The retail landscape is undergoing a significant transformation. Fuelled by the volatile socio-economic environment, ever changing consumer preferences and rapid advancements in technology, you can understand why retailers are bracing themselves for continued uncertainty in 2024.
But 2024 holds promise for retailers as they explore the potential of emerging technologies, embrace innovation to improve in-store interactions, and seek revenue growth in new areas.
We spoke to five industry experts to get their take on the key trends that are expected to shape the retail industry this year.
Caroline Parkes, Chief Strategy Officer, RAPP
Vinted not skinted
2023: Looking on your phone in the changing room to see if you find a similar item for cheaper. 2024: Searching for it on Vinted.
The second-hand revolution is well and truly here and has been turbocharged by technology. Demand has soared for sites like Vinted, Vestaire, and Depop – brands that are continuing to meet customer needs in a cost-of-living crisis, and are often chosen over fast fashion sites that play a significant role in climate change.
This will have an impact on all fashion retailers, especially those with a younger demographic, including charity shops – 19% of Vinted customers say their unwanted clothes would have been donated to charity otherwise. That might be why RAPP’s own ‘thrift-shop’ charity initiative isn’t as well stocked this Christmas – our people are selling on Vinted instead!
Fewer self-checkout stress-outs (unexpected rage in the bagging area)
First adopted to make shopping more efficient, self-checkouts have become the bane of many consumers’ weekly shop. Disproportionately affecting women, who are more likely to shop in grocery stores, the self-checkout machines are responsible for the loss of 75,000 jobs and have made it easier for people to steal.
It’s clear that the self-checkouts dehumanize and make the shopping experience harder than it needs to be, so we can expect some retailers to do something about it. Here are a few who have already started:
- Booths (north of England’s answer to Waitrose) have binned them, in favour of improving service and focus on human connection.
- Dutch supermarket chain Jumbo have rolled out a super successful ‘chat checkout’ trial to 200 stores to help combat loneliness, and as a result introduced coffee corners, focusing on the human value of the shopping experience.
We can also expect brands to begin to tap into the use of AI to fuel the experience and make it smoother. For example, Woolworths Australia is trialling a technology where cameras watch shoppers as they pick up their baked beans or squish avocados, then at the self-checkout the item is identified by weight, to avoid scanning of barcodes and alleviate risk of theft.
Of-course, there are positives of self-checkouts for customers (not just shareholders) like neurodivergent people for example. But I predict that looking to next year, retailers will be doubling down on their bricks and mortar checkout experience, to create a better one for customers. The smart ones will be thinking about inclusion, and considering all members of their customer base.
Helenor Gilmour, Director of Insight & Strategy, Beano Brain
While fast fashion isn’t new, a trend we are seeing in 2024 is the tendency of value-driven Gen Alphas and their older Gen Z cohorts to allow their collective consciences to drift when it comes to bagging pocket-money friendly items from the likes of Primark, Shein and Temu – driven by posts on Tik Tok.
These two generations make efforts to hold brands accountable and try and engage with brands who align with their own values.
They’ll continue to criticise these brands, but our research finds that they also continue to be a favourite, particularly amongst tween girls, and take up considerable space on birthday and Christmas wishlists and feature in plenty of back-to-school-haul posts.
It’s clear that value is trumping values on this trend.
Any fast fashion retailers who could somehow marry pocket money prices with fair trade would be embraced by teens and tweens and would be a trend that would really fly.
Anthony Abou-Zeid, Head of Client Services at The Kite Factory
There have been seismic levels of disruption in retail this year with, you guessed it, AI and the world becoming more shoppable thanks to innovations from big social players like TikTok & Meta.
These advancements come alongside lessons learned on how to thrive under rising costs, supply chain issues and political instability. Not to mention the word rhyming with exit… Retailers have had to take stock, reset their ambitions and strengthen their fundamentals to be fighting fit going into 2024.
I predict the biggest trends impacting retail in 2024 will be:
1. AI in media & beyond
Further personalisation driven by the media supply chain coupled with a step up in optimisation of content and customer journeys will be a significant force. Retailers will have a more robust customer view which will improve the customer experience across brand touch points. The other side to this for retailers will see increases in profitability, driven by operational efficiencies, which will create value that can ultimately be passed back to the consumer.
2. Consumers buying less, buying better
If the pandemic era taught us anything, it’s that people will always buy stuff. From self-treating and wellness to splurging on luxury and travel, the appetite will always be there despite economic conditions – luxury retail is expected to have grown by 8% – 10% in 2023. However, it’ll be a fight for attention. Multiple drivers of change are shaping new consumption patterns as people buy less, buy better and buy in different ways.
3. The Fight for Attention
With more focus for consumer attention, creativity in advertising will be critical to winning the hearts of discerning consumers. For example, Asos is investing in brand building as it eyes a move away from ‘seductive’ performance marketing. Robust measurement capabilities and a focus on nuanced measures of success will give advertisers the confidence to go for impact and not just impacts, galvanising consumers into action.
Justine O’Neill, Director, Analytic Partners
It may be difficult to admit but, we are still looking at a year ahead of stagnation and slow economic growth in many markets like the UK. Brands need to push this fear aside and pragmatically adapt to current consumer behaviour in terms of price sensitivity, data deprecation and sustainability practices.
Brands are likely to need to build pricing power by strengthening their brands through advertising, to minimise any sting they, and customers, may feel. For example, for a billion-pound brand with a pricing action, £33 million in opportunity is gained if the business is also supported with strong advertising. Those who measure holistically will understand the true impact on their marketing mix.
Within that marketing mix, we expect RMNs to continue their rise and improve their offer with better and faster data, leading to drastically better implementation and integration . Some retailers will build partnerships to counterattack the large RMNs like Amazon; this might be a downer at first, as it will show more accurate (and likely lower) numbers on the impact of the retailer website. But it will also now consider the impact retail media has on other websites or offline sales channels.
With COP28 shedding light on the ongoing climate crisis, it’s even more apparent that people are attuned to sustainability practices. The UK has seen massive growth in recent years for retail sales of pre-owned goods, and it’s a growing industry at 5x the rate of overall commerce. We’re already seeing efforts from the low to the high-end and we expect this to scale. Aligning the media plan to this effort – aiming for ad net zero – is a 2024 must.
Ewald Damen, Creative Director / Managing Partner at Virgile + Partners
Yearly trend forecasting seems to become harder and harder as we live in a fast-evolving world and ever-changing consumer behaviour and demands. Increasing influences of technology and a multitude of retail and media channels are blurring boundaries between how to sell a product, provide outstanding service propositions and create brand loyalty. Pioneers in adopting new ways of selling and presenting themselves have really been able to set themselves apart from conservative price and marketing strategies and tap into customers desire to engage with retail in a more personalised and experiential way.
2024 will continue to see retailers adapt to new technology and choose between existing opportunities like Retail Media Networks. AI will for sure impact how we promote our products and possibly become a product category of its own. How this will manifest itself we need to see, but like with the Metaverse and NFT’s, retailers should keep their eyes on the ball and not ignore new and advancing tech, nor put all their efforts in one direction.
If anything could summarise a trend, then the advice would be to be aware and open minded to all channels and technologies and create a visionary strategy that amplifies necessary channels and technology to strengthen the overall brand. Past years have seen casualties where lack of innovation and creativity damaged brand loyalty as our discerning customer base is becoming even more aware and engrossed in advancing tech and experiences.