Current retail trends and the future of holiday shopping

Holiday spending is expected to reach record levels during November and December and will grow between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion, according to the National Retail Foundation (NRF). Online and other non-store sales, which are included in the total, are expected to increase between 7% and 9% to a total of between $273.7 billion and $278.8 billion. That figure is up from $255.8 billion last year.

“Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates,” NRF Chief Economist Jack Kleinhenz said. With the increase in consumer demand, research shows that today’s consumers expect more from retailers. Customers now expect personalized interactions — 66% expect companies to understand their unique needs and expectations, and the same Forbes article notes that 52% expect all offers to be personalized.

Twilio reports that more than half of consumers indicate they will become repeat buyers after a personalized experience, and 62% of business leaders cite improved customer retention as a benefit of personalization efforts.

Personalization plays a great role in retail success

According to a Salesforce report, 88% of shoppers say that the experience a brand delivers is as important as its products — and this represents an enormous opportunity for retailers.  

The expectation that highly personal and frictionless interactions drive increased sales has made investing in infrastructure that supports personalization a focus for retailers. The return on such infrastructure investments is measurable as growing retail companies report driving an incremental 40% of their revenue from personalization. These efforts include, but are not limited to, tailored product and service recommendations, special offers and incentives that can drive engagement and grow sales.

Retailers have access to what amounts to a treasure trove of customer data. Those that are able to interpret that data in a meaningful, cost-effective manner, will be rewarded with actionable insights into customer behavior, preferences, and pain points. Leading retailers can apply those data insights in targeted marketing campaigns, highly personalized products and services suggestions and unique shopping journeys that build brand equity, customer engagement and loyalty. 

Connectivity is king

To take advantage of the personalization potential by utilizing customer data, retailers need fast, secure and direct connections to public clouds and internal data centers where that data resides. Capturing and analyzing the mountains of data generated by customer actions and operations to create personalized experiences that meet buyer expectations requires a modernized digital infrastructure. Retailers are spending their IT dollars on adopting new solutions to help seize personalization opportunities, as well as implementing cybersecurity protocols and cloud infrastructure that can securely improve the customer experience and optimize business operations.

Connected devices depend on steady, fast internet connectivity to function properly. Given how intertwined these devices are with today's retail operations, things can grind to a halt when connectivity is spotty, or completely down. When moving retailers’ data to the cloud, connectivity, and cybersecurity are both essential, as IT teams must rely on these attributes to keep applications and services secure during migration.

Increased personalization is essential to future retail success

Retailers should act now to capitalize on the opportunity presented by the increased availability of pertinent data. Personalization efforts should be focused on analyzing customer data with AI and machine learning (ML) to produce actionable information. These insights can help retailers deliver the tailored product and service recommendations that increase engagement and drive sales growth.

Retailers can progress towards ensuring a seamless shopping experience whether customers are online, in-store, or using a mobile app, resulting in increased customer loyalty and recurring business. To deliver a truly integrated omnichannel experience, retailers must extend personalization efforts into every channel where they engage with customers — which requires a cloud-centric approach to maximize efficacy.

Challenges inherent in evolving retail trends

For retailers, the appeal of adopting the Internet of Things (IoT) is about bringing digital and physical environments together. Potential applications include sensors and cameras that collect in-store data to enrich customer, store and distribution analytics. Decisions based on insights in this type of data can increase efficiency and improve the supply chain. This data can also indicate customer shopping patterns, which can help optimize store layouts, tighten inventory management and enhance the customer experience.

At the same time, IT teams must balance bandwidth needs between physical locations, data centers and the cloud. They also need to reduce network and administrative complexity — without impacting performance or uptime. Meeting these requirements requires scalable, high-performance network connections with intelligently automated traffic steering and delivery. This means moving toward a modern network infrastructure that is reliable and secure.

Delivering personalization requires data. Although many consumers appreciate the convenience that personalization can offer, they are also skeptical about how their data is used and stored. A strong defense against cyberthreats can help ease these customer concerns. To ensure a consistent, positive user experience, you must protect your internet connectivity and safeguard your systems.

As retailers embrace omnichannel personalization and adopt the technology to collect and secure customer data at scale, they face challenges and competitive pressures. That makes it critical to select an experienced partner for your investment in network infrastructure.

How Spectrum Enterprise can help

Spectrum Enterprise works with retailers nationwide to help secure their networks and make them faster, more reliable and easier to manage. We can help you realize your retail future with the connectivity and service-level agreements that meet your specific needs.

Our nationwide reach, advanced technology and deep network engineering expertise enable us to tailor solutions for your connectivity, cloud adoption and security needs so you can focus on providing great experiences for your customers.

Learn more about personalization and the future of retail.