8 Retail Trends To Watch In 2024
Image Courtesy of Gentle Monster
Each year, global changes usher in shifts within the retail landscape. As specialists in the retail industry, we're sharing eight trends to watch in 2024 that are poised to shape strategies, elevate consumer engagement, and provide guidance for retailers in navigating the challenges and opportunities of the upcoming year.
1. In-store shopping to remain a crucial touchpoint
The Retail Insights & Shopper Sentiment for 2024 report demonstrated that Australian consumers continue to showcase a robust preference for brick-and-mortar stores, with ‘76% of the population favouring physical shopping’, a 3% increase from 73% of Australians in 2022.
Despite the increasing dominance of online transactions, customers continue to persist in cherishing the tangible and human dimensions of the in-store experience post-COVID. Whether they eventually opt for online purchases, the in-store shopping experience will continue to serve as a crucial touchpoint throughout 2024 as customers desire to assess the quality of products, engage in hands-on exploration and try out items before committing to a purchase.
Prediction: In-store shopping to remain a crucial touchpoint for hands-on exploration, product assessment, and informed purchasing decisions.
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2. Experiential retail will continue to grow
With in-store shopping maintaining a robust position, retailers in 2024 will continue to shift from being mere transaction hubs in-store to engaging spaces. Globally, a remarkable 81% of consumers express a willingness to pay more for an enriched shopping experience, expecting creative, health-focused, and virtual reality encounters in-store.
This shift is evident in the emphasis on workshops, demonstrations, and talks, marking a move towards physical stores becoming spaces for surprise and delight rather than mere product displays. Retailers will persist in allocating space for experiences over products, aligning with the omnichannel approach where online showcases the full range, and physical stores offer surprises and delight.
Prediction: Stores will continue to evolve from transaction hubs into experiential spaces focusing on enriched, creative, technological, and health-focused encounters.
3. More cohesive omnichannel experience.
According to a Lightspeed report, ‘45% of shoppers engage in online product research before making in-store purchases’, with an additional 17% reversing the process of viewing products in-store then purchasing online. This behaviour underscores the vital need for a cohesive omnichannel experience that bridges the gap between online and in-store retail. Ensuring pricing transparency across both realms is paramount, meeting customers' expectations of a unified shopping journey. Additionally, accurate stock information is deemed crucial by customers, with 42% checking online for stock availability before visiting in-store.
Prediction: Pricing transparency and accurate stock availability will be crucial for cohesive omnichannel experience.
Image Courtesy of Trinny London
4. Rise of medium-term pop-up stores
Pop-up stores have evolved beyond short-live ventures into medium-term setups that offer brands strategic flexibility and reduced risks compared to permanent establishments. The success story of Trinny London's extended pop-ups exemplify this shift, where initial 6-month setups transformed into enduring establishments at Bondi Junction and Doncaster Westfields.
The trend towards medium-term pop-ups is driven by a dual desire: gaining profound insights into customer behaviour and shifting towards direct-to-consumer strategies. Recognising the industry-wide importance of prolonged physical presence, retailers see medium-term setups as a means to understand consumer preferences deeply. These extended pop-ups are a valuable conduit, especially for brands without permanent stores, providing a unique opportunity to forge tangible connections, offering a hands-on experience beyond the virtual realm, ensuring a more immersive and memorable shopping journey.
Prediction: An increase in medium-term pop-up stores driven by a demand for deeper insights into customer behaviour.
5. Cautious consumer spending is poised to persist
The trend of cautious consumer spending is expected to endure throughout the first half of 2024. Faced with the ongoing cost of living crisis and the rise in inflation, consumers are exercising careful consideration in their expenditures, especially when it comes to nonessentials. This cautious approach is anticipated to present challenges for retailers facing difficulties in the coming months. As pricing and promotions maintain a considerable impact on purchasing decisions, the pattern of cautious consumer spending is solidifying into an established norm, significantly influencing the retail landscape in the early months of the new year.
Prediction: Cautious consumer spending will endure in H1 2024, driven by the cost-of-living crisis, challenging retailers with pricing considerations.
6. Recommence and sustainability will be a hot topic
In 2024, the retail landscape will persist in its profound evolution, with sustainability and re-commerce remaining at hot topics. Driven by consumer demands for authenticity and spurred on by government regulations, brands are embracing radical transparency. They not only openly share their sustainability achievements but also address challenges while offering critiques of other brands or government policies.
The re-commerce market, having reached a valuation of over $188 billion in the US in 2023, is set to reach nearly $276 billion by 2028. Industry giants such as Selfridges, H&M, and Uniqlo are spearheading this movement, with ambitious goals of having resale, repair, rental, or refills constitute half of their sales by 2030.
Prediction: A significant shift towards sustainable practices, reflecting the evolving priorities and expectations of both consumers and the retail industry.
7. AI will increase in use and personalisation
In 2023, the mainstream rise of artificial intelligence, exemplified by the release of ChatGPT, marked a pivotal moment in retail evolution. AI has swiftly become a transformative force, empowering retailers to reimagine various facets of their operations. According to a survey by Prosper Insights & Analytics, ChatGPT's impact spans diverse domains, with notable contributions in research tasks (37%), customer support initiatives (28%), and content creation efforts (24%) already significant.
Looking forward, AI's influence is poised to extend even further, facilitating dynamic, personalised engagement through approaches like "Marketing in the Moment” to offer to shoppers instantly, relying on historical data, contextual insights, and real-time actions. Retailers can anticipate a continued evolution in real-time customer interactions, facilitated by the integration of AI, opening new avenues for enhanced and responsive retail experiences.
Prediction: AI will continue to transform personalised engagements in retail from real-time interactions to responsive customer experiences.
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8. A fresh perspective to identifying data and trends
In 2024, the strategic use of proprietary data remains a key asset for retailers. Consider Pinterest Predicts, with an expansive user base of 480 million offering insightful trend analysis through its dedicated platform. The success of Pinterest Predicts is twofold, showcasing not only an impressive 80% accuracy rate over the past four years, but also seamlessly integrating vast datasets into visually compelling insights.
The transformative impact of data for retailers is evident in understanding how they and society effectively leverage the platform. For instance, in the case of Pinterest, it emerges as a crucial resource for innovative ideas and reliable forecasting. We anticipate retailers will increasingly harness their own data in novel ways, mirroring Pinterest's approach, whether it's accessing widespread data-backed trends at the societal level before committing to product development or enabling interactive exploration and purchase of products inspired by forecasted trends on their websites.
Prediction: Retailers will continue to embrace data-driven strategies integrating widespread data with existing resources to enhance decision-making and potential.