Personalisation is both the biggest driver and the biggest challenge for retailers today, according to research from retail technology platform Red Ant.
The Retail Tech Investment Survey found that personalised services are the key driver for retail tech investment for 68% of retailers this year. However, at the same time, personalising the customer experience is the biggest challenge for 30% of brands, followed by siloed data (23%).
“While personalised services are clearly a major focus for successful customer engagement, the study reveals that retailers are taking on greater responsibilities to exceed customers’ expectations while facing the same budgetary pressures,” said Sarah Friswell, Red Ant CEO.
“Much more is going on within retail businesses that influences the success of technology in a retail context, for instance those citing company culture, compliance and lack of strategy as key barriers to success. It’s easy to get excited about new tech, but taking the right steps to adopt, including first getting data in order as part of an omnichannel set-up, is essential.”
Positively, for the retail industry, 20% of retailers have seen their retail budgets increase in 2023, while 77% of retail tech budgets have stayed the same as 2022.
Much of this year’s retail investment is going toward technologies like artificial intelligence (AI), which 72% of retailers have already adopted, with a quarter (24%) of these retailers having ambitions to increase adoption. However, the biggest barriers to AI adoption are strategy (26%), costs (23%), and regulations (18%).
Furthermore, though AI can be expected to form more of a basis across whole businesses, 32% of brands don’t know enough about the potential of AI models for supporting store associates, but 14% believe tools, such as ChatGPT, could help store associates do their jobs. Nonetheless, 50% agree that AI cannot replace human touch.
The issue with this focus on tech investment and innovation to help drive personalisation lies in only 62% of retailers claiming they are able to provide a single customer view across all channels, despite this being essential for omnichannel retail success.
“Retailers must make sure they have their omnichannel strategy nailed, otherwise they risk not making effective use of any AI strategies and investments. They’re right to still prioritise data integration and to ensure seamless and frictionless customer journeys and experiences. Once this is in place, that’s the time to invest in AI, ChatGPT tools and other new technologies that can support store associates and give meaningful business insight based on customer data,” said Friswell.
