Retail in 2024 – what can we expect?
As we step into 2024, the retail sector is poised for further leaps in the transformative journey of the last few years, fuelled by cutting-edge technologies, consumer-centric strategies and a growing commitment to sustainability. Many of these anticipated trends are organic progressions from patterns we have already witnessed in the current year. Let’s have a look at some of the key trends that are expected to shape the trajectory of the retail landscape in the coming year.
Immersive retail experiences: blending virtual and physical worlds
Online and offline retail channels will continue to blend in 2024 to create a seamless, omnichannel experience for customers. Traditional brick-and-mortar shops will continue to implement new technologies and experiences such as augmented and virtual reality to power solutions such as AR fitting rooms or product displays, interactive screens and in-store robots. We will also see the appearance of more virtual, 3D store launches that offer consumers an in-store experience from the comfort of their own home. Conversely, online-first retailers and brands will also increasingly explore in-person experiences for their customers through pop-up shops, curated events and collaborations with physical stores to deepen customer loyalty, gather insights and enhance the overall brand experience.
Sustainability continues to take centre stage: re-commerce and eco-friendly practices
Sustainability continues to play a major role for retailers, brands and customers alike. The demand by consumers for higher sustainability standards and measures has been cemented over the last few years and a lot are now expecting transparent supply chains, reduced carbon footprints and innovative ways to reduce the impact on the environment from the brands they buy. This sentiment is also fuelling the rise of ‘re-commerce’, a movement driven by a conscious effort to promote sustainability and reduce waste. Large and small brands alike are already offering returned and “as new” products for reduced prices, and this shift for pre-loved and second-hand items will resonate strongly with customers looking to support a more circular and sustainable economy.
Returns and in-person shopping
The importance of sustainability is also impacting the way consumers and businesses handle returns from online orders. With the significant impact returns can have on the environment, from increased carbon emissions due to shipping, to aggravated waste from returned products that are not sold again, online retailers might implement restocking fees or higher delivery costs, prompting customers to shift to a more in-store focused shopping behaviour, at least for certain product categories.
AI steering the course: generative AI and tangible value applications
Artificial intelligence made waves in 2023 and is now here to stay. Retailers are investing in AI-driven customer engagement tools to provide not just improved shopping experiences but personalized consumer journeys. Chatbots, AI algorithms for tailored product recommendations, and data analytics are becoming integral to refining offerings, developing targeted marketing campaigns, personalized assistance and building lasting customer loyalty. The emphasis is on real-time, customized interactions that transcend traditional shopping experiences.
And while the applications for AI seem endless and sometimes out of reach for smaller retailers, there is already a strong uptake of AI application with tangible, measurable benefits, such as AI translation, voiceovers and asset tagging – functions that not only capture attention but also drive business results.
Polarization of pricing strategies
The rising inflation and associated lower spending power in many countries over the course of 2023 has given private and discount labels a boost, requiring brands to compete through strategic price management. While this might include generic and personalized promotions, discounting and shrinkflation, a significant focus on premiumisation is also expected in 2024. Going the opposite direction, this strategy will see brands justifying higher price points through compelling value propositions. Regardless of the chosen strategy, retailers will need to invest in appropriate advertising and promotional materials to make their products stand out and have their message reach the intended consumer.
- Personalisation: The adaptation to local culture and context remains crucial for connecting with the right audience. Insights gained through new AI technologies, as well as easier adaptation through these new technologies, will make hyper-personalization much easier, but customers will also come to expect this, and brands will need to be careful of potential backlash when these expectations are not fulfilled or potentially even contradicted.
- Livestreaming & video marketing: a visual shopping revolution: Livestreaming is becoming a global trend, with Social Media platforms like TikTok positioning themselves as key channels for retailers and transforming the social sphere into the modern version of the home shopping platform. This type of video marketing is offering real-time audience interaction and immersive content experiences, making it appealing for both customers and brands alike. Streamed live events, product launches, and behind-the-scenes experiences will be key for brands to captivate their audiences, and we can expect more video content in classic shopping environments, with digital screens and new technologies such as transparent LED films for windows sharing space and integrating with classic Point-of-Sale displays.
- Influencer Marketing 2.0: The evolution from macro-influencers with millions of followers to more niche-influencers with a focused target audience continues and is allowing more and more brands to use influencers as a successful marketing channel. Brands will need to concentrate on establishing genuine partnerships that align with the values they aim to portray, while carefully navigating the complexities of the global stage that social media has evolved into in terms of diverse opinions, activism and the potential for brand damage.
Overall, 2024 is promising to be an exciting fusion of cutting-edge technology, eco-conscious practices and personalized interactions that will shape the retail experience in the years to come.
If you are looking for a full-service partner for your next marketing campaign in 2024, why not contact us to see how we can help?
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