Consumer spending trends have always been a black box that businesses have attempted to uncover.
Against the backdrop of a tumultuous retail year in 2023, marked by significant events, one element stands out as indispensable for maintaining a competitive edge: technological implementation.
In the realm of technological discourse, if conversations about artificial intelligence were prevalent in 2023, brace yourself for an even more pronounced focus in 2024.
This suggests the landscape is evolving rapidly, with nearly half (42%) of U.S. respondents planning to increase online spending over the next 12 months, as per a Bank of America survey.
As industries navigate unprecedented challenges, the integration of technology becomes paramount for survival and success, making it one of the most important elements to consider while tracking your retail business growth.
Technology is just one piece of the puzzle of the emerging digital landscape for brands.
Well, you are in luck today, as we set out to unravel the top 5 trends of the retail industry to look out for in 2024.
If you solve the puzzle one by one with these 5 trends ,the picture might just reveal itself.
Omnichannel management system
Looking ahead to 2024, we see physical storefronts and malls making a comeback. In a bid to drive in-store foot traffic, especially during peak holiday seasons, retailers are reviving physical locations.
2024 is expected to witness the most robust pace of growth for offline retail since the post-pandemic rebound observed in 2021.
Projections indicate that global retail sales will experience a substantial 6.7% growth in dollar terms by 2024, with brick-and-mortar stores anticipated to contribute to over 85% of the total sales.
But that doesn’t mean e-commerce is being left behind.
Digital-first brands are not only maintaining their robust online presence but also venturing into physical spaces such as pop-up shops and strategically located stores in key cities.
Fun fact! A substantial 64% of survey respondents disclosed that Amazon is their go-to platform when initiating a purchase, emphasising the e-commerce giant’s enduring influence. Industry giants like Shein are adapting to this trend, exploring the offline retail space by introducing pop-up store experiences. The increasing consumer demand for seamless omnichannel experiences help in fueling a resurgence in flexible shopping options and locations.
Hyper Personalisation
With the market flooded with opinionated and critical consumers, the era of hyper-personalization is upon us.
Retailers are increasingly incorporating GPT & other AI models to tailor their e-commerce and offline stores, ensuring a more personable experience for its customers.
Those adopting machine personalization have witnessed a notable revenue growth ranging between 6-8%.
With the help of AI, the coffee giant Starbucks uses real-time data to send users unique offers based on their preferences, activity and past purchases. With more than 400,000 variations of hyper-personalised messages to send, coffee lovers always feel as if their communication with the brand is tailor-made.
In addition, 78% of consumers stated they’re more inclined to buy from a brand repeatedly if it tailors its communications to their preferences.
Recommerce
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Re-commerce, a portmanteau of “resale” and “commerce” is set to play a pivotal role next year. Although retailers will focus on using new technologies to enhance customer experience, they’ll also be looking at new business models to grow revenue.
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A notable surge is expected in recommerce—a concept that emphasises the resale and repurposing of pre-loved items.
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This upward trajectory in recommerce reflects a growing shift in consumer behaviour towards sustainability and responsible consumption.
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A recent study by Barclaycard Payments shows more than 44% consumers buy more second-hand items than they did a year ago.
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In fact, recommerce growth is 16 times faster than traditional retail, with 66% of businesses expecting the percentage of turnover from recommerce to increase further in the next three years.
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Even fast fashion titan H&M has introduced a ReWear program that enables customers to sell used H&M apparel in exchange for a percentage of the sale price.
Retail media and advertising
A notable shift is occurring as retailers transition from merely selling products to individual shoppers to a more expansive strategy—selling to shoppers as a broader audience.
This strategic pivot underscores the growing influence of online influencers in shaping consumer preferences and decisions.
The impact of social media influencers is nothing short of remarkable, holding significant sway over the choices consumers make. Their ability to connect with and engage audiences has turned them into powerful advocates for brands.
As retailers embrace this change, successful promotions and strategic sponsorship campaigns emerge as key tactics in influencing and driving consumer purchases.
A study by Washington Uni suggests even just a 1% increase in influencer marketing spending resulted in an engagement boost of almost 0.5%.
Dollar Shave Club’s YouTube ad, boasting 27 million views, is a massive success.
The day it premiered, the server crashed from overwhelming website traffic. Within 24 hours, the company gained 12,000 new customers, generating $144,000 in annual recurring revenue at $1 per month for its subscription razor service.
Loyalty will always trend
It is imperative for companies to pinpoint their most valuable customer segments.
Understanding the driving forces behind shifts in shopper behaviour is crucial, as loyalty remains an enduring trend.
Identifying and nurturing loyal customers should be a priority for brands seeking sustained success in a dynamic market.
The average American consumer belongs to 16.7% of customer loyalty programs and in 2024, Loyalty programs, membership discounts and deals are all expected to be even more effective.
Nike shoes adorn the feet of celebrities, athletes, and everyday enthusiasts, creating a diverse and engaged community. Fueled by limited editions, collectibles, and hyped launches, Nike has cultivated a tribe of passionate shoe lovers who resonate with the brand’s ethos of “just do it.”
The brand’s strategy extends beyond product allure, encouraging brand advocacy through word-of-mouth and social media engagement.
Nike values customer feedback, driving a continuous improvement loop for their products.
With this holistic approach, Nike ensures repeat purchases and solidifies its connection with customers.
Although these trends are a must to pay attention, one integrating element will always outshine the rest: Convenience.
Threading the trends together through Convenience
Convenience means that customers can browse, purchase, and return products via their preferred channel, often with uniform pricing and promotions.
It is also crucial to recognize that not all shoppers will respond in the same way to economic shifts.
Consumers resonate with experiences that are streamlined and convenient. Retailers and brands must provide a seamless experience across all channels, including brick-and-mortar stores, online, mobile, and social commerce.
So start the new year with the right habits!
Keep a close eye on your Customer Lifetime Value (CLTV), establish seamless omni-channel pricing experiences, and prioritize the robust health of your brand. Deliver precise prices and promotions, tune into the voice of your consumer, and stay ahead of industry trends with BRIO, your cutting-edge AI dynamic software solution for 2024.
It’s not just a resolution; it’s a roadmap to elevate your business in the year ahead.
Book a free demo of our automated retail solutions or contact our optimization experts at info@sciative.com.
To see how brioanalytics.ai can empower your brand, ensuring it not only survives but thrives, visit sciative.com
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