In 2024 we will be seeing more of “picky shoppers”, i.e. customers who want the absolute best version of a product with personalised attention, while guarding personal information to enable such service. Others consider affordability as the key factor, however not compromising on the quality while preserving sustainable practices with swift delivery. Sounds like a lot, doesn’t it?
If we add to constantly evolving customer preferences, the unpredictability of the economic downturn, high inflation with unaffordable interest rates, more conflicts and climate change, there are a lot of various factors to consider and adapt in the retail landscape.
Amidst all of the uncertainty, the next 12 months seem to be looking rather optimistic with finally reaching an equilibrium of supply and demand post-pandemic and inflation decelerating in the latter half of the year. According to Forbes, inflation is going to drop to 2.4% from 3.2% in 2023 in the US, and roughly to 2.7% in the mid-year in Europe. However, albeit with an optimistic outlook, research points out that consumers will still continue to prioritise price sensitivity.
If you’re looking to gain a competitive advantage and to stay ahead of the curve, this article might be just for you – as we dive deep and explore (thoroughly with examples!) the Top 11 Trends that are reshaping the retail industry in 2024 and beyond.
#1 Phygital Retail
Phygital retail, otherwise known as “hybrid shopping” is a trend on the rise, mainly due to major generational differences between Boomers' and Gen Z’s shopping behaviour. Boomers, often valuing traditional in-store experiences, appreciate the tangible aspects of shopping. On the flip side, Gen Z, the digital natives, exhibit a penchant for online shopping. The divergence highlights the unique needs and expectations of each generation, prompting retailers to strike a balance between the tactile world of physical stores and the convenience of the online world.
According to the survey conducted by Globenewswire 95% of consumers review products online, before making a purchase, with 58% expressing a willingness to pay a higher price for items endorsed by a positively reviewed brand (there’s more on endorsements if you hop on to trend #3).
In 2024, successful retailers are seamlessly integrating their physical and digital channels, offering customers a cohesive experience by leveraging advanced inventory management systems, customer relationship management (CRM) tools, and sophisticated analytics to synchronise operations across all touchpoints.
In simple words, imagine browsing a product online, then transitioning to a physical store where personalised recommendations based on your online behaviour are awaiting you.
Does it sound like a sci-fi movie? Not really, it’s just the next step of bringing your unique personal preferences into the store to finally being ‘understood’ and catered for. For example, brands like Nike have been pioneering unified commerce experiences with the use of Augmented Reality (AR), more on that one in trend #5.
#2 AI-Powered Personalisation
Artificial Intelligence (AI) is still a game-changer in the retail sector. In 2024, retailers are harnessing the power of AI to deliver highly personalised shopping experiences. Despite the media's negative portrayal of AI and handling of personal data, a surprising 65% of Gen Z individuals express enthusiasm about the advancements in AI and perceive it as a beneficial force for society.
You’re probably thinking, so how does AI work? In simple words, machine learning algorithms analyse vast amounts of customer data across various platforms such as ecommerce sites, social media, and marketing channels to understand preferences, predict certain behaviour, and finally recommend unique sets of products tailored to individual tastes.
So, for example, if you’re collecting loyalty points on your mobile app, you have probably noticed that your favourite coffee chain might be offering a complementary product ‘to go’ or sending a promo code to use on your next drink. Tracking consumer preferences to this extent, might sound creepy, but this is the only way to offer customers exactly what they want.
AI has not become a commodity yet, with only the largest companies being able to afford such innovative and complex solutions. For example, retail giants like Amazon are using AI in several ways, including product recommendations, but also chatbots and voice recognition. This adoption is supposed to have a direct impact on companies’ bottom line.
So, is the ‘AI game’ only for the big dogs? The reality is that AI/ML solutions are quite costly to implement and might be reserved for deep pockets. There are some opinions that AI might kill small businesses while the ROI from adopting these innovative solutions requires resources that smaller retailers cannot afford.
Unless AI becomes available to the masses? Like with any technology advancement anything is possible (one day we all thought that the Internet was only for the privileged).
#3 The Emergence of Recommerce
According to Insider Trends, a "resale boom" is anticipated in 2024 as retailers increasingly venture into recommerce, otherwise known as “resale commerce”.
As a big fan of vintage shopping, it’s exciting to see that the demand for resale marketplace sites such as Vinted, Vestaire, and Depop is on the rise. From a sustainability standpoint, it is great to see that large retailers are hopping on the “resale” bandwagon. For example, Selfridges (UK) aims to derive half of its sales from resale, repair, rental, or refills by 2030. Other major brands such as H&M and Uniqlo have also dedicated more floor space to rental and resale initiatives.
One of the pioneers of the recommerce trend, Zalando, has been rolling out the “pre-owned category” since 2020. It proves that the success behind it has been driven by two factors; customers who are increasingly seeking pre-owned items, either for sustainability reasons or to enhance their appearance and decluttering, prompting customers to simplify their belongings.
What’s more, recommerce is expected to become the primary driver of profits rather than merely a supplementary sustainability initiative (more on that one later in trend #8). The rise of this trend is driven by younger generations with 70% of Gen Z buyers stating that sustainability is a key factor when purchasing fashion items.
