Retail trends 2024: Defining the future of retail
Retailers are eagerly looking forward to 2024. After battling with the restrictions of COVID in 2022 and the supply chain crisis in 2023, 2024 is finally going to give retailers a platform to plan, perform, and grow beyond these challenges.
Here are some of the key retail trends of 2024, some becoming a reality after being talked about much in recent years, and some becoming a must-have after being a good-to-have in the past.
I. Trending retail practices
1. Platformisation for scalability and end-to-end capabilities
Retailers are adopting platformisation for end-to-end capabilities, incorporating value-added services, granular component integration, scalability, and seamless data exchange. This facilitates communication between systems and extends applications as businesses scale.
2. Recommerce & profitable sustainability
As more customers are shifting their preference to sustainable products, retailers worldwide are more committed to their environmental responsibilities. The trend is no longer going to be a supplementary sustainability initiative but rather a profit driver for many retailers in the game.
‘Recommerce’ will see a boom in 2024, alongside adopting sustainable practices, reducing carbon footprints, and adhering to established frameworks and regulations.
Recommerce includes the sale of pre-owned products, especially high-end luxury products. Sales are driven by resale, repair, rental, or refills.
To gauge their impact and achieve periodic sustainability goals, consumer businesses are seamlessly integrating sustainability analytics into operations. This data-driven approach enables them to optimize energy usage and streamline efficiencies in response to the evolving consumer preference for eco-conscious retail experiences.
“The global second-hand market is expected to nearly double by 2027, reaching $350 billion”
ThreadUp Resale Report, 2023
3. Strategic investment in frontline talent empowerment
Acknowledging the pivotal role of frontline associates, retailers are heading towards increased investment in them. Retailers are prioritizing empowering their teams with data analytics, autonomy in decision-making, and the right technology for training. This strategic focus aims to cultivate high-performing sales associates, leveraging performance enablement tools for improved inventory tracking and personalized recommendations.
Retailers are committing to transparency in data sharing, fostering collaboration and collective growth. The industry is poised for a transformative shift, emphasizing the critical investment in frontline talent for sustained success.
II. Trending retail technologies
1. Customer experience and marketing with AI & ML chatbots, predictive search and analysis, and more
The biggest buzz in technology in 2023 has now opened new avenues of automation and efficiency for retailers. 2024 will witness AI being leveraged at its peak.
“AI-enabled ecommerce solutions are estimated to be a $ 16.8 billion market by 2030.”
InsightAce Analytic, 2023
i. AI & ML for enhanced customer experience
Chatbots are becoming the new frontline for customer interactions, providing instant assistance and personalized recommendations, while reducing human workload and costs to retail brands.
AI virtual assistants are becoming widely popular as they recommend products based on customer preferences and past purchase history.
Natural language processing (NLP), machine learning (ML), and deep learning (DL) in retail will help respond to customer queries more efficiently and also improve in-store operations.
AI-powered search engines make product discovery faster and more convenient for customers and help the right products reach the right audience, in just a matter of a few keywords.
Product recommendations using AI prediction technologies utilize first-party data to streamline UX, steering customers to exactly where they need to be and removing distractions along the way.
“In 2024, agencies will invest heavily to build bespoke, enterprise-ready AI solutions, formed by a combination of foundational AI models from tech partnerships, their own audience and creative intelligence, clients’ first-party data, and the brand’s standards.”
Forrester Predictions, 2024
ii. AI & ML for marketing
Gen AI is elevating content creation, providing marketers with the tools to generate dynamic and relevant material swiftly, and optimizing efficiency and campaign effectiveness.
Targeted marketing with personalized content has become way more quicker and efficient and reaches the relevant audience with the wider adoption of generative AI.
AI-powered customer behavior analytics is further empowering retail marketers to fuel their pricing strategies and offer dynamic deals and strong targeted marketing strategies.
Cost and pricing optimization in the storefront and while sourcing goods from suppliers is another important area of application for AI. This allows retailers to improve margins and optimize marketing strategies.
iii. AI-driven predictive analytics
Retailers will be adopting AI to increase supply chain efficiency with predictive inventory management and stock allocation.
AI-driven predictive analytics are revolutionizing inventory management with dynamic pricing and demand predictions.
