Survey: What Top Retail Performers Get Right

Vicki M. Young
·4 min read

With 2023 holiday sales wrapping up, a recent survey examines four factors that could drive retail planning for 2024.

December’s Coveo/RSR Research survey of 92 U.S.-based retailers focused on those with revenues over $250 million highlighted trends that appear to separate winners—merchants outperforming the average 7 percent revenue growth—from low-performing laggards.

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Shopping journey in fashion

Thirty-three percent of consumers head straight to a brand’s website when buying fashion. For fashion and specialty retailers, this far outpaces the 17 percent who start their fashion shopping journey on Amazon, the Coveo/RSR survey found.

Some 22 percent start with a Google search, while 8 percent visit a manufacturer’s website and 14 percent turn to social media as their first step. Merchants selling fashion should focus on product discovery and relevant offers to create a memorable customers experience.

“Impress those buyers early and they won’t need a second step—plus, they’ll remember you the next time they shop,” Coveo said.

Product discovery can help customers find items they “might want” beyond the specific terms they’re plugging into the search bar. But discovery comes in all shapes and sizes, from specific product recommendations to a complementary purchase to enhancing the product experience or impulse purchases at checkout.

Tech investments boosts relevance

The Coveo found that demand for relevant, personalized results is growing beyond mere preference.

Citing a McKinsey research reflecting that 76 percent of shoppers are more likely to purchase from brands that personalize and 78 percent more likely to make repeat purchases, the Coveo/RSR survey also found that 76 percent of shoppers get frustrated when a business makes irrelevant recommendations.

That kind of misstep could translate into a missed sale. Top retail performers avoid that mistake by prioritizing tech investments. Fifty-nine percent put money into CRM (customer relationship management) software; 55 percent poured resources into e-commerce; 52 percent shored up order, payment processing and inventory management, and 50 percent funneled dollars toward artificial intelligence-powered search, recommendation and personalization software.

Coveo noted that any online retailers can use in-session personalization to pinpoint a customer’s intent and return information in real time.

Guest shopper challenge

Many returning customers never log in, and cold-start shoppers—those using incognito mode or private browsers—typically make up 70 percent of website traffic. Cold-starts can be difficult to track as some will search on one device only to return later on a different gadget without logging into at least one of those browsers, Coveo noted on a company blog. The survey also found that third-party cookies, once a popular tracking tool, are falling out of favor in the wake of data privacy concerns.

According to the survey, high-performing retailers know they need real-time in-session behavioral data. This is where machine learning and AI can help engineer personalized recommendations relevant to each unique customer. Coveo found that tailored results are at least 30 percent more accurate than generic ones. This translates to higher conversion rates, average ticket sizes and website traffic, it added.

Of the top retail performers, 59 percent aggressively publicize their loyalty platform to personalize the shopping journey through relevant offers based on preferences, purchase history and behavioral models. Fifty-five percent use in-session behavioral data to make real-time personalized offers and 47 percent promote value-driven offers at check-out when shoppers identify themselves as loyal customers.

Generative AI is growing

Generative AI, better known as GenAI, could be a retail game-changer.

That’s because GenAI can distill vast amounts of information from a variety of sources—including product guides, how-tos and other rich content—into simple conversational interaction with customers, and it can do so at scale, according to Coveo. This helps consumers who are researching product features and steers them toward the right item. It also gives customers new ideas or other options, and enhances post-purchase support via online service chatbots to better manage call volume, for example.

The Coveo/RSR survey found that the top retail performers are ahead of the game in adopting technology powered by GenAI. Ninety-three percent said GenAI plans are already in the works. Some 59 percent of the top performers had implemented some kind of GenAI technology in their call centers for this past holiday season. And 34 percent said they were experimenting with GenAI before launching full-scale deployments in 2024. In contrast, underperformers were more likely to be late to the GenAI game. Just 24 percent said they are at the stage where they’ll be incorporate GenAI into their 2024 agenda.