As many of us expected, 2023 has been a tough year for the retail industry. High inflation coupled with low consumer confidence has combined to slacken consumer demand across most of the world. However, recent economic indicators have looked a bit brighter, indicating a brighter 2024.

This year has also seen an explosion in interest around generative artificial intelligence (AI) and a growing hype around virtual reality (VR) andimmersive learning experiences. This economic uncertainty together along with advancements in technology poses an interesting question to retail leaders: Should they adapt their businesses to maximize the potential of these new tools or keep their costs down, and focus on the here and now? After all, adopting new technology isn’t without its risks, not to mention its time consuming and, even though the economy is looking up, it’s by no means stable.

The answer is actually quite straightforward: Retailers can’t afford not to embrace new technologies. Consumers have higher than ever expectations of the digital capabilities of the businesses they use, and now demand a more personalized and instant service. AI automation also has the capacity to radically reduce costs while improving business performance. Failing to act means that you cede ground to your competitors which can be fatal in a stuttering economy.

The real question that needs to be asked is: How can retail leaders ensure that their businesses leverage everything digital tech has to offer in the most time and cost-efficient manner?

Here, the answer starts with upskilling. Many retail businesses typically lay the foundations of digital capabilities in technologies and third-party partners, but to truly scale in a cost and time efficient manner, it needs to be driven by leadership. These employees need to be given the opportunity to gain the knowledge and tools to use advanced and ever-changing technologies to support them in the workplace. Customers will reap the benefits of this approach, and it will ensure that retail businesses are future ready.

So, what are the critical digital skills that retail leaders should focus on to drive transformation, deliver success at scale and prepare for next-generation customer engagement? Let’s dive in.

All About the Data

No matter what your digital strategy is, front-line managers need to be able to effectively collect, manage, analyze and understand customer and organizational data. Without basic analytical skills, you simply can’t run an effective marketing, customer service or business development function. Nor can you even begin to think about using AI effectively or start to design VR training experiences.

A common misnomer is that the outputs of data lead the strategy. This isn’t correct. Data science is based on asking the right questions and determining what you should do with the answers. To do this, business leaders, and ideally every person within your organization, must be trained on common terminology, and to be able to accurately read charts, identify data bias, understand the limitations of data science (as well as its potential) and, crucially, be comfortable with validating results.

AI Ready

Plenty has been written about the potential of generative AI. However, it’s worth remembering gen AI is just one aspect of a more overarching AI revolution. Given the breadth of choice of tools, platforms and new techniques available to businesses, the real starting point is understanding where you should direct your resources. To do this effectively, you need to be able to understand how these tools could benefit your business as well as what the risks and resource implications are.

This means acquiring a more fundamental understanding of AI beyond all the hype. The reality is that AI is far from the finished product, and some tools are much more advanced and “game ready” than others. If you have an understanding of how AI works, you will be better equipped to see what aspects of your business could benefit from AI, what skills your team will need to maximize its impact and which tools would be the most appropriate to potentially adopt.

Don’t Forget to Be Social

As exciting as the cutting-edge new tech is, don’t forget that other digital channels and functions are still evolving. This is particularly true of social media, which has undergone an unprecedented period of fragmentation and change. The potential rise of Instagram’s Threads, bans on TikTok and other disruptions mean that there is a need to refresh your social media skills and knowledge.

Brands that fail to recognize and adapt to these changes very quickly lose relevance. To understand if your business is on the right track or requires a new strategy means having a fundamental understanding of social media skills. It’s also true that a brand’s social media presence should be deeply tied to their commercial ambitions now and in the future. That knowledge is kept in the heads of senior leadership. If you don’t understand social media, how can you be sure your output on these channels aligns with your broader commercial goals?

Hybrid Technology Enables Better Leadership

Remote and flexible working is here to stay and has brought about fundamental changes to the front-line management experience. Understanding how to best use technology to manage tasks, monitor productivity and engage team members is critical. As is determining the best way to structure workflows, assess results and enable the equal development of remote and in office workers. In short, to be a modern manager, you need to be able to lead both in person and virtually.

Being a retail manager in today’s economic climate isn’t easy, but by following the recommendations outlined in this article, you’ll be well on your way toward managing a high-performing team positioned for future success.