the company creates excitement with calls to action like “click link for a 20% discount.” L’Oréal has held more than 50 livestream shopping experiences across five countries. At the same time, the company has seen a 150% increase in virtual try-ons through augmented reality (AR) immersion.

AI and Shoppable Content

As the digital shopping landscape evolves, shoppable content continues to grow, with sales through social platforms projected to reach  $82 billion in the United States by 2026.

Artificial intelligence is a major driver of this growth, enhancing the consumer experience through innovations like AI-powered shopping ads, virtual try-ons, and 3D product views. These technologies not only boost engagement and click-through rates but also provide a more personalized and immersive shopping journey, making it easier for consumers to interact with and purchase products directly within content.

Live shopping events are also gaining traction, where brands host live streams featuring product demonstrations, exclusive deals, and direct links to purchase items in real-time. These events are often powered by AI to optimize timing, content, and audience targeting, ensuring that the right products are showcased to the right customers.

AI algorithms also collect and process data from livestreams. This data often includes viewer comments, reactions and even purchasing patterns. Creating a personalized shopping experience then becomes easier and allows businesses to improve their customers’ overall satisfaction.

AI can even provide real-time language translation, allowing businesses to expand their markets, as well as enhance livestream shopping through image recognition capabilities.

Determining the ROI of Shoppable Content

  1. Sales Conversion Rates: One of the most direct indicators of ROI is the sales conversion rate, which measures the percentage of users who make a purchase after interacting with shoppable content. By tracking how many clicks on shoppable links result in actual sales, brands can gauge the immediate financial impact of their content.
  2. Customer Lifetime Value (CLV): Beyond immediate sales, it’s important to consider the long-term value of customers acquired through shoppable content. CLV helps brands understand how much revenue a customer will generate over their entire relationship with the brand. If shoppable content consistently attracts high-CLV customers, its ROI is likely higher than campaigns that only drive one-time purchases.
  1. Engagement Metrics: ROI isn’t just about direct sales. Engagement metrics such as click-through rates (CTR), time spent on content, and social shares can also provide insight into how well shoppable content resonates with the audience. High engagement often leads to stronger brand loyalty, which can translate into long-term financial returns.
  1. Attribution Modeling: To get a comprehensive view of shoppable content’s ROI, brands should use attribution modeling. This method tracks how different touchpoints—such as social media posts, email campaigns, or product pages—contribute to a sale. By understanding the role that shoppable content plays in the overall customer journey, brands can more accurately allocate credit and resources.
  1. A/B Testing: Conducting A/B tests allows brands to compare different versions of shoppable content to see which performs better. By experimenting with various elements—such as product placement, call-to-action buttons, or content format—brands can identify what drives the highest ROI and refine their strategies accordingly.

By leveraging these metrics and analytical tools, brands can determine a more accurate ROI of their shoppable content, allowing them to make data-driven decisions that enhance their marketing effectiveness and drive sustained growth.

Brands Getting It Right

Away is a travel brand that leverages social media and user generated content to reach consumers and not just sell products but build their brand around a cult of personality that truly engages, entertains, and attracts consumers.

ASOS leverages both shoppable content on Instagram and Snapchat, as well as user-generated content and encourages consumers to post their own photos with the hashtag #AsSeenOnMe.

With nearly 40 million followers on Instagram, H&M has transformed their Instagram page into a shoppable platform by tagging items and providing convenient purchase links.

Net-a-Porter is considered one of the most successful social commerce shopping successes. They give users insight and entertainment through well-written articles that contain links to products, like this interview with Gracie Abrams that includes photos with get-the-look links.

The Shoppable Content Outlook

The future of shoppable content is promising, with projections indicating that social commerce sales could reach $1.2 trillion globally by 2025. As consumers increasingly prefer to discover and purchase products directly through social media, retailers have a significant opportunity to meet their customers where they are, particularly as Gen Z leads this shift. However, success in shoppable content requires careful execution—common mistakes such as poor user experience, broken links, low-quality visuals, and ineffective influencer partnerships can deter potential buyers. To fully capitalize on this trend, retailers must prioritize seamless integration and continuously optimize their content strategies.

