In a digital-first world, the front office is the back office. I think one of the most important retail trends in the next 12 months is really the associate and investing in associates. The labor market, especially in the U.S., it's very tight and really getting workers to be super compelled, having engaged workers, is very important. So, retailers really need to think about how they're investing in their own people and giving them the tools, to really make their job successful.
And those tools could be anything from, giving them data analytics, collecting in-store information, giving store managers the ability to make decisions on their own, that helps that customer journey. It could be tools in terms of making sure they have the right technologies in the store to be successful. And it could be tools in terms of trainings, developing people, giving them opportunities for promotion, giving them opportunities to cross-train. So, I think the number one trend over the next year is really investing in the people because the people is really what will make a difference between retailer A and retailer B.
I feel like I have to say AI, because everybody is. I think a lot of that hype is real. This isn't like cryptocurrency where I think 90% of people didn't actually know what it was or how it works. AI, same.
AI, it's a lot more straightforward. And, you know, machine learning and many definitions of AI have existed for a while. But I think with chat GPT and now Google Bard and all of these are now available for $20 a month or free. Whether that impacts customer expectations in terms of better customer service or just a more productive workforce, or a changing in talents in the workforce.
The big one for retailers over the next 12 months, the intensity with which products are going to get promoted is going to go through the roof. As everybody now has product again that you can promote. Promotions for the last 36 months around the world have been pretty limited. You know, COVID, nobody was promoting much of anything.
And then last year was supply chain issues, there just wasn't any product to promote. With the supply chain more normalized and with retailers desperately trying to get back to growth because they've all over-planned their growth numbers. You're going to see an enormous amount of promotional intensity in the marketplace and a lot of disruption to that already disrupted price pack continuum. So, there's huge opportunity for people that are nimble enough to look at their data, understand where the white spaces are, and capitalize on it.
Only thing that I can actually get retailers to pay attention to is generative AI right now. And then anything around monetization. Because that will fund what they're doing in generative AI. And you've got retail media, you've got data monetization, also monetizing your IP.
Every retailer has something that they do, it could be a process, that's unique, that can actually be packaged and sold to others. And so this is why we're we're so bullish on retail right now, physical retail. Then if we think about generative AI, this idea that we can deliver a better experience for the consumer. We can also take out a lot of friction, we can better educate and inform.
If I was a retailer, what I would have on my radar for the next 12 months. You just can't not talk about the competition for talent. High-performing, frontline sales associate will try to sell three times as much, than a moderate performer. In such a competitive market, you have to be the place that people want to work.
And I think Starbucks is an instructive one around that. As I often say in a digital-first world, the front office is the back office. So, understanding how you match the capacity demand as you introduce more digital channels will be something I'd have in my crosshairs as a retailer. Staff is your front face when your customer walk into the store.
I think invest in your staff training, or even look into how to compensate them. So, keep your best one in the store so that always that can bring the different shopping experience to your customers. If they also can see the data, how many customers are walking in and where they shop and what their conversion and compared to their goal. What can they do to improve the conversion or the KPI?
The retailer share the data with the staff, so, there is transparency there. The staff can do more and to contribute more. So, if you a brand you want to scale, you need retail. Like retail part of it.
I think single-channel retail is all but dead. It's impossible to be successful as a single-channel retailer. You need to be online, you need to be in stores, you also need to have partners at some point. Big, big changes around how you acquire your customers and how you spend your marketing dollars.
There’s such huge evolution and effectiveness of Facebook and Google and what you can get there. The cost of customer acquisition online is going through the roof. Some things have worked really well before, certain type of influencer marketing is much harder now because of just saturation and other stuff. So, you have to be really, really thoughtful about how you acquire customers.
And you also have to be very thoughtful about what your strengths are and get really, really good at it. If you asked me about China, I would say this year or next year is the very beginning after COVID. So, first I would say the consumer behaviors have changed a lot. Due to COVID, people or consumers are willing to spend a more time outside of their home to have the fresh air.
That's why you will see, especially the past of one year, some of the outdoor brands like Arc'teryx, like Descente, like some, you know, North Face or some American ski brand like a Burton. They are selling really, really well in China. So, this is also to show that people are willing to spend more time outdoors. I think this is one of the trend.
Retailers who are running physical stores have to now enhance their customer experience. A lot of artificial intelligence has to get deployed to understand consumer behavior. Because all retailers have a lot of unstructured data, whether it's a customer complaint, or if it’s a customer queries or if it’s a call center, even sales associates engaging with customers who are walking into the stores. People are becoming more and more sophisticated.
They are comparing the price with online platform and the offline platform. So, this is also very important for the retailer If you want to win in the next year, you need to keep the consistency online and offline. Don’t show a lot of price discrepancy. There are new ways for retail to add value and it's a challenging environment right now for many reasons.
And different consumers need different in-store experiences. It could be demographic, psychographic. So, it can be easy to see if it's raining, I need to be engage with in a different way than if it's a sunny day. And I think that generative AI has already is helping us with a lot of this, and we're just getting started.
