2024 TRENDS & PREDICTIONS
Finding the Balance Between Man, Machine and an Increasingly Empowered Consumer
Illustrations credit: Kit8 d.o.o. - adobe.stock.com
hit the ground running in 2024
As it has for decades, technology will play a major role in the retail industry in 2024, from generative AI to improved visual search and more powerful mobile apps. But retailers and brands will need to maintain (and even enhance)
the human touch in all their interactions with consumers, from the in-store shopping experience to burgeoning
Those are just a few of the prognostications Retail TouchPoints has brought together from 15 industry experts. These videos identify the key trends and tech that will shape consumer actions, and in turn the retail industry, in 2024.
The Bifurcation of Consumer Spending
Student loan repayments, higher interest rates, SNAP benefit cutbacks and lingering concerns about inflation are likely to impact consumer spending in 2024. However, there are other notable improvements, such as wage growth and a more positive labor market, which may encourage consumers to shop.
That’s why Coresight Research believes there will be a bifurcation of consumer spending in 2024. Retailers can prepare by investing in private label brand development, personalization and commerce services that give consumers the power to purchase more cost-effective options.
John Mercer, Head of Global Research and Managing Director of Data-Driven Research for Coresight Research
Welcoming Warm Human Interactions
44% of U.S. consumers have taken their business to another company because of poor customer service, according to research from Foresight Factory, and that number increases to 58% among millennials.
In 2024, brands and retailers will focus on consumers’ desire for “warm human interactions.” They will rethink the role of
AI-driven experiences and instead focus on using data to power more authentic and empathetic interactions that enrich consumers’ lives.
Noelle Weaver, Managing Partner - North America, Foresight Factory
Conveying Value Through Marketing
In 2024, the consumer will be focused on value. Although brands and retailers will need to ensure they have the right products at the right price, marketing will play a key role in communicating this value to shoppers across all channels. Marketers will need to:
Matt Collins, Director of Product Marketing, MNTN
Ensure all content and creative reaffirms value across all touch points;
Develop a process for implementing, learning and adapting creative based on consumer response;
Be prepared to respond to ad fatigue; and
Use and measure creative effectively to gauge marketing’s impact on the bottom line.
Acknowledging and Accounting for Consumer Power
Consumers are switching brands and pulling back on discretionary spending to invest in things that matter to them. For example, some are spending less in stores so they can buy concert tickets.
Many retailers are losing sight of this deeper context as they aim to understand and engage their customers effectively.
Retailers need to ignore linear assumptions around data and strive to understand the “softer side” of consumer behaviors — the emotional and psychological factors that impact their decisions.
Katie Thomas, Lead of Consumer Institute - Kearney
The Brick-and-Mortar Shakeout
The Economist’s research and analytics division, Economist Intelligence Unit, predicts that global retail sales will expand by 6.7% in U.S. dollar terms through 2024.
Inflation will be less of a concern over the next year, but because many consumers have depleted their savings, they are likely to employ aggressive price comparison and bargain-hunting tactics.
These economic realities will make 2024 a monumental year for retailers with a powerful physical presence. You can capitalize on this trend by investing in events, experiences and technologies to enrich in-store engagement.
Barsali Bhattacharyya, Retail Expert, Economist Intelligence Unit
Understanding Gen AI's Impact on Brand Trust
Generative AI is redefining how businesses innovate and use data to drive customer experiences. That is why we will see marketing collaborations evolve even further in 2024 to be more thoughtful and nuanced so they better reflect the unique values and attributes of all brands involved.
However, in 2024, Lawrence believes we will see retailers embrace gen AI to power video experiences, apps and services to create highly personalized and tailored customer experiences across the buying journeys.
Cristina Lawrence, EVP of Consumer & Content Experience at Razorfish
Leveling Up Supply Chain Strategies
Retailers need to completely rethink the seasonal model of inventory planning. They need to shorten planning cycles, improve forecasting, assortment planning and allocation.
By harnessing the power of real-time data and AI, retailers can reimagine both their people and processes to better respond to economic realities and changing consumer behaviors and expectations.
Rick Watson, Founder & CEO, RMW Commerce Consulting
Unlocking the Power of Collaborations
Collaborations are certainly not new
in the retail industry, but the success
of partnerships fueled by the Barbie movie shows how this space can
evolve to power more robust and immersive storytelling.
