The retail revolution

Best-selling author and business coach Paul Waddy predicts that AI and ‘creator commerce’ will transform how small businesses operate and how customers do their shopping.

The tailwinds created for online retail in 2022 quickly turned to headwinds in 2023 as a result of rapid interest rate rises designed to curb consumer spending and drive down inflation. The good news is that every retailer, whether it’s a bricksand-mortar store or a pure-play online retailer, can take advantage of both channels. The bad news is that they’ll have to work harder for sales and find more efficiencies in their operating expenses to reach their profit goals.

Rise of the machines

To start with, AI will become mainstream. Not just because it’s cool, but reduced consumer spending is forcing retailers to focus on operational efficiency to hit profit targets. AI does exactly that, through tools such as ChatGPT, chatbots and Shopify Magic.

AI can be used by all retailers. Online retailers can use ChatGPT to power chatbots that assist with customer enquiries, in a tone of voice trained to be ‘on brand’, pulling from a library of frequently asked questions and previous customer interactions. Integrations between ChatGPT and other platforms, such as Canva, have helped small businesses create content quickly, without the need to hire people.

Pesky SEO (search engine optimisation) copy can now be generated using ChatGPT and pasted into the many pages of each website, to improve rankings, removing the need for copywriters, a task that has often been sent offshore. Copy for advertising and websites is now available within seconds using AI – not just ChatGPT but also with features such as Shopify Magic, which suggests product descriptions with one click.

Shopify also plans to launch its Sidekick feature, which will automate many of the processes that were previously manual in back-end ecommerce operations, such as discounting slow-moving stock or merchandising best-selling products to the top of the page. All of these features are more than just convenient; they’re genuine process improvements that will reduce overheads and allow some smaller businesses to level the playing field with their larger competitors.

AI will also fuel my next prediction, by turning retailers into content-generating machines. A savvy content creator can create one piece of content for LinkedIn, for example, and rewrite it in 10 different formats for 10 different channels using ChatGPT.

Here come the creators

The challenge for retail brands in 2024 is to grow their organic social followings and harness the rapidly changing landscape of social media. More people watch TikTok each day than all of the streaming services combined, so it’s no longer acceptable for brands to ignore social media or to say that it’s not

their strong point. I need only take one look at my kids using an iPad to realise that the future is digital.

Retailers need to build audiences and creators with audiences need to monetise them (think David Brent (The Office) style meshing of hands here).

Enter creator commerce. We’ve seen the likes of YouTuber Logan Paul create the Prime energy drink and, more recently, actress Pamela Anderson become co-founder of natural skincare brand Sonsie Skin. On the brand side, we’ve seen Sketchers partner with Kim Kardashian, Harry Kane and Martha Stewart, a strategy clearly aimed at expanding their total addressable market.

The point is that retailers and creators need to come together to combat the rising costs of paid media, and it’s a match made in heaven. Brands need people for the product and the creators need product for the people.

Of course, there are many ways retailers can take advantage of these sorts of creator partnerships. We’ve got pay-forresults matchmaking platforms like ShopMy and Shopify Collabs, or oldfashioned negotiations with influencers to try your products for a fee.

However, what I’m most interested in for 2024 is symbiotic partnerships between brands and creators, for example creating products together and co-branding them, then selling them to new audiences. The long-held hesitation with working in a one-off capacity with influencers is that they churn through brands, which lacks authenticity. Consumers often see that and quite often sales don’t match expectations.

The brand that continues to partner with creators already followed by their own audience risks selling new products to the same people, and potentially cannibalising existing products. I want to see brands get brave, like Sketchers, and cast the net into new waters. This can be a great idea for brands looking to expand internationally.

Co-branding and sharing the sales puts responsibility on both parties to work together to maximise reach and sales. Partnering with the right creators can provide new audiences without relying too heavily on paid media channels that are becoming more crowded and therefore more expensive because they essentially use an auction system – the greater the demand, the greater the cost.

We’ve all seen it in our Facebook ads; we tend to exhaust the same audience over and over at a certain size. To increase our business, we need to increase the size of the pond we’re fishing in.

Stick to the fundamentals

My crystal ball sees the continued growth of ecommerce to eventually reach 50% of total retail within 10 years. Our bricks-and-mortar friends will continue to get better at ecommerce and online brands will still dip into physical retailing, combining for an omnichannel experience, where all ships rise with the tide.

We’ll see more Aussie online retailers succeed in lucrative overseas markets, as the world gets smaller and technology like Shopify Markets continues to break down barriers to entry, such as pesky taxes and duties and foreign currencies, now handled with simple integrations. We’ll see our LinkedIn inboxes flooded with AI-driven this and that, which is likely to result in the average wage-to-sales ratio decline for retailers.

I think we’ll see more brand owners turn into creators who document their business story, and more creators become business owners through partnerships or white labelling opportunities (where a company produces a product that is sold by multiple retailers under different brands). I’m also tipping podcasts and YouTube to become serious channels for retailers.

When it comes to predicting the future, the only certainty is that nobody really knows. One thing that will never change is that good business fundamentals will always reign supreme. Make as much money as you can and spend as little as you can to get it, and you’ll be fine.

Paul Waddy is an award-winning ecommerce expert, strategic adviser and coach. He is the best-selling author of Shopify for Dummies and Selling Online for Dummies, and recently launched Learn Ecommerce, a digital platform offering courses to help anyone build a profitable online business in under 90 days.