Retailers' Imperative to Modernizing Consumer Experiences Amidst Economic Challenges 

By Rajnish Sinha, Global Head of Retail & E-commerce, Genpact

In 2024, retailers look to modernize consumer experience amid less discretionary spending.

2023 has been the year where we’ve fully come out of the pandemic, and as a result, consumer behavior has changed permanently. Many consumers are fully online and never going back to in-store as their preferred method. Thus, the need for segmentation, personalization, and a coherent strategy for omni channel has never been more important for retailers because consumers are beginning to expect seamless experiences from online to offline. Retailers should respond by making sure brick-and-mortar stores experiences and online experiences are connected. To achieve this, retailers must continue to modernize their tech stack and back-end and front-end systems despite ever-increasing cost pressures.

This year has also been about the idea of the “stretched consumer” and “value-driven search.” Inflation and higher interest rates combined with stimulus aid going away, has led to slower growth in retail compared to previous years. Shareholder pressure has created a heightened focus on cost-out initiatives, while moving full-steam ahead on modernization agendas. As a result, we are seeing more chief merchants and CMOs looking to optimize and transform operations, bringing in automation and new technology so that merchants spend time on the value-added work and less on data gathering, manual tasks etc.

In view of all the aforementioned pressures (modernizing the consumer experience and erosion of discretionary spending) a potential remedy for retailers is to look to external partners to manage key elements of their supply chain function. Doing so will enable businesses to gain access to new technologies, and more importantly, dedicated talent, that will allow them to focus on running their core operations while leaping headfirst into digital transformation initiatives that have suffered under-investment for many years. Companies should look for partners who can make confident technology investment decisions at speed – something you simply can’t do in today’s economy with internal constraints and resources.

The consumer experience will remain a top priority because competition for their dollars will be fiercer with less discretionary spending. To do that, retailers should look for ways to simplify supply chain operations to give them more time for strategic planning and marketing to always keep the consumer top of mind.