In 2023 and beyond, businesses must increasingly navigate a landscape of mixed signals. Inflation has slowed yet remains persistent, showing up in everyday purchases like gas and groceries, while global tensions remain high and the supply chain has yet to fully stabilize. Conversely, consumer spending, the biggest driver of the economy, continues to show a degree of resilience that is compelling brands to invest in new consumer experiences, an investment that may be particularly wise if spending slows and competition for dollars grows.
So how are businesses responding in these uncertain times? We see multiple omnichannel retail trends coalescing around two different themes: optimizing costs and offering more choice will help businesses navigate choppy waters, and accelerating innovation in these areas will help businesses build deeper, more unified experiences with consumers for the long haul.
Carat is the operating system that large merchants use to create innovative customer experiences and maximize efficiency. Based on years of experience developing commerce solutions for the world’s largest companies, here are eight omnichannel trends our team is preparing leading global brands to address in the years ahead.
Omnichannel retail trends
1. Payment choice is helping businesses meet consumer needs
Consumers prefer, and, in some cases, need, to pay in a myriad of ways ranging from tapping their digital wallets to paying with government benefits. From enabling payment options like buy-now-pay later (BNPL), PayPal, and pay-by-bank across channels, to allowing consumers to receive payouts instantly into the account of their choice, businesses increasingly view payments as an opportunity to maximize customer choice and create loyal experiences. As consumers navigate economic headwinds, offering more payment choice will provide much needed optionality and flexibility as they look to pay and be paid using options that best fit their financial needs.
Think of the gig economy worker who wants to be paid wages daily, the mother of four needing to use her EBT card to order a grocery delivery online, or the insurance claimant that needs funds quickly to remediate damage from a flooded basement. Each consumer has a unique payment preference driven by a real-life need. Brands will increasingly invest in payment choice to create experiences that drive loyalty as they enable people to navigate their financial lives.
2. Businesses are optimizing payment flows to protect against economic uncertainty
In addition to solving for consumer payment needs, companies are taking a hard look at where they can optimize their own costs and investments. This means introducing lower cost payment types, reducing manual processes with cloud-based solutions, and tapping into emerging technologies that boost authorization rates while reducing fraud and risk.
- For lower cost payments, flows like pay-by-bank are well positioned to gain momentum, following a broader trend toward real-time payments. By allowing customer bank accounts to be securely accessed as a direct payment option for everything from recurring subscription purchases to Internet of Things (IOT) payments, businesses will be able to reduce their cost of acceptance on a given transaction. That cost savings can benefit the brand’s bottom line and be re-invested to boost the customer experience and increase loyalty.
- Streamlining accounts receivable (AR) and accounts payable (AP) payments by closely integrating them with ERP systems will create efficiencies, enhance data protection and optimize collaboration with customers and partners, which improves cash flow.
- And finally, businesses will continue investing in fraud mitigation. During challenging economic times, history shows an increase in both first- and third-party fraud. Pairing artificial intelligence (AI) and machine learning (ML) with robust sets of payments data will be pivotal for businesses needing to secure their digital borders in the next year.
3. Businesses are migrating their payments data to the cloud
To unlock new value from their payments data, businesses will tap cloud solutions to achieve new levels of access, analysis, and efficiency. Enabling seamless and secure data transfer via the cloud will modernize how payment data flows to decision-makers and guide business decisions.
By leveraging data in real time across business functions, companies will innovate at speeds expected in today’s rapidly changing commerce landscape. With ready-to-query payments data, businesses will also enhance consumer experiences by integrating real-time payment data into the checkout process, strengthening loyalty and rewards programs, improving decisions for embedded financial services, and fortifying fraud mitigation.
Similarly, companies will need to take advantage of enhanced access to real-time data and use it to identify omnichannel retail trends that can lead to a competitive advantage.
4. Businesses are enhancing digital wallet experiences to deepen consumer loyalty
As competition heats up, retailers will invest in branded digital experiences, turning to their own wallets to create value by streamlining financial experiences and driving deeper customer relationships. One example is how brands can leverage their mobile applications to streamline payment experiences across multiple wallets within their digital environment. This functionality allows consumers to store and move funds between multiple financial purses, including loyalty, prepaid, financial, and health/wellness, within the retailer’s digital wallet. Doing so allows brands to create engaging experiences and offer more services within their digital ecosystem.
