As a leader in experience management for retail-based businesses, I am often asked: “What’s the biggest challenge facing retail-based businesses today?”
From a strategic lens, it’s not a single challenge, rather a convergence of two disruptive macro forces: the rapid evolution of consumer expectations driven by technology, and the long-term labor constraints reshaping business models. These dynamics are redefining how businesses create value, compete, and scale, demanding smarter use of data, automation, and experience design across the entire operation.
Going deeper, what does this look like in practice?
If we zoom out, nearly all current challenges trace back to:
- Rapid technological shifts are reshaping consumer behavior and expectations
- Evolving societal trends are shrinking the labor pool and changing workforce dynamics
As Ken Hughes points out, we’re now operating in a world where seven generations intersect in the marketplace, and eventually, the workplace. Each brings different lived experiences, levels of tech fluency, and evolving expectations creating unprecedented complexity. And the pace of these shifts is only accelerating.
While these trends resonate with strategists and CEOs, operators experience them as daily execution pressure. Translating the big picture into frontline impact helps pinpoint where the real friction, and opportunity, lies.
Technology-driven shifts in consumer behavior
These aren’t new trends, but they’re evolving fast:
- Omnichannel complexity – Third-party delivery, mobile apps, web, and social platforms are now baseline expectations. Each channel adds layers of operational, staffing, and technology demands.
- AI integration – From supply chain forecasting to personalized experiences, every business is trying to harness AI, while navigating legacy systems and fragmented tech environments.
- Automation in operations – Self-service kiosks, digital ordering, and AI-enabled cooking or restocking tools are rapidly becoming essential, not experimental.
Workforce disruption from societal change
Long-term labor headwinds are only getting stronger:
- Fewer available workers – Aging populations, fewer teens in the workforce, and immigration challenges are shrinking the hiring pool.
- Rising costs and retention pressure – Labor is more expensive, less loyal and more open to gig work increasing the need for better employee experiences, scheduling, and engagement.
- Real location of labor – Businesses are rethinking where people make the biggest impact, automating routine tasks to free up staff for high-value customer interactions.
Retail-based businesses need to listen deeply, act intelligently, and operationalize insights at speed. XPMatters is uniquely positioned to do just that, especially in partnership with Qualtrics, the leading experience management software provider. Together, we help brands connect customer and employee feedback to fast, meaningful action.
In this environment, the winners will be the businesses that can navigate both macro trends and daily realities with speed, empathy, and precision. Brands that choose not to act will get left behind.
About XPMatters
XPMatters specializes in employee and customer experience consulting for retail-focused businesses. The firm’s expertise includes CX/EX measurement programs, customer journey mapping, action planning, and delivering insights that drive employee engagement and customer loyalty. By aligning strategies with business objectives, XPMatters empowers organizations to achieve sustainable growth and a competitive edge.
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