EXCLUSIVE: Q&A with Lindsey Mazza, global retail lead, Capgemini
Retailers can overcome consumer spending issues with technology and strategy.
Chain Store Age recently spoke with Lindsey Mazza, global retail lead of global business and technology transformation partner Capgemini, about how retailers can build customer relationships and loyalty, as well as what she sees as the important technology trends in the coming year.
What trends do you see in consumer spending?
We are still seeing a lot of challenges in consumer spending. With the consumer confidence index lower and with the debt that's rising, we're seeing that there will continue to be some challenges in spending.
Even if this situation changes based on events such as rate cuts, those things take time to come into effect. Capgemini still sees potential consumer hardship into the first half of 2025 before we see some returns later next year.
But I still expect there to be a rise in sales growth for the 2024 holiday season. There's a difference between what consumers say they're going to do and what they then actually do. We expect to see increased spending for holiday this year, but that is going to be largely based on consumer emotions that come with the holiday season.
How can retailers focus more on customer relationships and loyalty?
Fortunately, enablers to optimize the customer experience exist right now. We have things like computer vision to see where people are shopping.
We have robotics to be able to support fulfillment faster to get things to the consumer when they want them; we have data with AI on top of the algorithms that evaluate the data to help enable more personalization, not just in pricing or in promotions, but in how retailers interact and engage with consumers themselves.
This is all leading to the idea that retailers don't just make customers. Retailers have to make fans, because fans talk about your brand online or in person with their friends. It's what creates that lifetime value of the customer which is so precious to most retailers.
What benefits do retailers obtain from high levels of customer loyalty?
The more that you create loyalty that is a true fandom, such as a membership program, the more success you're going to have in margin, because you're going to sell those items before they've sat on the shelf for a long time.
You’ll also do better in revenue, because you'll get more sales and more incentive to customers, and then be able to really better forecast inventory, because the better you know the consumer, the more access to knowledge about whether or not they're going to buy or their propensity to buy in a particular setting for a particular product based on the attributes of that product.
How should retailers prepare for the holiday sales period – is ‘Cyber Week’ still the peak?
Retailers are not so hyper-focused on just Black Friday and Cyber Monday any longer. The holidays start in September. The best deals of the year are going on right now in a lot of those retailers where you're seeing major discounting.
[READ MORE: E-commerce lessons from Cyber Week 2023]
So, we are going to see some escalation of available inventory earlier in the season with the deals now that drive more loyalty to those brands for the remainder of the season, so customers complete the rest of their holiday shopping there.
What are the most important retail technology trends for 2025?
We're going to see technology-related activity in three areas: taking costs out of the business, unlocking channel growth, and consumer demand for sustainability.
Cost of goods sold is an extremely important factor because it impacts consumer basket sizes. The cost of goods has risen because of shipping and transportation costs, product availability, and lack of raw material availability in areas that are under geopolitical conflict, and the labor that it takes in order to manufacture costs more.
Rising costs are contributing to the first trend, and that is taking costs out of the business. The most relevant new technologies are things like in-store robots that are embedded with computer vision and AI that can check planogram accuracy, promotions, and price accuracy to the shelf. In real time they can determine if the store has enough stock.
We also have robotics for micro-fulfillment centers and warehouses, which are also major supporters of taking costs out of the business and reducing the time to reach the consumer with the items they want, which is becoming increasingly important.
To unlock channel growth, retailers need to create the consumer experience and based on the recognition that shopping is now unified and commerce is connected, and there's no such thing as 'e-commerce' or 'in-store.'
The average consumer shops in 5.3 channels. That means the website, the mobile site, the app itself, a social channel, a metaverse environment. When I look at that, I say the engagement with consumers matters and it's about creating revenue growth. It’s really the supply chain technologies that yield the cost out to the customer engagement technologies that are enabling revenue growth across channels.
Finally, we see high consumer demand for sustainable and purpose-driven products, even though there is a disparity between consumer intent and the actual purchases that people make. But we do see the demand to at least search and discover based on those factors.
It becomes about how you craft the attributes by which consumers can shop and being able to connect with customer signals when they want particular things based on sustainable criteria.
We used to leverage sales history to forecast future demand. The future is going to involve using information about consumer themselves, such as interest in sustainable and purpose-driven products and brands, to forecast demand.
