The world is turning the page and rewriting retail. After a tumultuous few years, the industry is moving from recovery mode to reformation with exciting changes and digital innovations. Despite talks on the revival of the high street, changing consumer behaviors have shifted from offline to online, and have become more channel agnostic. Retailers are now leveraging Artificial Intelligence (AI) and other cutting-edge technologies to streamline operations and improve efficiencies. As we progress into the year, these are the top trends to be aware of to stay ahead of the competition.
1. Generative AI to scale businesses
AI-powered technology has been making waves for quite some time now. From artificial influencers to deep fakes, OpenAI’s ChatGPT platform is driving attention to the potential of generative AI. This form of deep machine learning combines natural language processing to compose ‘original’ content that is drawn from large datasets and user interaction. Used across a variety of fields, generative AI is being used by retailers for a number of applications from copywriting and content production to product renderings and even personalized recommendations. The technology has helped automate many manual processes, completing tasks where talent is needed and lacking – although debatable.
One of the most practical use cases is in generating content and translation. As retailers expand to new markets in the rise of cross-border e-commerce, brands need to localize every aspect of their business, especially their storefront and content. Consumers crave a personalized experience, where three-quarters of shoppers would prefer to purchase from websites in their native language, and 60% would rarely or never buy from English-only websites. Content, especially in the form of video, is also another important medium as algorithms on social media platforms and consumer preferences are prioritizing video content.
Eugen von Rubinberg, co-founder of AI translation company Vidby highlights, “Recent advances in AI-powered language translation enable brands to communicate effectively with more audiences without having to allocate additional resources. This is especially important in regions like Asia, where language diversity is high and English proficiency is low”. The company’s solutions are capable of translating videos into countless different languages, even taking into account linguistic details such as accents to produce highly accurate results, and has successfully teamed up with Harvard University to translate and synchronize medical training videos.
Generative AI technology will become a disruptive yet essential tool for businesses in retail. Not only will it help automate tasks and streamline processes efficiently, but it can also design a better digital experience for customers, thus improving user experience and uplifting conversions.
2. Online advertising will become more efficient
Rising ad costs and competitive clutter have led many marketers to abandon social media and other digital channels. The efficiency of ads are measured by various factors, including Cost Per Click to identify intent and interest. However, the costs of clicks have inflated due to competition of ad space, compounded with other industry challenges. Customer acquisition costs have thus risen significantly in recent years, as research revealed brands lose an average of $29 per new customer acquired. One of the biggest threats to digital advertising is fake activity and engagement metrics for financial gain, of which $17 million is lost to ad fraud daily in Asia.
While it is hard to detect using manual methods, AI and blockchain are being leveraged to prevent such fraudulent activities. AI can be used to analyze patterns and spot anomalies, such as suspicious or fake clicks originating from bots, in real-time – which companies like VeraViews are now using to identify manipulated impressions or views on video advertising. The company’s blockchain proof-of-view technology allows advertisers and brands to verify the audience of their ads and avoid paying for bot views – such as the case of having recently deployed their technology for online newspaper The Times of Israel, protecting the publisher’s video inventory against online advertising fraud.
As the internet economy continues to become a lucrative target of bots, brands within Asia are ramping up their efforts by adopting technology like such to protect their costs and making use of reliable analytics to craft strategic decisions. New ad tech solutions will undoubtedly change the way retailers choose their publishing platforms and how they serve their ads in 2023.
3. Cutting-edge payment methods
The continuous growth of e-commerce has been accompanied by the increasing number of payment options offered on the market. Shifting from the Buy Now, Pay Later trend, cryptocurrency payments will continue to become widely adopted by retailers both in the online and offline space. “The new cryptocurrency wealth has increased the affluence of young, tech-savvy people, with brands looking to attract this new group of affluent consumers – and it’s no surprise, as 52% of investors in Asia have invested in cryptocurrencies,” says Dr Praveen Buddiga, co-founder of Terapay, a payment processing gateway that enables both fiat and cryptocurrency payments.
Traversing from shopping in the metaverse, cryptocurrency will also be widely used in physical retail settings. Today, more than 18,000 companies accept cryptocurrencies as payment for their products or services. Buddiga adds, “While traditional providers such as PayPal
Two-thirds of Southeast Asians are interested in paying for goods and services with cryptocurrency, thus retailers will need to optimize payment experiences for the new generation of shoppers. While Singapore retailers are at the forefront of this innovative payment landscape, Hong Kong is also an upcoming market as it aims to become the next leading digital asset capital in Asia. This is a trend that is likely to gain significance amidst the current recession and raging inflation rates worldwide as Buddiga further emphasizes, “In a world where not only cross-border but also cross-continent payments are part of many people’s daily lives, cryptocurrency payments will only grow in importance.”
4. SMS marketing is back
After all the hype with AI chatbots, studies have revealed that consumers are now seeking more personal interactions with brands, a human touch behind the digital screen. Although it might sound like a deja-vu, SMS marketing is bound to make a glorious return this year. Retailers are tapping into this vintage technology to broadcast to the masses, communicating special offers and promotions and in turn driving loyal followers and an increase in traffic.
SMS marketing makes sense after all – it’s a noisy and cluttered platform out there and when consumers are hiding behind fake emails, it turns out they welcome text messages on their phones. Phone numbers nowadays are considered by many marketers to be the most valuable digital data point because people rarely change them, and thanks to reduced SMS traffic, advertisements can also stick out more easily. “We frequently see a significant spike in revenue & conversions when running SMS along PPC (pay-per-click) campaigns. Email is a great addition, no question about it, but with 10% open rates compared to SMS open rates of over 90%, it’s easy to fall in love with this channel,” says Ivan Janku, an expert in online advertising and CEO of Digital Rocket.
Consumers in Asia are generally satisfied with brand communication through mobile, making it an effective engagement channel to form a direct relationship with their consumers. SMS marketing is set to become an integral part of retailers’ omnichannel marketing strategy and this underrated medium will become the next powerful customer engagement tool.
5. Growing through B2B e-commerce
Retailers are expanding their revenue through business-to-business (B2B) e-commerce channels – a trend that has erupted from Covid-19 times as brands digitize their B2B operations to keep businesses afloat. And as the world begins to face a recession which could hinder consumer spending, retailers are jumping onto the B2B wagon instead. “The solution for many retailers could be to create or further promote existing B2B e-commerce efforts,” advises Christian Schroeder, founder of the early-stage investment firm 10x Value Partners.
During the dormancy of trade shows and supplier visits, 90% of B2B businesses have transitioned from traditional and manual tasks to digitizing the sourcing and procurement process. Going online has enhanced buyers’ purchasing decisions with greater visibility of products and transparency in pricing and supplier availability. Further research reveals that two-thirds of the current B2B landscape are made up of buyers between the ages of 18 and 40, meaning millennials and Gen Z have become the dominant players on B2B buying boards. “These buyers have grown up in a digital world, expect a state-of-the-art customer experience, and may need well-crafted and targeted digital marketing campaigns before making a purchase decision,” Schroeder adds.
This trend specially caters to the SME crowd and will continue to develop in emerging Asian economies where technology is maturing and internet penetration is rising. Asia SME players are expected to power the B2B scene, projected to reach $13 trillion, making up for 80% of Asia’s retail spend. Asia will present more exciting B2B e-commerce opportunities to the rest of the world as the region reignites its manufacturing and export sector.