Retailers are making strategic investments as they gear up for the new financial year, particularly in cybersecurity, personalization, and artificial intelligence (AI). The 2024 financial outlook presents both challenges and opportunities, with consumer spending expected to recover and real retail turnover projected to increase by 2.3% in 2025, according to Deloitte Access Economics.
Cybersecurity has emerged as a top priority for retailers. Research from SHOPLINE shows that 69% of retailers plan to boost their cybersecurity investments this year. This is crucial as consumers increasingly seek assurance that their data is securely handled. Trust is essential; breaches can severely impact customer loyalty and acquisition. Notably, 89% of larger retailers with over $100 million in Gross Value Merchandising are prioritizing cyber defenses, whereas only 38% of smaller retailers are doing the same. This gap poses a significant risk, considering that cyberattacks do not discriminate based on size.
Personalization is equally vital, with over two-thirds of retailers poised to enhance their efforts. Tailoring experiences to individual customer preferences can significantly enhance engagement. For example, utilizing data to differentiate marketing strategies for a Gen Z gamer versus a retiree jazz enthusiast maximizes relevance and potential sales. Despite its importance, only 53% of small retailers are increasing their investment in personalization technology, often hindered by costs.
AI is transforming the retail landscape as well. More than half of retailers (55%) plan to invest more in AI technologies, focusing on enhancing customer interactions and streamlining operations. Medium-sized retailers, in particular, are leading the charge, with 78% planning to prioritize AI investments. This technology proves invaluable in areas such as inventory management and customer support, ultimately driving efficiency and revenue.
Other areas retailers are targeting include data management and business analytics, which are essential for informed decision-making and strategic growth. The combined focus on cybersecurity, personalization, and AI positions retailers to potentially shift their strategy from merely surviving to thriving in a competitive marketplace. Investing in technology is no longer optional; it is a key driver of sustainable growth in the retail sector.