Can AI in Retail Fix the Pervasive Service Problems?

Can AI in Retail Fix the Pervasive Service Problems? 1440 428 ASG
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When was the last time you had poor service at a store or restaurant? I bet you can think of more than a few instances. Now think of the last time you experienced truly exceptional service. If this is harder to think of, you’re not alone. Retailers’ shift toward operational excellence during the pandemic has caused many retailers to leave us underwhelmed by our retail experiences.

One troubling statistic is that one in every three customers will walk away from a brand they love after bad service. On the other hand, consumers are willing to pay up to 16% more for great service and up to 18% more for luxury services, not to mention increased loyalty to retailers who get it right. Exceptional service can drive impulse purchases too, with 49% of buyers making spontaneous decisions after a personalized experience.

Biz Tech shared insight from the IBM Institute for Business Value report that “From slow checkout lanes to absent associates, in-store shoppers are still struggling with the same headaches they’ve always faced.” They go on to point out, “that means that only 9 percent of 20,000 customers in 26 countries report satisfaction with their in-store shopping experiences, the report says. For e-commerce shoppers, the number is only slightly higher, at 14 percent.”

Investing in customer experience makes sense. So why isn’t every brand doing it? And can  the integration of AI in retail help?

Challenges in Retail CX

Despite advancements in retail technology, many brands have prioritized operational efficiency over customer experience post-pandemic. A study by SAP found that over 60% of marketing leaders acknowledge the digital shift in CX strategy, yet nearly two-thirds lack confidence in their CX strategy’s ability to retain customers in this new environment.

Yet, consumer loyalty declines as CX declines, and almost half of consumers think CX is getting worse. Most retail leaders believe that investment in technology, including AI, is the way forward, but struggle with the uncertain ROI. They are investing, though. The Global AI In Retail market size is expected to reach $24.1 billion by 2028. Investing in technology to improve CX is necessary.

“What’s becoming clear is that customer-centricity is proving key to retailers’ improving fortunes. The stores that are thriving are the ones building on strong, digitally driven and adaptable omnichannel foundations, supporting customers to shop when, where and how they want.” – Retail Week

AI can help improve CX. It can be very good at engaging with customers to make product suggestions based on historical purchases; it can approximate human interaction to a high degree of success. But – and it should not be surprising – it can also create disastrous consequences, especially large language model (LLM) hallucinations. LLMs can “hallucinate” facts and make mistakes in reasoning.
To avoid disaster, KPMG recommends that companies “develop a ‘responsible AI’ framework to govern all your AI applications” and “ensure that the technology is being used not only ethically, but also legally.”

Intelligent Investment in AI and Machine Learning

Even as the obsession with generative AI and machine learning grows, striking a balance between technology and human-based service is essential.

“Despite the fast pace of technology innovation and the rapid increase in AI solutions as an enabler of EX/CX strategy, 8 in 10 executives agree that human-led support will remain a critical element to employee experience (EX).”

However, investments in AI and ML can help retailers address consumer priorities.

Graeme Geddes, Chief Growth Officer at Zoom says in this Forbes article:
“Generative AI-powered solutions for CX aren’t merely ‘nice-to-haves’ anymore—they are now fundamental for success. Businesses that haven’t invested in AI will fall behind on productivity and customer satisfaction in 2024. Generative AI capabilities with unified communications and omnichannel contact centers are helping CX workers get more done, while deeper analytics on customer sentiment and engagement are enabling CX workers to strengthen relationships.”

The human touch should always exist, but AI can be used for routine tasks to free up people to focus more on the experience for shoppers.
“In the retail industry, AI is proving to be not just a powerful tool but also key to enhancing the capabilities of human workers with actionable insights and complex, automated calculations.” – Forbes.

