The Five (New) Pillars of Retail
- Sid Mookerji
- Apr 9
- 4 min read
As younger generations of shoppers exert new pressures on retailers—including demands for omnichannel accessibility, flawless personalization, and immediate delivery—it’s clear that retailers need to adopt effective technologies to survive over the long term.
These pressures apply across the entire sector. Even Amazon and Walmart, the two largest companies in the world, will need to find ways to meet new expectations: in just over a year, the discount retailer Temu reached a milestone of active monthly users that took Amazon nearly three decades to achieve, (1) and there is some reporting that Temu has now overtaken Amazon in this area. (2)
This dilemma for retailers is a huge opportunity for investors.
With legacy retailers looking to adapt and startups like Shein barreling full speed ahead, the companies providing commerce enablement technologies are especially attractive investments. These companies hold the key to the five new pillars of retail:
1. Engaging the Different Generational Cohorts of Shoppers
Each generation has distinct shopping behaviors, influenced by technology, culture, and economic conditions. Gen Z gravitates toward digital-first experiences, finding products through social media and expecting seamless checkout across multiple platforms. Millennials still value convenience but are also increasingly focused on sustainability and ethical sourcing. (3)
AI-powered commerce enablement tools help retailers understand those differences. The company Knit uses AI to accelerate and refine traditional focus group research: assembling cohorts of consumers via videoconferencing, they use proprietary AI to analyze participants’ facial reactions and verbal responses to produce quantitative and qualitative data for their clients. Knit allows companies like Amazon, Möet Hennessy, and Nascar to segment their audiences more precisely and deliver effective content to each group.
2. Personalizing the Shopping Experience at Every Stage of the Buying Journey
AI-driven personalization engines leverage real-time and historical data to tailor product recommendations, dynamic pricing, and targeted promotions. AI can also optimize customer support through chatbots and virtual assistants, ensuring that shoppers receive immediate and context-aware responses.
Startups like ChatLabs are transforming standard demographic analyses by tethering personalized offers to a consumer’s own social media feed. When products emerge organically from what they’ve already chosen to engage with, consumers are more likely to find those products relevant. ChatLabs also takes care of the purchasing experience, eliminating points of friction that can drive up bounce rates. Companies like Samsung, Dior, and Jerla are using this technology to increase their engagement, conversion rates, and return on ad spend.
3. Harnessing the Right Data for Forecasting and Transparency
The third pillar is especially important today, considering our current economic uncertainty. With tariffs up in the air and consumer confidence on a momentary downswing, (4) retailers rightly “see both danger and potential” ahead. (5) Data alone cannot dictate how well companies weather this volatility. But certain forms of commerce enablement tech can help retailers meet the moment and plan for future demand.
In addition to impacts to pricing, tariffs have major compliance ramifications. Visibility into the provenance of a product’s components, and which countries it passes through before it reaches a warehouse or store, can be extremely time-consuming when done with traditional tracking tools. AI-driven technology like that of Tradeverifyd, a company that delivers end-to-end supply chain visibility and documentation, reduces the time products are held at national borders for customs checks. These wait times directly impact how quickly merchandise gets into a warehouse or onto a store shelf. It also obviously impacts any kind of merchandise which is shipped directly to consumers from a manufacturing site outside the United States.
Visibility into the supply chain thus reduces the retailer’s administrative burden and minimizes delivery delays. There’s another class of commerce enablement tech that provides visibility into inventory and merchandise placement within the warehouse or store. One example is the analytics startup Daash, which draws on search traffic and public data, including competitors’ offerings and pricing, to provide insights for strategic decision-making about inventory numbers, placement, and protection.
4. Deploying Strategic Retail-Centric Security Solutions
In the e-commerce world, AI has complicated the threat landscape; fraud prevention and cybersecurity must be integrated seamlessly into the shopping experience. AI-powered security solutions can detect fraudulent transactions in real time by analyzing behavioral patterns and transaction anomalies. Other approaches like biometric authentication, AI-driven risk assessment, and blockchain-based verification systems are becoming more common even for smaller-sized companies.
Geopolitical uncertainties heighten the need for sophisticated approaches to cybersecurity, as fractured international coalitions means there will be more attempts to break into online repositories of data. Securing consumer data and proprietary data should be of chief concern, but protecting vulnerabilities via supply chain partners and other third parties is also pressing.
And in-store challenges remain. The problem of shrinkage persists across the industry, with large retailers like Target, Dick’s Sporting Goods, and Walgreens including the problem in its earnings reports. (6) In fact, the issue has become so complex that the National Retailer Federation stopped producing its Security Survey in 2023, explaining that “as the nature of retail loss has evolved, it has become clear that a broad study about retail shrink is no longer sufficient for capturing the key challenges and needs of the industry.” (7)
5. Embracing AI Broadly, and General Artificial Intelligence in Particular
With so much volatility in the markets and so much uncertainty in the regulatory landscape, this is another period—in some ways similar to Covid—when the poor performers will fail while the super performers capture more and more market share. Pitchit is a company aimed at streamlining lead qualification by automating the sales process with AI agents adhering to all applicable regulatory and business-process frameworks. It can entirely take over qualifying inbound calls and managing outbound communications via voice, text, social, and e-mail.
Pitchit is one example of the new opportunities opened up by the rise of general, secure, non-hallucinating artificial intelligence; other areas ready for AI-driven enhancement include strategic decision-making and innovation.
As in the pandemic, so too in the new age of AI: Retailers that lean into AI-driven commerce enablement tech are more likely to join the super performers than the retailers doing things the traditional way.
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3 https://www.statista.com/statistics/1464749/gen-z-millennial-consumers-driven-by-sustainability-us/
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