Few, if any, industries have felt the impact of economic headwinds more than retail. As interest rates and inflation steadily rose over recent years, consumers became more cautious in their discretionary spending. While these macroeconomic conditions are always on the minds of retailers, they’re never more prominent than during the transition from June to July, and from one financial year to another.

While that doesn’t immediately bring about an immediate change in fortunes, there are reasons to be optimistic. Tax cuts, designed to stimulate economic activity, for millions of Australians and the upcoming peak season, could provide the wind in the sails for thousands of businesses who have been contending with economic headwinds.

According to SHOPLINE’s Unified Commerce Benchmarking Study, which sought to understand how retailers are investing in 2024, technology will be a crucial source of investment and driver as growth. So as budgets reset and thoughts turn to the future, how are retailers prioritising investment in the months ahead?

Cyber security top of the agenda

According to SHOPLINE’s Unified Commerce Benchmarking Study, cyber security is a priority focus. In total, 69% of retailers will increase investment in cyber security this year. That rises to 89% of very large retailers – those with over $100 million Gross Value Merchandising (GVM) – and 85% of large retailers – those with $50-100 million GVM. Worryingly, just 38% of small retailers – those with less than $10 million GVM – are increasing cyber security investment.

Cyberattacks are increasing in both severity and regularity, and it’s encouraging to see that so many retailers recognise this. By investing in cyber security, retailers are doing far more than increasing their defences; they’re investing in growth too. That’s because consumers are very conscious of online security and are prioritising the brands who they trust are taking the issue seriously.

Cyberattacks are indiscriminate, after all, meaning businesses of any size – including small retailers – are at risk. For small businesses to guard against the significant reputational and financial damage they can cause, and to build trust with conscientious consumers, greater investment is imperative.

Personalisation is king

Personalisation is by no means a new secret to success; the industry has been broadly unanimous as to its benefits for a decade or more. If anything, it’s growing in importance according to our research, which found that 69% of retailers will increase their investment in it.

One of the easiest, most effective ways to retain a customer and incentivise loyalty is to give them more of what they want: the products, communications and engagement that resonates with them, on the platforms they frequent. Now more than ever, retailers recognise the impact of personalisation on customer retention.

Just 53% of small retailers are planning to increase their investment in technology that enhances personalisation, though. Our research also showed that one of the biggest barriers to technology adoption is cost. Through SHOPLINE’s unified commerce platform, we provide all the solutions that retailers – big and small – need to start, scale and succeed, from cyber security and personalisation, to two other critical investment focuses: unified commerce and AI.

Unified commerce

Across the board, 58% of retailers – rising to 78% of medium retailers, with $10-50 million GVM – recognise the strategic importance of unified commerce. Through unified commerce, a holistic customer experience across all customer touchpoints, retailers are able to integrate sales channels and provide cohesive omnichannel experiences to meet customer expectations and drive loyalty.

Unified commerce focuses on breaking down silos of online and offline channels and leveraging technology to deliver personalised and frictionless interactions across the entire customer journey. Two thirds (65%) rate it as ‘very or extremely important’, a sentiment that is particularly strong among large and very large retailers, with 80% and 85% acknowledging the significance of unified commerce in driving their business strategies.

By investing in unified commerce solutions, retailers of all sizes will be well placed to meet and exceed the needs of omnichannel consumers and strengthen and differentiate their market position.

Artificial intelligence (AI)

AI is today’s defining innovation, and over half (55%) of retailers plan to increase their investment in it. It’s a particular focus amongst medium retailers, with 78% focusing on it in the year ahead. From national big box brands to single location operations, AI enables retailers to optimise operations, enhance personalisation, and boost retention and revenue. Whether it’s data analytics to improve product marketing, chatbots to provide 24/7 customer support or auto creating product descriptions and marketing collateral, it’s potential is revolutionary – and retailers recognise that.

No business has been immune to recent economic challenges, and while every retailer is unique, they’re all bound in their hopes for a more prosperous financial year ahead. If their planned investment – and a focus on security, personalisation, unification and AI-driven efficiency – is anything to go by, there will be plenty of opportunities to grow in the months ahead.

Vasko Ckorovski is head of commercial operations at SHOPLINE.