Generative AI Increases Customer Loyalty

According to a CX Network survey, 28% of respondents recorded a positive impact on customer loyalty through their use of generative AI and 39% percent recorded a positive impact on company profits. The biggest areas of impact were investments in generative AI for virtual agents and agent assists, which reduced the need for human intervention. The ability of AI to analyze and synthesize data to automate simpler tasks and customer responses “enabled agents to focus on more complex issues and high-value interactions.”

Some companies are getting AI right and truly enhancing the customer experience. They’re using it to streamline the customer experience; reduce friction; prevent inventory depletion; provide virtual experiences for trying on everything from makeup to shoes; and answer questions intelligently (with far less hold time) 24/7. MSR Cosmos identified the following retailers who have mastered the power of AI for good to deliver these types of improved experiences:
• Amazon Go
• Walmart’s Smart Shelves
• Sephora’s Virtual Artist
• Nike
• Nordstrom

‘Botshit’ is a Bane

As chatbots take over every aspect of our lives when it comes to online customer service, it’s not always an ideal replacement for humans. In fact, the term “botshit” has been coined to describe the disasters that happen when chatbots are not properly overseen by humans. Air Canada found out the hard way that when their bot offered a customer the ability to claim a bereavement discount after the flight. They had to honor it. It’s the adage of garbage in, garbage out. If retailers want chatbots to be successful, the data they’re being fed must be accurate.

Data-Driven from Start to Finish

To improve AI in retail and ensure it delivers for consumers, retailers need to prioritize investments in AI in ways that free humans to provide better CX while taking over the largely routine and automated functions within the operation.

Investing in technology isn’t just a way to save money on labor costs or reduce inventory costs. Retailers can also use the data gathered by employing AI technology to:
Map traffic. Heat maps can help retailers position products strategically based on traffic patterns.
Improve personalization. By using AI to analyze consumer purchases and preferences, retailers can better personalize offers and product suggestions.
Make supply chains more efficient. From inventory management to supply chain excellence, AI and ML can transform the entire supply chain process, including reducing labor costs and product costs.
Improve customer experience. Smart mirrors, interactive displays, customized digital signage, and interactive displays can enhance the in-store experience.

What’s Next for Retail CX?

Retailers should already be providing seamless omni-channel experiences and personalization, and as we look to how technology will improve CX this year and beyond, it’s as if the era of The Jetsons has finally arrived (ok, maybe not the flying cars – yet). But technology is evolving exponentially, and in the next few years, these things will become prevalent:
• Robots in warehouses, fast food restaurants, and retail shops, like the KettyBot.
• Chatbots like Ada, with language skills and responses imperceptibly human-like.
• Faster decision-making through automation to optimize business operations.

AI’s potential is greater than its best chatbot, though. As Joe Andrews writes in Microsoft Start, “Solely focusing on automation can be a trap for businesses, drawing them into a narrow focus on tasks like AI chatbots and basic troubleshooting. I believe AI’s true potential lies in its capacity for observability. Rather than simply executing predefined tasks, AI must dig deep into data, uncovering trends and patterns within customer interactions that might otherwise remain hidden.”

So while GenAI is “soulless,” as retail thought leader Robin Lewis describes it in The Robin Report, it can “amplify marketing messaging, and deliver design suggestions (for better or worse) that can help designers and marketers. It won’t replace them, but GenAI may be a partner to human decision-making and an alternative to making assumptions about customers and the marketplace.”

Humans will continue to play a pivotal role in shaping CX, driving customer satisfaction and loyalty. But even as retailers employ humans to further actual empathetic engagement with consumers, technology will provide a foundation for automation and intelligent decision-making capabilities that frees the people part of the equation to further elevate the overall customer experience.

Is Mixed Use the Future of Retail?