Machine learning is playing a crucial role in fraud detection, and protecting retailers, especially in ecommerce. Algorithms can quickly identify low-intent buying behavior patterns, higher returns, fraudulent exchanges, and other suspicious account activities.
2. Retail engagement with virtual try-ons, Vcommerce, and AR/VR innovations
Virtual try-ons & product visualization are redefining customer engagement. They allow customers to virtually try products before buying, enhancing their decision-making process, hence reducing returns.
Scan & know technologies offer detailed product information, customer ratings, uniqueness of the product, and other such details for the customers in stores. It is a great means for retail brands to connect with their customers and reduce the workload on their in-store staff.
Vcommerce stores have great potential to delight customers with immersive experiences like scent & sound-based experiences, high-resolution 3D visuals, immersive videos, integrated product descriptions, zoom capabilities, fabric close-ups, and customizable options.
ii. AR/VR for marketing
Advertisements in retail will level up with the use of VR to create interactive ads with engaging gamification elements.
Product packaging is another area where marketers are leveraging the power of VR with dynamic QR codes or alternative markers. These empower shoppers to access additional details about the product they've bought or explore discounts and exclusive offers from the brand.
By leveraging data-driven product merchandising, AR/VR is enriching customer data and transforming retail marketing. Applications like VR headsets tracking users' gaze and sensor-equipped smart shelves help in-store merchandisers gain a profound understanding of consumer perception and intent, enabling the strategic placement of products within the physical space.
iii. AR/VR for process optimizations & efficiency
In-store navigation is transforming with the use of AR markers to identify the customer’s location and guide them to the desired product, aisle, or department using an AR-based mobile app.
Warehousing operations are enhanced by using AR/VR technologies. Employees use AR to scan an item with their cameras and get information about its particular shelf in a warehouse. VR empowers employees to envision warehouse layouts virtually, simplifying planning and facilitating more efficient distribution of goods.
The use of AR/VR for employee training in customer service, store design, and merchandising, is enabling retailers to provide remote, cost-effective, standardized, and engaging learning experiences and an efficient workforce.
“The global augmented reality in retail market size was valued at $2 billion in 2021 and is projected to reach $61.3 billion by 2031, growing at a CAGR of 41.4% from 2022 to 2031.”
Allied Market Research, 2022
3. Retail supply chains with blockchain and NFT
Blockchain technology helps in supply chain transparency by eliminating intermediaries and streamlining processes such as contract management and auditing, leading to substantial time and cost savings, crucial in a competitive industry with tight margins.
Retailers are now ahead of the game by launching their NFT collectibles, also integrating NFTs into physical products, and Metaverse bringing it all together.
4. Data-driven retail efficiency and customer insights with cloud platforms and big data
i. For efficient inventory management
Retailers today actively leverage cloud-enhanced inventory management, utilizing real-time data and analytics for predictive inventory forecasting. This minimizes stock shortages, offers a comprehensive stock view, optimizes supply chain operations, and captures real-time location data, and real-time updates from POS.
ii. For simplifying workflow, improving efficiency, and end-user experience
Moving the inventory data, orders, and shipping, cloud big data platforms help create a real-time exchange of data and result in a quick turnaround time for processing orders, restocking, and on-time fulfillment of supply.
iii. For better customer connect
Retailers are predicting trends and creating new products based on customer feedback. It helps communicate with clients in a better and more efficient manner and refine customer experience. It is a huge and efficient resource to understand the buying behavior of customers.
iv. For data management, security, and integrity
Customer data, inventory data, and analytical data are critical for retailers and it has become imperative to use cloud platforms to manage large volumes and safeguard such confidential business data.
Based on application, the global big data analytics in the retail market is bifurcated into sales and marketing analytics, supply chain operations management, merchandising analytics, customer analytics, and others.
“The supply chain operations management segment owns the highest market share and is expected to grow at a CAGR of 20.7% during the forecast period.”
Straits Research, study period: 2020-2023
In conclusion, the retail landscape of 2024 is a fusion of transformative technologies, advanced analytics, and a heightened commitment to sustainability. As retailers navigate the aftermath of COVID and supply chain challenges, the year unfolds as a platform for strategic planning and growth.
In line with the changing trends, Fynd is committed to offering innovative tech to global retailers. Check out the upcoming launches by Fynd in 2024 to learn more.