How Emerging Tech Can Drive Profitable E-commerce Growth in 2024

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Over the past decade, growth at all costs has been the norm for many businesses, but it no longer helps company margins. 

With rising costs and ever-changing consumer demands that can constrain a retailer’s bottom line, focusing on profitable growth is key. Business leaders must remain pragmatic while investing in the right solutions and innovation to achieve results. 

Today, consumers display less brand loyalty and instead focus on convenience by shopping across channels that provide fast shipping, competitive costs, and seamless experiences. According to data from McKinsey, nearly half of US consumers are shopping fluidly among channels, including traditionally store-based retail segments like grocery, where 40% buy at least some groceries online. 

Retailers are increasingly embracing new technologies, including artificial intelligence (AI), that can increase transparency and efficiency throughout the value chain. A new report by Rithum, conducted by Coresight Research, “Retail 2024: US E-Commerce Technology Trends,” uncovered the major technology trends that will continue to reshape online retail in the years ahead. 

With these insights, retailers can leverage AI and other emerging technologies to drive e-commerce growth, from enhancing supply chain models to advancing customer engagement.

Here are five ways emerging technologies can help retailers secure a competitive edge and fuel profitable growth through e-commerce:

Driving Smart Inventory to Enhance Market Presence

As retailers adapt to the evolving online marketplace, a unified system that can automate long-tail processes like inventory management is key to efficient integration. With 77% of brand decision-makers acknowledging that online marketplaces are outpacing traditional wholesale business growth, the push toward digital integration is imperative. 

AI-driven predictive analytics algorithms have revolutionized inventory management, allowing retailers to reduce out-of-stocks and enhance efficiency through better demand forecasting. This technology improves supply chain transparency and lowers risks, as it almost guarantees end-to-end traceability. Retailers who build adaptable and efficient supply chains can quickly adjust to changes in demand, standing out from the competition and staying ahead in the market. 

Overcoming Market Expansion Challenges

Expanding brand visibility through platforms like Amazon or specialized marketplaces is critical to today’s retail strategy. However, many retailers face significant challenges due to resource constraints and the highly manual nature of managing online marketplaces. 

For example, an office equipment brand experienced extensive manual processes for uploading its product catalogs, monitoring sales, and managing its seasonal inventory. The brand’s ability to expand to additional marketplaces was limited due to the sheer manual effort required to manage each channel. To remedy these pain points, the brand partnered with a commerce network partner to supplement the staffing and expertise needed to expand its digital selling channels.

Working with a partner to manage new market channels allows retailers to optimize their margins and ensure their products meet customer demand wherever they choose to shop. 

Elevating the Customer Experience with Automation and Immersive Realities 

Hyper-personalization has become a standard practice, pushing retailers to further understand their shoppers. AI-powered customer data platforms (CDPs) lie at the heart of this approach, enabling retailers to automate the collection and analysis of extensive customer data. Automations simplifies the task of personalized shopping and streamlines new sales channel expansion to broaden brand reach, tap new customers, and boost sales opportunities. 

Additionally, data-driven marketing has become indispensable for retailers in establishing genuine connections with shoppers, with AI and ML revealing actionable data about shopper behaviors. In turn, retailers can increase the effectiveness of their marketing strategies while strengthening their media offering. 

Immersive technologies and features available on marketplaces such as augmented reality (AR) or virtual reality (VR) can create engaging consumer shopping experiences. Features such as virtual try-on tools or other 3D visual tools could help increase consumer traffic and bridge the gap between the online and in-store shopping experiences.

Unlocking Data-Driven Pricing and Dynamic Revenue Streams

To maintain relevance and to be competitive, retailers must fully leverage advanced technologies for pricing. As AI continues to evolve, deep learning algorithms will help retailers dynamically adapt their prices to consumer behavior and market conditions in real time to optimize profitability. To boost profitability, some retailers are using personalized pricing practices that allow customization in markdowns and tailor prices to an individual based on purchase history and personal choices.

While some strategies can help retailers maximize revenues from their existing products, finding newer revenue streams in functions such as retail media can be a huge margin boost. 

According to insight from Boston Consulting Group, the retail media market is expected to grow by 25% annually, reaching $100 billion by 2026. This high-margin growth allows retailers to bolster performance and gain a competitive edge. Retailers looking to be highly competitive in their retail media offering can implement a unified platform that integrates AI for predictive analytics, coupled with ad delivery capabilities for creating contextual and precise content. 

Implementing Sustainability Practices for Smarter Returns

Sustainability is a priority at all levels of the business, including delivery and returns. Retailers are investing in technological solutions that optimize return processing through AI and other technologies to reduce the amount of waste generated in the process. 

Access to real-time inventory allows retailers to ship smarter and more sustainably. By implementing third-party logistics (3PL) solutions, retailers can accurately pinpoint the location of inventory, expedite deliveries, and reduce transit times and carbon emissions. 

For example, a leading fashion retailer addressed inefficient cross-country shipping practices by investing 3PL insights into their logistic operations. The team discovered that over 50% of their dropship shipments took unnecessarily long routes. 

Through collaboration with its commerce network partner, they dramatically streamlined routes and identified other supply chain inefficiencies, leading to substantial cost savings and a noticeable decrease in carbon footprint. 

Retailers have a multitude of opportunities to use innovation and technology to propel e-commerce growth and profitability in 2024. Retailers can position themselves at the forefront of this industry disruption by embracing technologies that enhance automation, organization, creativity, and efficiency along the entire value chain. 

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2024-04-12 15:02:58

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