Five customer experience trends from NRF 2023 that retailers need to know

The retail world has changed dramatically over the past few years, as evidenced at the National Retail Federation’s Big Show in New York City. In January, thousands of retail change-makers from around the world came together to talk about the latest trends and innovations. Zendesk was thrilled to attend and participate, and to glean this key takeaway – from the Metaverse to physical retail, customer experience is king.

Here are a few standout takeaways from the show:

1. Expansion of AI

Retailers are under enormous pressure to keep up with customer expectations while managing smaller staff and supply chain struggles. One of the hottest topics of conversation at NRF was the expansion of AI, and for good reason. Retailers are turning to AI for churn prediction and product recommendations based on individual preferences. Some retailers are using AI to fuel their marketing efforts — with analytics that predict the best offers and discounts to give customers based on their previous behaviors.

Adrian McDermott, our Chief Technology Officer at Zendesk, summed it up in a live interview from NRF:

Consumers just want low friction experiences when they want to have a conversation.

In support environments, AI can deliver better customer experiences by collecting the information your team needs up front and offering self-service suggestions. If the customer can’t resolve the issue on their own, AI provides all of that context to your team so they can better help your customers.

2. ‘Phygital’ retail

Customers leapt to digital commerce platforms during the pandemic. Now, people are shopping in traditional bricks-and-mortar stores again — but they want to keep the perks from their digital experiences, too. That’s what gives rise to the 'phygital' retail trend.

Phygital is an immediate, interactive, and immersive shopping experience combining the best of in-store and online shopping. At NRF, we heard a lot about digital-native brands moving into physical spaces and vice versa to meet customers where they are. This new experience brings together the best of both worlds.

For example, customers can browse online, add items to their carts, then scan and add items to their cart from the store. This creates a seamless shopping journey across channels. Retailers are also exploring intelligent dressing rooms to better help customers find the right fit (and reduce excess returns). Shoppers can 'try on' clothes virtually, to see how a garment would look on them without having to physically put it on. Getting the phygital experience right is a big challenge, but it can come with big rewards. The potential upside for retailers is huge — higher engagement from customers can result in more orders and fewer abandoned carts.

3. Hyper-personalization

Customers want to be treated like people, not market segments. When they come to your e-commerce site, shoppers expect to be able to virtually test a lipstick shade without coming into your store, and chat live with a beauty advisor for advice. They want you to know who they are when they reach out for help, and they don’t want to repeat themselves. And they expect you to remember all of this next time.

Hyper-personalization in retail shows up as tutorials tailored to specific shoppers, personalized product recommendations, and intuitive CX experiences.

This hyper-personalization helps the shopping experience feel unique and connects customers to your brand. The good news is, this trend isn’t out of reach. We know that customers are willing to give you the valuable data you need to achieve it, as long as you use it to create a better experience for them.

4. The Metaverse

The virtual world is opening its doors to retailers, and creating new opportunities for deep customer engagement. According to Winnie Burke, Head of Fashion and Beauty Partnerships at immersive online platform Roblox, customers in the Metaverse want an exciting experience that is close to the brand and its community.

For example, Tommy Hilfiger built a brand experience within Roblox that launched during New York Fashion Week. The designer hosted a physical runway show that was broadcasted live to Roblox users, with avatar models wearing the collection. The shows ran in parallel – people also could see the user experience in Roblox at the physical event. If you were at the Roblox experience, you could buy garments from the runway for your avatars.

The key takeaway here is that it’s vital to create a community. Burke recommends that you immerse yourself in the digital worlds you might want to try out. The Roblox community is passionate, so you need to step into their world before you open a storefront. To be successful in the Metaverse, it’s critical for brands to tap into the community for their expertise on world-building and game mechanics, because no one understands it better than they do.

5. Sustainability and social responsibility

Many retailers at NRF were focused on sustainability and social responsibility. This trend isn’t new — the rise of the purpose-driven consumer has been building momentum for some time. But the focus has sharpened for retailers and customers alike. Consumers are worried about the future of the planet and that shows up in their buying patterns. It’s not enough to have a flashy product — customers are looking beyond the packaging. They want to know if it’s a sustainably created product, whether your company aligns with their social values, and how you treat everyone in your supply chain.

Consumers are rewarding brands that rise to the challenge and punishing those they see as ecological offenders. This trend is especially powerful with younger generations who are now in position to spend. Michelle Evans, Global Lead of Retail and Digital Consumer Insights at Euromonitor International, shared that 24% of Gen Z will boycott brands that don’t share their same social or political beliefs. What’s more, 30% will make purchase decisions based on a brand’s social and political beliefs. This means retailers can’t sit on the sidelines and stay silent because that damages their brand more than speaking up.

Retailers are always looking for a competitive edge — and customers are at the core of any winning strategy.

Learn more about consumer expectations and how retailers can deliver great omnichannel CX.