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Imagine stepping into a vibrant urban oasis where every convenience is at your doorstep and the pulse of the city is right outside your window. This is the promise of North Loop Green in Minneapolis, a visionary mixed use development that is redefining the future of retail and urban living. With its seamless integration of homes, short-term rentals, shops, offices, restaurants, and event and green spaces, North Loop Green transformed blighted city blocks into a dynamic, sustainable community.

Mixed-use developments like North Loop Green offer incredible opportunities for retailers. Not only can these developments bring vibrance to communities and neighborhoods, but public parks, event space, and restaurants mean steady foot traffic and a constant influx of new consumers. These dynamic environments foster community engagement, sustainability, and economic resilience, positioning retailers for long-term success and innovation.

Why Mixed Use Makes Sense For Residents

Skyrocketing housing prices continue to impact renters and homeowners even as the macroeconomic outlook continues to improve. This is driving people to seek alternative living spaces that are more economical—and mixed-use buildings make sense. The World Health Organization reports that 70% of the global population will live in cities by 2050, and as dramatic urbanization continues, mixed-use projects are likely to dominate new real estate construction, according to Northspyre:

“Walkable mixed-use neighborhoods provide pedestrian access to stores, restaurants, and other businesses without requiring the use of a car for transportation. In addition to promoting a healthy, active lifestyle for residents and convenient access to amenities, mixed-use neighborhoods also decrease car dependency, reducing air pollution and making areas more livable overall. “

Nearly 80% of U.S. adults said they would consider a residence in a live-work-shop-play community that offered entertainment, dining, work, and recreation opportunities—and the number of apartments completed annually in “live-work-play” developments quadrupled between 2012 and 2021, rising from 10,000 to 43,700, according to a study from the International Council of Shopping Centers (ICSC).

Mixed-use retail is only growing, and savvy retailers are betting on it for their own growth. Demand for retail locations in mixed-use developments is substantial, with more than 60% of retailers expressing a preference for these environments, according to CBRE. That’s why mixed-use retail spaces offer higher occupancy rates, often between 90-95%, compared to 80-85% for standalone retail properties.

Retail spaces in mixed-use developments also command premium rents, typically 10-20% higher than traditional shopping centers, as noted by ICSC. This willingness to pay higher rents is justified by the built-in customer base and vibrant atmosphere provided by the diverse mix of residential, office, and commercial components within mixed-use developments. Sure, rent is on the pricey end, but a study by the Urban Land Institute (ULI) determined that consumers are willing to spend up to 15% more in mixed-use developments compared to traditional retail environments due to the convenience and enhanced shopping experience.

Foot traffic in mixed-use developments is 20-30% higher than in traditional retail locations, as reported by JLL. This increased traffic correlates with longer dwell times, which are 30-40% higher, and improved customer retention rates, up to 20% greater, according to the ULI data. These factors contribute to robust sales growth for retailers, with an average annual sales growth of 5-10%, significantly outpacing the 2-5% growth seen in standalone locations.

Developments Embracing the Live-Work-Play Lifestyle

Hudson Yards (NYC)Hudson Yards is “the largest private real estate development in the history of the United States and the largest development in New York City since Rockefeller Center.” The site will include more than 18 million square feet of commercial and residential space, more than 100 shops, a collection of restaurants, approximately 4,000 residences, The Shed, New York’s first arts center to commission new work across the performing arts, visual arts, and popular culture, 14 acres of public open space, a 750-seat public school and an Equinox Hotel® with more than 200 rooms.

King’s Crossing (London)King’s Crossing “is the largest mixed-use development to be masterminded in London for over 150-years – an adventurous, dynamic, creatively driven collective in a brand-new postcode, N1C. It’s also the city’s best-connected transport hub, drawing shoppers from across London and all over the UK to visit every day.”

