How to Prepare for Retail’s Future​

The next 18 months present an opportunity to reshape retail and e-commerce. Our recent guide provides predictions for upcoming retail trends and tips on how to successfully adapt. Enter your email to get the PDF.

In the wake of one of the most life-changing years in recent global history, it’s time to start shaping the new reality of retail and ecommerce.

This guide covers our predictions for the next 18 months of retail, suggestions for how you can be ready for the changes ahead, and the investments you need to consider to help you create sustainable value and provide exceptional customer experiences.

Are you as tired as we are of hearing the phrase “new normal?”

It’s cliché, but phrases become cliché because they describe a commonly-recognized truth—and it is true that retail is never going back to the “old normal.”

So instead of using the “old normal” as a point of reference for your retail and e-commerce strategy, it’s time to look ahead.

The next 18 months present an opportunity to drive change with insight and intention. Whether your business boomed during the pandemic or you’re just now beginning to make the shift from reactive pivoting to proactive planning, it’s important to understand retail’s new standards of excellence so you can take your next steps with confidence.

This guide will help you make a plan for the coming months and years with:

  • Data-informed predictions for trends, innovations and transformations in retail.
  • Tips for adapting with your customers, people, operations, data and privacy in mind.
  • Technology and data investments to help you respond to the upcoming changes.

The forecast: What can you expect for the retail market moving forward?

1. Low volumes of foot traffic.

Although U.S. foot traffic has somewhat improved since its dramatic drop in March of 2020, it still hasn’t fully recovered.

Some states have seen foot traffic return up to 50 percent of the pre-pandemic rate, but these returns aren’t consistent as states continue to work through their reopening plans, causing additional fluctuations in foot traffic. Consumers are still wary about shopping in stores, and many retailers are opting to keep their brick-and-mortar locations closed while vaccines are rolled out and cases drop to consistently safe levels. Some retailers are offering alternative shopping options like buy-online-pick-up-in-store to encourage in-store foot traffic while reducing the burden of shipping costs and labor.

Will foot traffic ever return to the same volume?

In Australia, where consumers and businesses have enjoyed a relatively COVID-less life for months, foot traffic is still down by 3–5 percent of the year-to-date Australian Retail Index. Anecdotally, many of Lexer’s Australian customers have confirmed these weakened traffic rates and are focusing on strengthening their digital and multichannel customer engagement strategies to make up for the drop.

Given that foot traffic is still low in mostly-recovered countries like Australia, it’s safe to say that foot traffic will return very slowly—if at all. That means that you need to optimize the in-store customer experience to improve conversion rates while minimizing wasteful spend and resources.

2. Continued ecommerce growth.

According to McKinsey, “the first half of 2020 saw an increase in e-commerce equivalent to that of the previous ten years.”

Ecommerce was already on an upward trend, but lockdown turned it into an unavoidable—and irreversible—reality. Today’s retailers need to have a strong online presence, period.

Because barriers to entry are low and the ecommerce market is growing, consumers are being presented with more options and the market is becoming naturally more competitive. Even if your market share is significant now, you can’t become complacent. You need to increase your focus on delivering relevant, differentiated, and meaningful experiences to your ecommerce customers, growing your acquisition to retention, to avoid being pushed out by your competitors.

Having airtight, data-driven customer experience strategies and agile processes will be crucial to successfully navigating this shift to digital.

3. Seamless online and offline integration.

Although ecommerce is on the rise and foot traffic remains low, that doesn’t mean you should give up on brick-and-mortar channels and funnel all your resources into digital. Instead, the events of this past year and a half have strengthened the need for a frictionless, unified relationship between digital and physical.

That may be why 75% of retail executives say they plan on improving online integration at stores, while more than half say they plan to reduce operating hours and staffing levels when stores reopen. To maintain a healthy level of retail sales with reduced foot traffic and fewer retail staff to assist customers, retailers will need to focus on improving the customer experience in store.

By applying customer data to non-digital strategies—and capturing data in-store—you can provide personalized, frictionless experiences wherever your customers choose to shop.

4. Evolving customer needs.

The final major trend you need to pay attention to is the continued shifts in customer behavior, values, and preferences.

In nine of the 13 major countries surveyed by McKinsey, at least 66% of consumers said they tried new kinds of shopping during the pandemic, and 65% or more said they’ll continue to do so.

Additionally, customers’ capacity to buy has shifted—and not always for the better. Your best customers pre-COVID may no longer have the financial means to shop as much as they used to, while others may have a higher financial capacity and willingness to spend than ever before.

According to the EY Future Consumer Index, four new customer segments have emerged:

  • Struggling and worried (31% of consumers): These consumers have suffered financially and changed their shopping behaviors to reduce outgoing costs and limit their exposure to the virus. They’re unlikely to feel like they’re coping well, and they’re reconsidering what’s important to them.
  • Okay but adapting (30% of consumers): These consumers may have suffered a financial loss but are generally coping well and unconcerned about finances. They’re visiting fewer stores, spending less on non-essential items, and purchasing more locally-sourced products.
  • Unaffected and unconcerned (26% of consumers): These consumers have experienced minimal financial impact from the pandemic and are unlikely to change their values or behaviors.
  • Hard-hit but optimistic (13% of consumers): These consumers have experienced the greatest financial impact and the most dramatic shifts in values and behaviors. They’re cutting back on spending across a broad range of categories but are optimistic about a quick recovery and long-term effects.

