Despite disrupted supply chains, inflationary pressures, shifts in consumer behaviour and other challenges, the retail sector has the potential to thrive in 2024. Our Retail Forecast 2024 explores the trends shaping the year ahead and how they can help enhance the customer experience and drive revenue.
Why are the 2024 retail trends important?
The 2024 Retail Forecast outlines the key trends where attention, consideration and investment are needed from retailers. These trends help retailers navigate the sector following an unpredictable and fluctuating few years.
In an ever-evolving landscape, it’s crucial to adapt to change to protect your business and ensure profitability. This means you need to stay proactive in anticipating industry changes and shifts in customer behaviour.
What happened in retail during 2023?
With store closures at their lowest since 2017 and an increase in new openings, 2023 was a positive year for retail. However, the retail industry continued to face challenges, particularly for high streets and shopping centres, as footfall remained below pre-pandemic levels.
To continue to see positive changes in the upcoming year retailers must closely monitor and adapt to pivotal industry trends. Thriving against the odds requires a clear understanding of customer preferences, enabling you to create shopping experiences that exceed all expectations.
2024 retail trends
1. AI revolutionising retail
Artificial Intelligence (AI) is revolutionising retail. It’s the biggest disruptor to shake up the industry since the advent of online shopping. It’s estimated that $40 billion of additional revenue was driven by AI in a 3-year span.
AI is the technology that collects and processes data to give retailers actionable, real-time information.
Retailers are recognising the potential of AI and are leveraging it to set themselves apart as market leaders to boost profits. It’s helping them enhance the shopping experience, improve operational efficiencies, and make accurate, data-driven business decisions.
Let’s explore a few examples:
Personalisation
Retailers are utilising AI to create unforgettable, personalised shopping experiences. This can help increase customer lifetime value by encouraging repeat purchases, long-term loyalty and brand advocacy.
For example, retailers are using AI to provide tailored product recommendations and targeted promotions based on shopping history. At the other end of the scale – smart retail stores are using AI and biometric recognition to identify customers and modify their product displays, pricing and services to reflect the customer.
Next level R&D
AI enables retailers to take Research & Development (R&D) to the next level. AI technologies can be used to gather and interpret customer feedback, market trends and purchasing data. This information can then be used to support the development of new, innovative product designs that better meet the needs of the customer and fill in gaps in the marketplace.
On-demand, always-available customer support
Retailers are leveraging AI to implement advanced chatbots that offer on-demand, always-available customer support. AI-supported chatbots can respond to customer questions, assist with troubleshooting and redirect to a human expert when necessary. As well as improving the customer experience, AI chatbots streamline staffing to help enhance productivity and efficiency.
2. Hybrid retail
E-commerce is great for convenience, but shoppers still enjoy visiting a physical shop. That’s not going to go away in 2024, so retailers need a hybrid retail strategy that covers the best of both worlds.
A typical retail journey today has multiple touchpoints across physical stores, websites, mobile apps and social media. A hybrid approach puts your brand in front of a more diverse audience and reaches them at every touchpoint in their retail journey.
Your strategy should integrate the convenience of online shopping with an immersive and personalised in-store experience.
Here are a few examples:
Click and collect
Click and collect gives customers the option to buy products online and pick them up from their nearest store. This allows them to enjoy the convenience of online shopping and avoid home delivery charges.
In-store digital kiosks
Introducing a digital kiosk to your physical store gives customers access to a wider range of products. It allows them to check product availability across all stores and online, and have the item shipped out to their desired location. This provides customers with the benefits of online shopping while enjoying the in-store experience.
Virtual changing rooms
Retailers are leveraging augmented reality (AR) to allow customers to virtually try on clothes and accessories via mobile apps such as Wearlix. Customers can see how items look on them without the hassle of physically trying them on. This bridges the gap between the online and in-store shopping experiences and makes shopping more convenient than ever.
3. Focus on employee wellbeing
Today’s customers are looking for a human connection and they love brands who love their employees. Retailers are responding to this by investing in their people.
Retailers are offering more training opportunities, focusing on employee wellbeing, and creating inclusive work environments. Not only does this empower employees to thrive, but it helps retailers to attract top talent.
This is another use-case for AI tools. For instance, retailers are utilising AI for the likes of fair shift scheduling and implementing career path programmes.
Your employees are your greatest asset. A positive, engaging workspace where employees thrive can help boost brand advocacy and enhance the shopping experience.
4. The rise of social commerce
Social commerce is rapidly growing and is expected to rise to nearly $80 billion in sales in 2025. Social commerce is transforming the shopping experience and offers a new way for customers to interact with brands. With this new opportunity, retailers can reach a wider audience and secure a competitive edge.
Social commerce is the process of selling products and services directly on social media platforms such as TikTok and Instagram. For example, if you see a nice pair of blue jeans on Instagram you can click ‘Shop Now’ to add it to your basket and complete the purchase right there on the app.
This creates shopping opportunities on the digital platforms that your customers use most. With over 5 billion active social media users, retailers need to take advantage of this.
5. Embracing sustainability
As consumers increasingly make the choice to prioritise sustainability, businesses face growing scrutiny and pressure to meet new standards and adapt to changing shopping habits. In 2024, retailers need to re-evaluate their business models, adopting sustainability as a fundamental aspect of their mindset and operations.
Market-leading brand, Selfridges, is a great example of an impactful shift towards sustainability. Their ‘Project Earth‘ initiative focuses on sustainable materials, new shopping models, and challenging mindsets, with a commitment to become Net-Zero by 2040.
Conclusion
Our 2024 retail forecast shows that retailers can thrive in the year ahead despite an ever-evolving landscape and ongoing hurdles. Technology-driven innovations, a focus on employee wellbeing, and sustainability goals are the trends to look out for.
Retailers should continue to closely monitor and respond to industry shifts and evolving customer behaviours. A useful addition to your 2024 toolkit is the retail analytics platform, Retail Report. Find out more about how Retail Report can help drive retail performance and boost profits.