The Center for Potsdamer Platz (Berlin)The Center for Potsdamer Platz is a 1.2 million square foot mixed-use complex with 67 residential units, almost a million square feet of office space, and over 200,000 square feet of retail. “Additional renewal plans have been made for an immersive entertainment experience, expanded retail, globalized culinary offerings with sustainability programming, and the addition of new fitness and lifestyle amenities. This includes a partnership with Nike, activating part of the public realm.”

A Bright Future for the Mixed-Use Development

Mixed-use developments are not without some controversy. We know that gentrification can stem from urban renewal projects that include mixed-use spaces like these. Developers and communities are learning from the lessons of past developments. In East Austin, Tex., a mixed-use development will include affordable housing units, to ensure the long-term residents won’t be priced out.

Nevertheless, demand for mixed-use developments is expected to surge, driven by a renewed desire to engage locally and support neighborhood businesses. These live-work-play environments attract diverse business tenants and residents by integrating safety, wellness, commerce, and connectivity into their design. With the right retail mix, such developments can see up to a 25% increase in rent and property values, according to Green Street Advisors. This is particularly significant as middle-market retail centers, which have traditionally been less innovative, are now transforming to meet the evolving needs of urban living. It will be interesting to see how retail brands evolve their experience to take advantage of the unique community bubbles mixed-use spaces create.

Innovation Labs and Open HQs in Modern Retail

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Dubbed “Test City, USA,” our hometown of Columbus, Ohio is a mecca for start-ups and product testing. The demographics here mirror the larger United States, in a nice mid-sized, Midwestern package.

In the northeast quadrant of the city is Easton Town Center, a pioneer in mall design. Since opening in 1999, it has tested the possibilities for open-air retail that includes high-end retailers, department stores, brick-and-mortar direct-to-consumer stores, restaurants, entertainment venues, and more.

Today it continues to innovate with EastonLABS, a 500-square foot retail space that retailers can rent to test new products. The mall has since added Restau/Lab to give restaurants the same opportunity.

Flagship stores also are transforming into dynamic community spaces—hubs of creativity, collaboration, and community engagement. These “open HQs” allow brands to integrate consumer input directly into the design and development process and foster positive customer experiences at the same time.

“The retail market is under pressure. The retail landscape is evolving. Success at the shelf is no longer about the depth and breadth of inventory, but rather creating engaging experiences for customers. Change is the new paradigm. Retailers need to adapt to current trends to keep a seat at the table.”
– Deloitte

Companies like HP, Starbucks, Ikea, Sephora, and even Major League Soccer have all launched innovation labs and Open HQs to explore new business models, enhance customer experiences and stay competitive.

Yet the vast majority of innovation labs – a whopping 90% according to one industry report – fail or eventually close, falling short of the success they hoped to accomplish.

Here is what retailers who want to stay ahead of the curve and meet consumer demand for a better experience should know about exploring innovation models and avoiding potential pitfalls.

Engaging the Customer in Innovation

Consumer demand for personalization has only been growing, with 71% expecting businesses to get to know their individual interests. Furthermore, 80% of customers agree that the customer experience is just as important as products and services. Open HQs and creative hubs allow retailers to integrate consumer feedback directly into their processes, fostering a sense of community, and improving customer insights. Retailers are hoping to create a new breed of consumers who are emotionally invested in the brand. And with a staggering 72% of total U.S. retail sales projected to (still) happen in physical stores by 2028, the open HQ model offers customers a place to connect personally, even one-on-one with the brand.

An Evolving, But Not-New Concept

The Genius Bar, where customers receive tech support directly from experts, epitomizes the brand’s commitment to customer engagement and service.

Apple Senior VP of Retail Angela Ahrendts explained that she wanted Apple stores to be a town square, “where the best of Apple comes together and everyone is welcome.”

Several retailers in the United States have introduced an Open HQ model, including Nike’s House of Innovation in New York City. Nike offers personalized experiences where shoppers can test products, provide feedback, and even see prototypes in development. This interactive environment not only enhances the shopping experience, but also allows Nike to gather valuable consumer insights.

