Automate the shopping experience to attract the cautious consumer

Regarding retail, two essential elements make or break the business: the consumer’s experience and adaptability to the consumer’s forever-changing preferences. Keeping up with global economic aspects while creating a seamless and memorable customer experience to thrive in this competitive market is a real challenge. Luckily, a valuable set of software tools exist, bringing light and clarity to retailers. Those tools are under the umbrella called retail automation.

Since the pandemic stifled the global economy, there has been a clear trend toward changing consumer behavior. The retail landscape is challenging: we deal with record inflation levels, supply chain issues, labor shortages, international conflicts, climate change, and a potential recession. So, what does any successful businessperson see in a difficult situation? An opportunity for growth. In the face of adversity, it’s time for the most skilled problem solvers to demonstrate their abilities.

What is the cautious consumer’s outlook?

Consumer behavior is a factor that should be well understood to thrive in the dynamic landscape of retail business. The economic climate of the past few years has added uncertainty and distrust in the economy. Cautious consumers continue to show a different approach to buying.

The US cautious consumer outlook

According to McKinsey’s latest report on the US consumer, Americans have a growing sense of optimism. The data reveals that 36% of US consumers anticipate a swift economic recovery, a significant increase from 33% in March 2023 and 26% in June 2022. However, it is worth noting that a notable segment of the population holds a more cautious outlook, with expectations of a recession and a lengthier economic rebound surpassing levels observed during the pandemic’s peak.

The European cautious consumer outlook

The Eurozone holds a different outlook. The European Commission’s Business and consumer survey states that the Economic Sentiment Indicator (ESI) has declined in the European Union (EU) and the euro area. The index used by Eurostat differs from the one used for the US consumer. To better understand, it is helpful to use a comparison. The lowest point of ESI ever recorded was in April 2020, during the height of the pandemic, at 58.8 (lower than the effects of the 2008 financial crisis reaching an ESI of 68.5 in April 2009). As of May 2023, the ESI has reached 95.2, indicating a significant improvement, yet still below pre-pandemic levels.

Understanding the cautious consumer

This data suggests a mix of optimism and caution among consumers. While adapting to the consumer’s changing preferences and economic confidence is crucial, this uncertain economic climate can be navigated with a set of strategies based on data and automation.

PwC’s February 2023 Global Consumer Insights Pulse Survey shows that 96% of surveyed consumers intend to reduce costs through cost-saving behaviors. It’s important to note that consumers still wish to consume and make purchases despite their cautious approach, but following 2020, they demand better online experiences. Retailers must focus on enhancing the online shopping experience to meet their expectations. The E-commerce experience should be a seamless ecosystem inviting users to explore. It should be tailored to their needs and anticipate their wants.

Approaching the cautious consumer

McKinsey found that most consumers across the United States still plan to engage in selective indulgence. Their study shows that consumers will selectively indulge in food, travel, and apparel categories. They plan to spend more in specific categories and save in others.
Retailers should invest in user-friendly websites, intuitive navigation, and personalized recommendations to make the online shopping journey more engaging and enjoyable for customers. By leveraging technology and data-driven insights, retailers can tailor their offerings to align with consumer preferences, creating a more personalized and satisfying online experience.
To navigate the uncertainties of the current economic climate, retailers should base their strategies on data and insights. By closely monitoring consumer behavior, market trends, and economic indicators, retailers can make informed decisions about product assortment, pricing, promotions, and inventory management.

Berg and Retail Automation

With over 30 years of experience in developing custom software solutions for clients, including global companies in the retail industry, Berg Software is equipped to assist businesses in thriving amidst the competitive and evolving retail landscape. Our mission is to provide our clients with the tools and strategies they need to excel in this changing industry.

The best tool for challenging times in retail is automation. If you are looking for a partner with the expertise and who has worked before with the high demands from the retail industry that will make your process seamless, reach out to us.