Understanding the external factors influencing consumer shopping behavior can help you predict and adapt to these behaviors to maximize engagement. However, these changes will be specific to your customers, your industry, and your business—so you need the ability to quickly collect and analyze data in real-time to discover the trends unique to your business.

The game plan: How should you adapt to succeed in the new retail environment?


Today, the customer is in control—and it’s your responsibility to adapt to their needs and expectations.

Because customer behavior is ever-evolving, you can’t rely on old data to understand how best to serve your customers. You need to set up new methods for data collection and continuously monitor the feedback loops between your business activities and actual customer behavior.

Additionally, changing customer behaviors have led to disrupted brand loyalty. In order to retain your existing customers, you need to improve engagement and relevance in every interaction, and personalization is a great way to achieve this. Successful brands are able to identify returning customers, provide relevant content and product recommendations, and offer the differentiated “mom-and-pop store” feel at scale—both in store and online.


With reduced foot traffic and fewer staff in stores, you need to give your sales associates customer insights to provide personalized experiences and maximize sales.

The key to doing so is data.

The new standard for retail excellence is enabling sales associates to quickly access a detailed database of all omnichannel interactions, preference information, and purchase histories for any customer—a strategy known as retail clienteling and proactive customer engagement. With this historical context and personalized recommendations for engaging customers, your team can provide better service and encourage higher-value sales.

The same is true for marketing, ecommerce, and service teams. With all teams aligned around a unified customer dataset, you can orchestrate consistent and relevant customer experiences that improve performance across the board. In 2021 and beyond, winning businesses will make customer-centricity a cultural norm.


Because the lines between digital and physical retail have become blurred, you need to rethink your operational strategies as well.

The most important question you should ask yourself is: Who is the “customer champion” on your team?

Many businesses are still operating in channel-based teams, with separate functions for retail, ecommerce, wholesale, email, social, direct, and service. These teams use systems and datasets that don’t speak to each other and take a channel-centric approach to customer engagement. The problem with these fragmented operational models is that they lead to fragmented customer experiences across channels.

To succeed in the new retail environment, you need to reorient your entire organization to put the customer first. Every team needs access to connected, comprehensive customer insight tools to ensure the consistency, efficiency, and effectiveness of every customer interaction.

By reworking all business processes to start—and end—with customer data, you can successfully deliver the right messages, to the right customers, in the right channels, every time.

Data + Privacy

The future continues to be uncertain. Old ways of working have been rendered obsolete. And historical data is no longer effective for making proactive decisions.

In an ever-evolving retail market, your success depends on your ability to quickly collect data, discover fresh insights, and adapt to changes. You need daily updates to quickly spot and respond to trends as they happen to adjust and optimize results. This immediate feedback loop improves overall business agility and acts as a protective measure against major market disruptions like the pandemic.

At the same time, growing privacy concerns and new regulations are diluting the value of third-party data. Instead of relying on third-party data for insights and measurement, you need to start collecting zero-party and first-party data directly from your customers. Surveys, polls, and product reviews will become essential tools for collecting customer feedback and improving engagement.

The investments: Which tools and datasets do you need to achieve—or maintain—your position as a leading brand?

“The Golden Record” or a Single Customer View

Every system you use to operate your business—including your point-of-sale system, email service provider, customer service tools, and website—all contain valuable information about your customers.

But without the ability to quickly connect, standardize, and visualize that information as a single record of each customer, it’s nearly impossible for you to use it to improve customer engagement. Relying on an IT or analytics resource to manage this multi-system data is too time-consuming to maintain an agile, insight-driven strategy.

To succeed in the new retail environment, you need clean, structured, accessible retail data connected across all teams, channels, and systems. This single view of the customer will act as the foundation for every engagement strategy, providing insights to inform all decisions and strategies across teams and touchpoints.

Customer Data Platforms (CDPs) like Lexer are the key to creating this unified customer database—and they’ve skyrocketed in popularity over the past year. You’ll need one to compete in the new retail environment. Click here to learn how to measure the impact of a CDP on your business transformation, revenue, cost savings, and customer experience.

Predictive Insight and Analytics

The pandemic forced everyone into a hyper-reactive state, testing the agility of existing business processes—and many of those processes were found to be lacking. Although it’s impossible to plan for everything, the best way to maintain a proactive, agile business is to use predictive analytics to anticipate what’s coming next in the retail market.

By feeding your combined customer data into an AI-powered predictive analytics tool, you can predict the most likely future events based on current and past behavior and use this insight to guide both marketing and business-wide decisions. For example, Lexer’s CDP enriches profiles with predictive attributes such as churn risk or predictive lifetime value. Knowing which customers are likely to churn and which are likely to spend more helps you understand who to target and with which messages, products, and promotions.

These glimpses into the future are an incredible competitive asset, allowing you to make smarter, more proactive decisions about customer engagement.