Nordstrom’s Innovation Lab has continually learned from trial and error how to refine the lab process and continues to lean in to new technologies that allow customers to personalize products and experience seamless online-to-store integration. Their commitment to experimentation and customer-centric solutions sets them apart.

Walmart’s Intelligent Retail Lab (IRL) is focused on customer experience and efficiency. Residing in a 50,000-square-foot Neighborhood Market store in Long Island, the lab uses thousands of cameras on the ceiling and sensors embedded in shelves to monitor the store in real-time to improve efficiency, keep costs down, and enhance the shopping experience for customers. The cameras can even detect the ripeness of produce based on color alone and alert workers when restocking is needed.

In London, the Samsung KX space in King’s Cross is a striking example of a tech brand embracing the Open HQ model. The venue features a range of experiences, from product demonstrations to workshops and events. Visitors can interact with Samsung products in a relaxed, communal environment, providing feedback directly to designers and developers.

Challenges in Innovation

While the Open HQ and Innovative model offers numerous benefits, it also presents significant challenges. Although many companies have announced new labs, just as many have announced closures.

Earlier this year, Walmart announced the closure of its Store No. 8 innovation hub to cut costs. The retail giant cited the lack of the need for the hub as the reason behind the closure since many of the interactive technology features it was testing are now integrated into several stores.

Ikea’s Space10 lab also shut down last fall after the cofounders stated they had reached all the objectives they had set for the lab. One of the lab’s developments in the decade that it was open was the creation of an augmented reality app that allowed consumers to use their phones to see what a furniture piece would look like in their living spaces.

The very way Open HQs and innovation labs are designed lends itself to challenges. Because innovation is continually evolving, labs will inevitably date themselves and risk becoming obsolete. Because of the costs associated with running Open HQs and innovation labs, retailers may close them more quickly if they fail to produce immediate and tangible results. Look no further than the rule of products. For every one that succeeds, another 10 or more will fail. Retailers must balance the cost of such initiatives with the potential return on investment.

To overcome these challenges, retailers need to adopt a flexible approach. Partnerships with local businesses and community groups can help offset costs and enhance the value of the space. For example, hosting events or workshops in collaboration with local artists or entrepreneurs can attract a diverse range of visitors and foster a sense of community.

The Road Ahead

“Experiential retail – a concept that involves creating unique, innovative, and interactive experiences for customers in a physical retail environment – will be a top trend.”
– NetChoice

As retailers continue to experiment with the Open HQ model, the key to success will be adaptability and a genuine commitment to customer engagement. By actively listening to shopper input and incorporating it into their design and development processes, retailers can create a dynamic and personalized shopping environment. This not only enhances the customer experience but also fosters a sense of loyalty and brand advocacy, as customers feel their voices are heard and valued.

The future of retail lies in creating spaces that are not just about selling products, but about building relationships and fostering creativity. Retailers have the opportunity to transform their stores into vibrant community hubs where ideas can flourish, and feedback is actively sought and appreciated. These spaces can host events, workshops, and collaborative projects that engage customers on a deeper level, making the overall experience more meaningful and interactive.

By prioritizing adaptability, embracing innovation, and valuing customer input, retailers can set new standards for what it means to create a truly engaging and dynamic shopping experience.

Living the Brand: Inside Branded Residences

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Imagine a consumer so enamored with a brand that they want to embody it. Isn’t this every retailer’s dream? Enter the creation of branded residences—the next logical step some luxury brands are taking to create a deeper connection with their brand loyalists.

Take the Fendi Chateau Residences in Miami, for example, which feature 58 “flow-through oceanfront residences” featuring interior design by Fendi, white-glove service offered “on an intimate scale,” a spa with European thermal pool, and ultra-luxury concierge services by Fendi Chateau attaché, among other amenities.

Similar branded residences to suit every preference are popping up, and catering to consumers who live and breathe their brands.