#4 Frictionless Delivery
Are days of ‘next-day delivery’ gone? Slowly but surely, we are moving this way with frictionless delivery, which emphasises speed, convenience and minimal customer effort.
Have you ever found yourself ordering a meal from a certain type of restaurant purely based on the delivery time? I do it all the time - 1h delivery is a thing of the past and I’ll be happy to pay extra if my lunch was delivered at my doorstep (still warm) within 20 to 30 minutes at maximum.
Frictionless delivery within ecommerce can only be achieved through the integration of advanced technologies and strategic partnerships with logistic companies to create a seamless flow from order placement to doorstep delivery.
The perfect example of this is drone delivery – enabling customers to place orders online and have their purchases transported within a matter of hours. The entire process is automated, eliminating the need for human intervention and reducing delivery times to a fraction of what traditional methods would require.
In 2024, drone delivery is expected to go mainstream with brands like Amazon, and Walmart opening more fulfillment centres to meet customer demand. Just wondering if our grandchildren will ever wonder why our generation used a multi-ton vehicle to deliver a 2kg package?
#5 Augmented Reality (AR)
The integration of Augmented Reality (AR) is transforming the way consumers interact with products, both online and in-store. It is yet another trend that elevates the shopping experience not only for nerds. According to Deloitte's report, 71% of shoppers express a heightened likelihood of increasing their shopping frequency when utilising AR-powered apps. Furthermore, 40% of consumers state their willingness to pay a premium if afforded the opportunity to test a product using AR.
If you’re trying to avoid crowds and opt for buying shoes online, you know how frustrating it is when the ordered size is either too small or too big (especially during sales when you risk missing out on the desired pair). My next shopping spree might be with Nike as this sportswear powerhouse enables users to customise and virtually try on a pair of Nike Air Force. Brought by the brand, the app filter encourages you to customise the colour and texture of distinct elements of the sneakers to then visualise a digital 360-degree overview of how the pair appear on your feet. Sounds like a lot of fun for customers and a lot of savings for Nike on product returns.
This trend takes other segments by storm, including cosmetic brands like BYX, Urban Decay with Instagram’s AR-powered makeup try-ons; or furniture, mastered by a Swedish retailer IKEA allowing customers to virtually place furniture in their homes before buying.
#6 Creator Commerce
Previously referred to as social commerce, this trend has emerged as the undeniable frontrunner. As social media platforms particularly: YouTube, Facebook, Instagram and TikTok facilitate our everyday interactions, social shopping tends to be intertwined with our daily lives. The transition from product discovery to purchase becomes fluid, as users can explore products, read reviews, and make purchases without leaving their preferred social network (e.g. Instagram shopping).
It is advisable for retailers to welcome the content creators into their fold and consider them as integral members of the brand community. They offer a fresh avenue for presenting products through genuine endorsements, fostering connections between individuals and products. This authenticity is a powerful motivator for consumers, fostering trust and influencing purchasing decisions.
Goldman Sachs predicts that the creator economy market will double in size within the next five years, reaching $480 billion by the year 2027. What’s more, it is expected that 50 million global creators will grow at a 10-20% compound annual growth rate during the next five years, so if you’re not a fan of influencer marketing, I have sad news as this trend is here to stay.
A great example of a brand that made the most of Instagram followers and personal branding is Kylie Cosmetics by Kylie Jenner. Through strategic use of social media platforms, she not only showcased products but also engaged with her audience, creating a direct connection that translated into millions in sales, making her the youngest billionaire in the world in 2020 claimed by Forbes (a title which she lost a year after, but that’s another story).
#7 Contactless and Frictionless Payments
As digital transactions become the norm, contactless and frictionless payment methods are gaining traction. In 2024, retailers are adopting innovative payment solutions that prioritise speed, security, and convenience. Facilitated by technologies such as near-field communication (NFC), e.g. Apple Pay or Google Pay. They eliminate the need for physical contact or insertion of cards by allowing customers to make transactions by simply tapping their contactless-enabled cards, smartphones, or wearables against a compatible terminal.
Retailers are embracing scan-and-go technology to provide customers with a frictionless in-store experience. This is a long-awaited invention for those of you that loathe grocery shopping in supermarkets, called for years a “convenience shopping”, which in reality has little to do with being convenient, when you have to load and offload your grocery basket several times before making your way out the store.
These days with “Just Walk Out” technology, Amazon let’s buyers shop as usual with cameras and sensors in-store registering what consumers take off the shelf, allowing them to leave the store while being charged for everything they left with.
Lastly, frictionless payment is expanding to new heights and allows users to “pay with their face” in store using biometric authentication methods, such as fingerprint scanning or facial recognition, which adds an extra layer of security overall. This controversial trend has been flagged by legislators in several countries, while only a few were able to put it into action.
So far, the grocery supermarket chain Carrefour in UAE enabled shoppers to pay ‘with a smile’ at the checkout counter. In Europe we might not be able to see this trend on the rise, as in June 2023, the EU parliament voted in favour of a total ban on live facial recognition in public spaces.
