Revolutionizing Retail And The Future Of Commerce – Who Would’ve Thought?, by du’s Layal Hassi
Who would’ve thought just less than 7 years ago that we would be discussing the future of retail? At that time, even though it seemed just like yesterday, life was simpler, especially when digital media was just display and social. Retail on the other hand was this whole independent entity that meant physical transactions and these two were still not intertwined.
Fast forward and we are now witnessing a significant transformation, driven by advancements in technology and ever-changing consumer preferences. One of the most exciting developments in this transformation is the rise of retail media and contextual commerce, revolutionizing the way businesses and brands interact with customers.
A recent BCG report suggests that when market retailers monetize their customer data and utilize it to strengthen their communications approach, the market is expected to grow by 25% year on year, thus accounting for over 25% of total digital media spending by 2026.
Contextual commerce marketing takes personalization to the next level. Instead of merely targeting consumers based on their past behavior, interest, demographics, it leverages real-time data and context to deliver highly relevant and timely offers. This approach aligns perfectly with the modern consumer’s desire for a seamless and personalized shopping experience.
Although the first party data discussion remains reliable and safe, it may not be sufficient to scale campaigns, whilst third-party data offers scalability and volume, it may lack the right insights to drive results.
And so in the event of going in ever ending circles between first party and third party data, second party data may remain the right balance between the two, besides being attributable, and it offers an opportunity to target customers in the right moment at the right time, hence delivering higher ROAS.
When it comes to retailers specifically, retail media offers an exciting highly profitable margin of revenue, allowing the brand to manage their data in an advanced manner and hence creating an omni channel marketing approach. Needless to say that retailers with this approach, will be able to yield stronger behavioral insights on the long run, hence being able to strengthen their consumer offering and centralize it even further. The one size fits all product offering approach is becoming truly outdated and it is time for all brands to step it up.
Here are a few key takeaways on how the future of retail and commerce will become valuable for brands, although concerns will continue to rise on the usage of first party data:
- Data-Driven Insights: Retailers will increasingly harness the power of data analytics and AI to gain deeper insights into customer behavior. This will enable them to understand customer preferences in real time, allowing for hyper-targeted advertising and offers.
- Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies are already integrated into the shopping experience. Customers will be able to try on clothing virtually and we have seen tons of examples in the MENA region on how retail brands capitalized on the power of AR and VR, hence visualizing furniture in their homes, or even sample products before purchase, all within a contextually relevant digital environment.
- Voice Commerce: With the explosion of voice-activated devices like smart speakers and virtual assistants, voice commerce will become more prevalent. Contextual commerce marketing will adapt to this trend, providing voice-activated shopping experiences tailored to individual preferences.
- Personalized Recommendations: Retailers will continue to refine their recommendation algorithms, delivering product suggestions that align with a customer’s current context and immediate needs. This can include location-based recommendations, weather-based suggestions, and more.
- Seamless Omnichannel Integration: Contextual commerce marketing will bridge the gap between online and offline shopping. Customers will enjoy a consistent and personalized experience whether they shop in-store, online, or via mobile apps.
- Sustainability and Ethical Considerations: Consumers are increasingly conscious of sustainability and ethical practices. Contextual commerce marketing will incorporate these values, providing information on product origins, ethical practices, and sustainable options to align with consumer values.
- Privacy Concerns: As personalization becomes more sophisticated, privacy concerns will persist. Retailers will need to strike a delicate balance between data-driven personalization and respecting customer privacy through transparent data practices.
The future of retail media and contextual commerce marketing promises a shopping experience that is more personalized, convenient, and engaging than ever before. As technology continues to evolve and consumer expectations rise, retailers must adapt and embrace these trends to stay competitive. By harnessing the power of data, emerging technologies, and a customer-centric approach, businesses can navigate this evolving landscape and thrive in the world of contextual commerce.