That is why we will see marketing and collaborations evolve even further in 2024, to be more thoughtful and nuanced in order to better reflect the unique attributes of all brands involved.
By extending this storytelling across digital and physical channels, brands can create a consistent and immersive journey for consumers.
Daniel Andersson, Chief Creative Officer of Futurebrand
Embracing Connected Media Moments
The growth and evolution of the media landscape is creating new opportunities for brands to converge authentic storytelling and performance marketing.
To create an integrated media experience, brands need to embrace a hybrid of channels and create highly relevant and authentic messaging that is consistent and resonant across all platforms. While brands should prioritize channels based on their consumer behaviors and preferences, key channels for 2024 will include:
Jess Hendrix, President and CEO at Saatchi & Saatchi X, Head of Retail Experience at Razorfish
Shoppable video; and
Merchandising Comes into the Spotlight
Retailers are on a quest to create more relevant and profitable product assortments. That is why in 2024, merchandising and planning teams will come into the spotlight and will need to transform the way they work to succeed.
Process innovation will enable these teams to put their customers at the center of product development, curation and planning.
Liza Amlani, Principal, Retail Strategy Group
Setting Sights on Visual Search and Mobile Apps
More than half (58%) of consumers prefer an ecommerce experience that is “to the point” versus “fun to browse,” according to research from CI&T. Although this data point indicates that many shoppers are mission-oriented and seeking a fast, seamless path to purchase, they still want to be inspired along that journey.
These contradictory expectations will inspire visual search and mobile apps to mature in 2024. Visual search will advance so it is more accurate, intricate and sensory driven, and retailers will make additional investments in mobile apps so they’re more differentiated from online shopping experiences.
Melissa Minkow, Director of Retail Strategy, CI&T
Balancing Automation and the Human Touch
Approximately 47% of consumers are comfortable using an AI-integrated tool to buy products, according to GWI research. Some brands, such as Chanel and MAC, have acted quickly to develop their own tools to power product discovery. AI has the power to support queries and personalized recommendations, and it also can be used to minimize checkout times.
Retailers will be able to leverage these diverse use cases but will need to be mindful of how they balance automation and the human touch, especially since some consumers are still wary of the technology.
Stephanie Harlow, Senior Trends Analyst, GWI
Social Commerce Soars
Brands are focused on building and nurturing their digital communities to drive long-term loyalty, and the momentum social commerce saw in 2023 will continue through 2024.
Platforms will offer more robust capabilities to support social shopping, consumers will be more eager to shop via livestream, and the metaverse will continue to evolve to enable commerce experiences.
Brands also will explore how they can use social platforms to launch limited-edition product drops, archival goods and other exclusive experiences.
Ruth Mortimer, Global President, Advertising Week
Hiding the Web3 Wires
Web3 was one of the hottest retail trends of
2022, but industry hype has undoubtedly cooled. While many executives balk at tech terminology like NFTs, the metaverse and Web3, they revel in the opportunity to create relevant, digitally integrated experiences.
That’s why 2024 will be a year when we
“hide the Web3 wires.” Companies like Nike, Starbucks and Alo Yoga will use Web3 technologies on the back end to design dynamic, engaging and loyalty-generating experiences.
Watch this video to learn how you can take cues from these companies and drive your brand toward the future.
Matt Maher, Founder, M7 Innovations
Spotlighting the Non-Influencer
Gen Z is flocking to TikTok to search for brands and content that inspires them. As a result, brands will continue to hone their strategies on this platform and repurpose content to amplify their presence across Instagram, Snap and other channels.
To support content creation and drive brand relevance, brands should focus on partnering with Gen Z creators who are expert content creators but aren’t necessarily “professional influencers.” This will help ensure that content is high quality and aligned to the capabilities of TikTok, but not too polished or staged.
Samantha Zink, Founder and CEO, Zink Talent
For More Inspiration and Insights
2023 Customer Loyalty & Personalization Benchmark Survey
Customer Service Tech Guide:
Can AI Rein in Costs While Enhancing the Shopper Experience?
2023 Store Operations Benchmark Survey
Read some of Retail TouchPoints’ top pieces of 2023 that dig deeper into the trends outlined in this report, so you can jumpstart your efforts in the New Year.
Harnessing Data and Analytics to Foster Brand Love
Turn Payments into a CX Differentiator
The Ultimate Guide to Unified Commerce
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