Branded Residences Aren’t New – But They’re Hot Now

Branded residences aren’t exactly new. They date all the way back to the 1920s when the Sherry-Netherland became the first branded hotel development to feature fully serviced apartments. The concept gained traction when Four Seasons opened its Boston luxury residences in 1985.

Branded residences are luxury residential properties tied to a brand. Historically, they were only offered by exclusive hoteliers, providing prospective buyers the opportunity to purchase their own beautifully designed residence, either within the hotel itself or in a hotel-owned standalone development.

While hoteliers investing in branded residences was a logical progression, today’s lifestyle, auto, and fashion brands also are getting in the game, leading to a resurgence in these signature homes. In fact, the branded residence sector is up 160% over the past decade, according to London-based commercial real estate brokerage Savills.

“Fashion, a natural extension of one’s lifestyle, seems like an obvious choice for a branded home, and luxury buyers trust that products from fashion houses will retain high-quality details and a refined level of craftsmanship,” writes Emma Reynolds in the Robb Report.

While many high-end fashion brands including Fendi have carved out a niche in the home décor industry, branded residences offer the opportunity for these brands to immerse brand loyalists through touches like customized fabrics and fixtures. These looks not only appear in residents’ homes but throughout the entire building as well.

The Collaboration Behind Branded Residences

Branded residences typically stem from a partnership between a company and a developer in which the brand grants a license to the developer to market and sell residences incorporating its brand. Owners of branded residences are also typically required to pay annual homeowners’ association fees to help maintain the elevated look of the property.

Bentley Residences is an example of one of the newest non-hotel branded residences. Miami, which is known as the “branded residence capital of the world,” is home to these 216 furnished apartments and a host of amenities that rival those found in a five-star resort.

The Waldorf Astoria in New York City is another example of a branded residence, though a co-located type since the construction of 375 residences will sit on top of the hotel space. The residential section, called The Towers, has separate owner entrances and a concierge closet at the entryway of each residence to ensure secure and discreet package delivery.

Want the branded residence experience without the commitment (and cost)? Book a stay at Armani Hotels in Milan or Dubai, the self-described “pinnacle of luxurious living and fine dining” in “an exceptional world of luxury.” Starting at $2,400 a night for a room in Milan, guests can add on one-of-a-kind experiences and services to make their stay at Armani Hotel Milano “more and more exclusive.”

What’s the Draw?

The simple explanation points to modern society’s need for brand familiarity and speaks to the equity that some brands can boast, particularly in the luxury sector.

“We live in a branded world, and buyers of such products seek association with brands they are loyal to and know they can rely on for a premium product,” says Jonathan Nash, a top-producing luxury realtor with Beverly Hills-based Hilton & Hyland.

The allure of branded residences’ elevated level of luxury living appeals to time-starved, affluent, and brand-conscious would-be owners who are attracted to all these properties have to offer, including the exclusive brand experience. After all, these residences not only offer quality design, but security and the highest levels of service. Amenities like valet parking, spa services, dog walking, and even personal concierge services are table stakes.

For examples of unique amenities, look no further than Porsche Design Tower or Bentley Residences, whose auto-centric luxury perks include over-the-top personal car elevators. Major Food Group’s Villa even features a private restaurant and chef-designed kitchens.

The Future of Luxury Branded Residences

Here’s a revealing insight: commercial real estate brokerage Savills estimates that non-hotel brands will account for 20% of the total supply of branded residences by 2030. That’s an increase of 40% from current levels, showing the incredible ongoing transformation and expansion within the branded residences market.

They also predict the demand for branded residences will remain strong in global cities that are hubs for business and education, cultural attractions, and unique experiences. All of those attract the sort of affluence required to live in a branded residence.

In addition to New York, London, and Miami, another hot global market that is predicted to experience a growth in branded residences is Dubai, with 51 operational schemes in the works, according to Savills.

A few of the brands planning on entering the market before 2030 include Dolce & Gabbana, de Grisogono, and Mama Shelter.

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