To illustrate, a merchant could provide cash back into a stored value account, a healthcare wallet can hold funds to be spent at a pharmacy, or a consumer-packaged goods company can provide rewards into a consumer’s digital wallet for purchasing their product at that retailer.
The ability for large retailers to extend functionality across multiple purses within their digital wallets will help brands improve customer experiences, drive loyalty and engagement, and deliver more value to the consumer.
5. Growing connection between physical stores & digital experience
Creating a seamless customer journey requires strengthening the connection between physical stores and digital experiences. Retailers continue integrating in-store technology with online platforms such as mobile apps and websites, providing customers easy access to personalized offers, product information, and store inventory. This integration ensures consistent shopping experiences across channels.
Augmented reality (AR) and virtual reality (VR) technologies are both being used to enhance in-store experiences, allowing customers to visualize products in their own homes or try clothing items virtually. These technologies bridge the gap between online and offline channels, offering immersive experiences that drive customer engagement and satisfaction.
Retailers also use data collected from in-store and online interactions to personalize customer experiences, tailoring promotions, product recommendations, and content based on individual preferences and behaviors. This personalization builds stronger customer relationships and encourages repeat business. By connecting physical and digital stores, businesses can provide a truly omnichannel shopping experience.
6. Businesses are taking advantage of social selling
The rise of social media has led to the growth of social selling, which is an essential channel for reaching and engaging with potential customers. Platforms such as Instagram, Facebook, and TikTok offer numerous opportunities for brands to showcase their products through influencer partnerships, shoppable posts, and engaging video content. As users spend more time on these platforms, businesses are increasingly leveraging social selling to increase brand awareness, build customer loyalty, and drive sales.
Incorporating social selling into their overall marketing strategies allows companies to tap into new audiences and stay ahead of the competition. By closely monitoring omnichannel marketing trends across social media and continuously adapting their approach, businesses can create content that resonates with their target audience, resulting in higher engagement and conversion rates. Additionally, social selling enables businesses to gather valuable customer feedback and insights, which can be used to improve their products, services, and messaging. Overall, a well-executed social selling strategy can significantly impact a company's growth and success in the current digital landscape.
7. Optimizing your supply chain
Efficient supply chains are crucial in today's competitive landscape, enabling businesses to reduce costs, mitigate risks, and ensure customer satisfaction. Companies are investing in advanced technologies AI and ML to streamline processes, improve demand forecasting, and enhance inventory management. These technologies facilitate real-time decision-making, automate manual tasks, and allow businesses to adapt quickly to changing market conditions.
By prioritizing supply chain optimization, businesses can minimize disruptions and maintain high levels of customer satisfaction, driving long-term growth. A well-optimized supply chain also contributes to a company's ability to respond effectively to unforeseen challenges and capitalize on emerging opportunities.
8. Data collection & analysis
Collecting and analyzing data is essential for making informed decisions and staying competitive. Gathering data from various sources, such as customer interactions, social media, and market research, provides valuable insights into consumer preferences and areas for improvement. Advanced analytics tools, including AI and ML, enable businesses to process large amounts of data quickly and efficiently to identify patterns, make predictions, and develop actionable strategies.
By leveraging data-driven insights, businesses can optimize their operations and drive innovation. Data analysis also plays a crucial role in personalizing marketing campaigns and the larger shopping experience. Furthermore, businesses can use real-time data to monitor and respond to user feedback, ensuring they continually meet evolving customer needs.
Staying abreast of e-commerce omnichannel trends enables businesses to better adapt their data collection and analysis strategies, ensuring they stay ahead of the competition and cater to evolving customer needs. By embracing a data-driven approach, companies can make better decisions and ensure long-term success.
Carat experts know how to generate positive ROI
Gazing into a crystal ball to predict what will happen moving forward will not offer all the answers merchants need to thrive in the coming years. But merchants who invest in payment choice and optimize payment processes will be best positioned to accelerate innovation and build better experiences for their customers. And partners like Carat are here to help these businesses scale and secure ROI that has a positive and tangible impact on the bottom line.
While there may be some ups and downs in 2023 and beyond, we see a bright future for companies interested in long-term solutions that focus on creating new and differentiating customer experiences that encourage loyalty and drive growth.
To learn more about emerging omnichannel and how our commerce solutions can help you navigate these changes, contact a Carat expert today.