Unsure about where your business falls on the customer analytics maturity curve? Click here to learn more about the four stages of analytics maturity: Descriptive, diagnostic, predictive, and prescriptive.

Advanced Segmentation and Targeting

Customer segmentation and targeting have been retail table stakes for quite some time—but if you’re not already using them, don’t worry. Segmentation doesn’t have to be difficult.

When you start with a single customer view, advanced segmentation becomes incredibly easy for even non-data scientists. You can take a crawl, walk, run approach to maturing your segmentation strategy:

  • Crawl: When you’re first starting out, segmenting customers by lifetime value and basic demographic information like gender and location can increase engagement and ROI.
  • Walk: Once you’ve mastered value and demographic-based segmentation, you can begin to segment audiences by more complex characteristics, including the number of orders, brand affinity, products purchased, channel preferences, and email engagement.
  • Run: Finally, advanced segmentation capabilities involve sequencing, time and purchase intervals, personas, external enrichment, predictive analytics, and website behavior.

With the ability to automate hyper-targeted campaigns and segment updates across paid and owned channels, you can quickly level up to advanced stages of segmentation and targeting maturity—even if you’re just starting out.

For example, Brand Collective used Lexer’s CDP to segment customers by predicted lifetime value, profitability, and churn risk, as well as their likelihood of engagement based on past and present behavior. Using these segments to target the right audiences, they drove a 220% increase in return-on-ad-spend, a 2x increase in new customer acquisition, and a 5x increase in revenue from paid channels. Click here to read the Brand Collective story.

Clienteling and Proactive Engagement

As growing customer loyalty and lifetime value become critical, data can help strengthen customer relationships and increase conversion rates at every touchpoint.

Clienteling is a focused, proactive, and data-driven approach to doing so. Clienteling tools give retail sales associates the ability to quickly retrieve detailed customer profiles in store. This insight helps them improve conversion rates by providing relevant and personalized sales experiences.

Although clienteling is typically associated with in-store interactions, every team can benefit from this approach. When service teams have access to detailed customer profiles and all service channels are consolidated into one inbox, they can ensure high-quality service at scale. The resulting efficiency, contextualization, and proactivity transforms service teams from cost-centers to profit-centers.

Because CDP-powered clienteling software allows sales associates to capture the in-store data that’s typically lost and unify it to customer profiles, marketers can also use this additional data to improve personalization and re-target store visitors through digital channels.

Click here to learn more about how clienteling works, examples of what it should look like, and 6 key considerations before you start.

Segment-Level Measurement and Reporting

Historically, reporting has struggled to convey the direct, daily impact of business activities on actual customer behavior. As your customers, your business, and the greater retail market continue to change, using segment-level reporting enables you to understand performance, improve outcomes, and respond to trends with agility and insight.

By tracking marketing’s impact on actual customer behavior and core business KPIs, you can begin to think strategically about the impact of specific campaigns on top-level business performance. A fast, daily feedback loop at the segment level allows you to quickly adjust and optimize as your understanding of campaign performance unfolds.

With technology like Lexer’s measurement and reporting product, Track, you can directly map marketing activities to customer behavior. It helps you take a daily pulse on what’s driving performance right now, how your current campaigns are impacting any metric across any customer segment, and where to look to quickly seize opportunities and mitigate risks. Custom dashboards can be set up quickly and easily for always-on reporting or month-by-month experimental campaigns, increasing the speed of your feedback loop between testing, learning, and optimization.

Strategic Consulting and Support

You can have the best, most innovative tech stack in the industry—but technology only gets you so far. The true driving force behind future retail excellence are the humans across your organization.

People, processes, and cultures must adapt to maximize the impact of new tools and strategies. However, transforming into a customer-centric, data-first business is a big task. If you don’t have the available resources or experience to drive internal change right away, strategic consulting services and ongoing technical support can help supplement your existing team.

When you’re looking for tools to support your future business growth, look for a true partner, not just a vendor. Lexer, for example, provides the services and strategic consulting you need to ensure a smooth, successful adoption of our integrated CDP, marketing, retail, service, and measurement tools. With a level of care and commitment unique in the SaaS industry, our Success team helps customers develop the technical know-how, process efficiencies, and transformational mindset they need to learn, grow, and adapt.

What’s next for you?

Before, during, and after the pandemic, every successful retail business has always had and will always have one thing in common: They put the customer first.

Whatever the future of retail looks like for you, remember it must be centered around genuinely understanding and engaging customers at every stage of their journey, online and offline.

And we’d be honored to be the CDP partner to help you do so.

With one of the simplest onboarding processes in the industry, Lexer cleanses and combines data into an enriched single view of the customer with no heavy-lifting required from brands and retailers. Our intuitive tools enable retail, marketing, and service teams to draw meaningful conclusions from data in ways previously reserved for experienced data scientists, and our Success team teaches proven, data-driven engagement strategies that empower all teams to positively impact every stage of the customer lifecycle.

Curious about why some of the world’s most iconic brands and retailers have chosen Lexer as their CDP partner? Click here to see the top 15 reasons with testimonials from our customers.

Lexer is the only CDP built specifically for retail.

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