How digital experience shoppers are shaping retail: PwC

Technology-powered shopping experiences are rapidly shifting from niche innovations to mainstream offerings, and in turn, calling retailers to reevaluate their market presence. As these companies plan for reinvention and sustained growth, their customers’ preferences play an important role in guiding strategic decisions on tech investments and long-term value.

Our 2024 Holiday Outlook Survey highlights a group of US consumers who are redefining consumer behavior. Digital experience (DX) enthusiasts — who place an importance on having multiple in-store digital services when holiday shopping — stand out not only for their strong preference for having a variety of tech options but also for their influence on the retail landscape. They integrate digital and physical shopping environments, demanding tech-based interactions throughout their purchase journey. From smart fitting rooms that recognize selected items and suggest complementary products to virtual try-on experiences, their comfort with and desire for digital service is transforming traditional retail models and turning once-novel technologies into essentials.

For retailers, understanding and engaging the DX shopper segment is increasingly essential for thriving in an increasingly connected marketplace. This group's economic impact is hard to ignore, with 76% planning to maintain or increase holiday spending, outpacing consumers overall by 10 percentage points. Their spending power, which is likely to grow, highlights an important insight: seamlessly blending digital innovation with human touch (online and in-store) is often the catalyst for driving revenue and brand loyalty.

Insights on DX shoppers

Masters of the holistic retail spectrum

DX shoppers want the freedom to curate their shopping journey and create personalized paths to purchase that rewrite traditional channel behaviors. And they want seamless, tech-enabled interactions at each touchpoint.

While DX shoppers continue to visit physical stores, they typically expect these environments to evolve in line with their digital habits. Common frustrations, such as long lines and stock shortages, reveal a gap between their expectations and in-store realities, often leading to abandoned purchases. Retailers that adapt by offering both self-checkout and staffed assistance — allowing shoppers to choose the shortest line or receive help when needed — can reduce these friction points. Additionally, real-time inventory updates and AI-driven assistance that suggests relevant products and provides tailored customer support help retailers capture the holistic value of these shoppers' tech-driven expectations.

Success in engaging DX shoppers across in-store and online channels requires strong measurement. Retailers use unified customer profiles, journey tracking and cross-channel metrics, such as online-to-store conversions and loyalty program engagement, to better understand how these shoppers interact with their brand.

However, many retailers also worry about the challenges of channel hopping: inconsistent brand experiences, increased returns and the pressure to offer seamless but costly integrations.

With 83% of DX shoppers saying that a loyalty program is an important factor to them when holiday shopping, 20 percentage points higher than consumers overall, there’s a clear potential to engage them further. But these shoppers are less likely to visit stores for traditional reasons, like routine purchases or seeing products firsthand. To help attract them, retailers should consider immersive, tech-forward experiences — think pop-ups in jewelry stores, AI-driven personalization in cosmetics and augmented reality in video game outlets. By recognizing and addressing the challenges of cross-channel integration, retailers can meet these digital-first consumers where they are, balancing investment in unified systems with clear return on investment (ROI) and customer satisfaction to help manage the complexities of omnichannel retailing.

Digital shoppers often want to curate their own brand experience

Today’s competition can be fierce, and customer expectations are higher than ever. Shoppers want a consistent, seamless and personalized experience across channels during their purchasing journey.

Rethink value: Don’t just invest in tech — reinvent the value chain through digital value transformation. Build a scalable, end-to-end approach with next-generation technology to help create adaptable, connected retail experiences that can support long-term growth.
Unify the experience: Create a consistent omnichannel customer experience so that holiday shoppers feel confident in making your brand or business their first stop.
Drive engagement: Integrate industry-leading technologies like AI, augmented reality and interactive displays strategically across digital and physical spaces to create seamless experiences that can help enhance customer engagement, increase sales and build long-term customer loyalty.

Personalization meets instant gratification

The impact of payment technologies on DX shoppers' behavior is profound. While traditional payment methods like cash and credit cards remain popular, there's a clear shift toward digital and mobile payment solutions. Store/brand apps, mobile payments and self-checkout top DX shoppers’ must-have lists. This trend extends to emerging technologies like biometric payments, which offer both enhanced security and additional convenience.

AI plays an integral role in shaping the DX shopper's journey as well. From personalized product recommendations and real-time offers to AI-powered chatbots for customer service, these consumers are drawn to tailored experiences that anticipate their needs.

Consumer preferences for tech-enabled, personalized shopping experiences

Amid the sea of offers from established and new competitors, attracting customers can be challenging; keeping them can be even more difficult. The advantage goes to the innovators: the companies that continue to reshape the way they operate to anticipate and meet new needs and market conditions. DX shoppers effortlessly move between digital and physical spaces, creating new opportunities for brand engagement.

However, advanced tech and personalization bring challenges of their own. Retailers are concerned about privacy and data security, the potential to alienate customers and an overreliance on technology that may undermine the human touch. As many retailers transform their tech infrastructure, they also have an opportunity to reimagine their operational DNA to help address these concerns directly.

Reinvent or get left behind: Continually evaluate where and how your company might benefit from rethinking what you offer and how you do so.
Measure impact: Track key metrics like conversion rates, repeat purchases and customer lifetime value to gauge the impact of personalization on sales and loyalty. Use a flexible analytics platform to mon itor trends and identify which channels and personalized offers that resonate with customers, delivering timely and relevant experiences that can drive measurable growth.

Fortifying trust in a unified marketplace

Beyond their shopping channel choices, DX shoppers demonstrate distinct values and preferences. Brand image and company reputation often matter a lot to them. They are more likely (21 percentage points) to buy gifts that support a cause for social good and to shop during specific time periods like Black Friday or Christmas, due to it being a family tradition (18 percentage points). Additionally, 77% prefer local or locally sourced products.

Alongside seamless experiences, DX shoppers place an importance on company values — like environmental sustainability, ethical practices and product safety — when choosing the brands or retailers they purchase from during the holidays, significantly more than consumers overall. Retailers should be cognizant of these principles as they tailor their communications to this group and build their trust.

In the rush to digitize, however, many retailers have become complacent in one area. Though tech adoption is widespread, a gap exists between retailer and consumer views on data security. With 83% of consumers prioritizing personal data protection, cybersecurity is now a vital market differentiator. And yet executives often risk trust erosion by overestimating consumer confidence. This misalignment presents an opportunity for many retailers to build lasting customer loyalty through transparent data practices. Consumers are willing to share data when they see value, and trust can be earned by demonstrating responsible stewardship.

Transparent trust building

Today’s holiday shoppers want more choice, speed and convenience regardless of how they interact with a company. But there are other factors at play, such as macroeconomic trends and evolving consumer sentiment. Many retailers know their customers, but they should continually keep a pulse on what is important to them, too — like how secure consumers feel in sharing their data and personal information and how well a brand or company’s values align with theirs.

Prioritize security: Leverage cybersecurity as a cornerstone of brand identity. Proactively educate consumers on data practices, transforming privacy concerns into opportunities for deepening customer relationships.
Earn trust: Be transparent about your brand or company’s sourcing, labor and privacy policies so that it can be easier for consumers to trust in doing business with you.
Deepen relationships: Create compelling, transparent value exchanges where shared data visibly enhances personalization, unlocking exclusive experiences and fostering customer loyalty.