5 Retail Trends Shaping the Experience Economy

Retailers will need to embrace the experience economy and strategically integrate next-generation technologies to effectively navigate enterprise transformation and industry disruption. To successfully enter the new era of cognitive retail, brands should keep these five trends in mind:

1. Customers Are Prioritizing Experiences Over Products.

Nearly 90 percent of consumers say that the experience a company provides is as important as the products it offers. As the retail industry departs from being transaction-oriented, stores will need to reposition themselves as "experience hubs" that prioritize curated experiences and value-added services.

Organizations must take every opportunity to deepen their customer relationships, using stores as a venue to highlight what makes their brand unique, create a sense of community, and use technology to personalize the customer experience (CX).

2. Reducing Friction for Guests Goes Beyond Contactless Checkout Experiences.

Many retailers have incorporated frictionless checkout, but what about frictionless sizing? Or virtual try-on? How valuable is the contactless checkout if it doesn’t supply curated product recommendations on-demand?

Retailers must use technology to design an experience in which every interaction is a powerful and seamless part of the customer journey. Although contactless checkout is a great initial step in modernization, retailers need to find other ways to reduce friction between the door and register.

3. Personalization Relies on a Strong Data Foundation.

Generative artificial intelligence is predicted to yield more than $1 trillion in annual productivity gains by 2032. Access to real-time data is allowing retailers to make faster, more informed decisions that impact how CX is delivered.

For instance, when shoppers share their information with retailers, they expect personalized returns — e.g., experiences, product recommendations, and tailored content. But to create these interactions, retailers must harmonize their data sets.

GenAI accelerates this process and allows retailers to anticipate behavior and offer catered recommendations. To earn loyalty, retailers need to prove they know their customers as individuals, using data effectively to inform every interaction and touchpoint.

4. Strengthening the Supply Chain Through the Lens of the Customer.

The supply chain has always been a critical function for retailers, but never has it been so central to CX. Shoppers now expect products to be available whenever and wherever they need them, requiring a more responsive and transparent supply chain than ever before.

During the 2023 holiday season, Walmart implemented an AI-powered inventory system that combined historical data and predictive analytics to help optimize the availability of holiday items across locations, from distribution and fulfillment centers to Walmart stores themselves.

5. Recognizing the Role Associate Experience Plays in CX.

One often overlooked area of the retail experience is the associate experience. As stores adapt to accommodate omnichannel trends like "order ahead" and curbside pickup, associates are forced to juggle traditional customer service duties alongside new tasks that limit time they can spend interacting with customers.

Research suggests 95 percent of retailers will test and invest in GenAI to enhance product innovation, customer support and CX initiatives by 2027. Many retailers are looking to GenAI labor management tools to enhance their CX delivery. These solutions facilitate task delegation, monitor store activities, and allow associates to respond to issues in real time. They also play a pivotal role in boosting employee morale, onboarding new associates, and providing ongoing education to employees.

Embracing Technology to Deliver Incredible Experiences

GenAI will be a critical tool for retailers, but to truly set their brands apart, they will need to find ways to enrich customer journeys and fuel the experience economy. With this combined focus, retailers will reap the benefits of the new era of cognitive retail and truly set themselves apart.

Sushant Warikoo is senior vice president and business unit head, retail at Cognizant, a professional services company that helps clients become data-enabled and data-driven in the digital era.