#8 Sustainable and Ethical Shopping
It’s great to see that consumers are becoming more conscious of the environmental and ethical impact of their purchases. Retailers are responding to these trends by embracing sustainability in their operations, from supply chain practices to product packaging.
It’s exciting to see some significant changes proposed by legislators with e.g. Digital Product Passport, which will be a game-changer among fashion, apparel and electronics industries promoting material traceability and energy efficiency. If you like to learn more about it, check out this blog article.
Among B2B tech companies, there are more vendors offering traceability software, which has a tangible impact on the sustainability standards, but also Product Information Management solutions (PIM), such as Bluestone PIM, which through centralised data retailers can make informed decisions about forecasting, minimising overstock, and ultimately reducing the environmental impact. Additionally, PIM software facilitates the efficient communication of eco-friendly product attributes, empowering consumers to make sustainable choices.
What’s worth mentioning is that sustainability practices are no longer considered as ‘nice to have’ but rather a strategically planned initiative that is fully executed under the scrutiny of consumer’s attention. An example of how the public is invested in such initiatives is a recent lawsuit against a prominent fast-fashion brand H&M for misleading consumers about the actual environmental impact of its offerings. The class action was later on dismissed by the courts, but it provides a perspective of severity in making such claims these days.
#9 “Quiet Luxury”
Consumers in 2024 are seeking products that exude sophistication through subtle design, high-quality materials, and meticulous attention to detail. This trend values the intrinsic beauty of products over branding. For example, Hermès, renowned for its quiet luxury ethos, epitomises this trend with its iconic scarves. These scarves are not defined by flashy logos; instead, they are recognized by their exquisite silk, intricate patterns, and the expert craftsmanship that goes into each piece.
The quiet luxury extends beyond products to encompass personalised and exclusive experiences. Retailers are curating intimate and tailored interactions with customers, providing a sense of exclusivity. Limited-edition releases, personalised services, and invitation-only events contribute to the allure of quiet luxury.
In 2024, the quiet luxury trend aligns with ethical and sustainable practices. Consumers are increasingly conscious of the environmental impact of their purchases, and retailers are responding by adopting eco-friendly materials, transparent supply chains, and responsible production methods.
#10 Voice Commerce
The rise of virtual assistants and smart speakers has paved the way for voice commerce, a trend that is gaining momentum in 2024. Voice-activated technologies are revolutionising the way consumers interact with brands, offering a seamless and hands-free shopping experience.
Leading retailers are integrating conversational shopping assistants powered by voice-enabled technologies. These virtual assistants not only understand and respond to user queries but also guide them through the entire shopping journey.
Shoppers can now effortlessly browse products, receive recommendations, and even make purchases using voice commands (e.g. Amazon's Alexa Shopping Assistant allows users to add items to their shopping cart, track orders, and explore personalised recommendations, all through the convenience of voice commands).
Furthermore, consumers can now use voice-activated product search through Google Assistant's Voice-Driven Product Search, which can present relevant product options, streamlining the search process. Integrating voice commerce into ecommerce platforms, provides a convenient and hands-free shopping option for customers.
#11 Supply Chain Resilience with Blockchain
Blockchain's ability to enhance transparency, traceability, and security is proving instrumental in building resilient supply chains. Blockchain's decentralised and tamper-resistant ledger system offers a secure and transparent means of recording and verifying transactions across the supply chain.
Walmart, a retail giant, has pioneered the use of blockchain to fortify its food supply chain. By implementing blockchain technology, Walmart ensures an unbroken and transparent trail from farm to shelf. In the event of a food safety concern, the origins of a product can be swiftly traced, allowing for targeted recalls and minimising the impact on consumers.
Some of the benefits of blockchain in retail supply chains include enhanced traceability, efficient auditing and last but not least reduced counterfeiting. Retailers can verify the authenticity of products at any point in the supply chain, safeguarding both the brand's reputation and consumer trust.
As retailers increasingly recognize the value of blockchain, the adoption of this technology is poised to become a standard practice, safeguarding the integrity of retail supply chains in a constantly evolving retail landscape.
Key Insights
Understanding and incorporating current trends enables retailers to enhance customer experiences, optimise operations, and introduce innovative strategies. Retailers who closely monitor and respond to trends are better positioned to capitalise on emerging opportunities, differentiate themselves, and sustain long-term success.
To wrap up, let's delve into three key reasons why staying abreast of retail trends is crucial for sustained growth and competitiveness:
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Adaptability: Allows retailers to adjust swiftly to changing consumer preferences, ensuring their offerings remain relevant and appealing.
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Competitive Edge: By embracing current retail trends, businesses can differentiate themselves in a crowded market and attract customers seeking innovative and up-to-date experiences.
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Customer Satisfaction: Understanding and incorporating retail trends enhances the overall shopping experience, satisfying consumer expectations and fostering loyalty.
Embracing trends and keeping up with changing shoppers' expectations will help you improve your customer experience. If you want to learn more about fool-proof CX strategies, check out our ebook.
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