Retail Trends to Watch in 2024
Retail's always changing, and if you run a small or medium-sized retail store these days, just keeping up takes serious effort.
But staying ahead of trends? That feels almost impossible when you've got a business to run each day. Still, keeping tabs on where things are headed can make a huge difference come 2024.
Tighten your seatbelt- the next couple years promise surprises, challenges, and opportunities if you know where to look.
To help you get ahead in 2024, we’ll delve into the key trends shaping the retail landscape.
1. Personalisation Gets Hyper-Focussed With AI
Artificial intelligence has allowed retailers to take personalisation to the next level.
In 2024, AI-powered personalisation is enabling an ultra-tailored shopping experience.
With AI, retailers can analyse huge amounts of customer data to identify patterns and preferences. They use these insights to provide personalised product recommendations, tailored messaging, and customised promotions for each shopper.
For example, Sephora’s AI-based personalisation initiative recommends products for customers based on items they’ve viewed or purchased in the past. Their mobile app even allows customers to virtually “try on” different makeup looks. Based on the styles a customer prefers, Sephora can suggest complementary products to complete the look.
My personal favourite- the Dulux paint visualiser app. It's incredible.
AI also powers personalised emails and mobile push notifications from retailers like Macy’s and Nordstrom. These messages highlight deals on brands and products that customers frequently buy, encouraging repeat purchases. According to research from Econsultancy, over 70% of consumers appreciate receiving personalised offers and recommendations from retailers.
Of course, personalisation only works when retailers have access to customer data and insights. PricePoint IT for instance offers cutting edge analytics software to better understand and measure customer behaviour.
Retailers also offer loyalty programs and apps to further gain valuable information about shopping habits and preferences. In exchange for joining these programs, customers receive exclusive perks like personalised coupons, early access to sales, and members-only events.
While personalisation is not a new concept, AI and other emerging technologies are enabling retailers to provide experiences that are tailored to each customer's unique needs and preferences.
(Quote) As personalisation continues to become more sophisticated, the future of retail will center around highly customised interactions that keep shoppers engaged and coming back.
2. Resurgence of In-Store Shopping
After years of declining foot traffic and talk of the ‘retail apocalypse’, physical stores are experiencing a renaissance.
While e-commerce will continue playing a significant role, data shows online sales growth is stabilising.
The truth is, human beings crave real-world experiences that online shopping simply can’t provide. The sensory elements of browsing merchandise, touching products and interacting with knowledgeable staff create an emotional connection that boosts customer satisfaction and loyalty.
According to the National Retail Federation (NRF)- "E-commerce peaked at 19% of total retail sales in April 2020 but has since dropped to 15% - higher than pre-pandemic levels but lower than the 2020 peak. This signals the start of a balancing act between online and offline channels."
An Accenture study found that 73% of consumers prefer to shop in stores so they can see, touch and feel products. 67% appreciate being able to get products instantly without waiting for delivery.
Social interaction and entertainment also drive customers to stores. Trying on clothes, testing gadgets and sampling food are experiences that can’t be replicated online. ‘Retail therapy’ is real.
To capitalise on this trend, focus on creating an exceptional in-store experience.
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Provide product demonstrations, incorporate interactive technology like virtual reality and offer personalised service.
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For a more budget-friendly approach, offer customer experiences like ‘sip and shop’ evenings or personalised style advise for customers in-store.
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Train staff to engage customers and build rapport.
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Make sustainability and social responsibility priorities to attract younger, eco-conscious shoppers.
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Small retailers should double down on their strengths - community connection, curated selections and customer relationships.
In a nutshell, physical stores aren't going away anytime soon.
The future of retail lies not in the death of one channel over another, but rather in seamlessly integrating digital and physical channels to deliver a unified brand experience.
By improving your brick-and-mortar and digital stores in tandem, you’ll be poised to thrive in 2024 and beyond.
3. Imperative of Enhanced Security
In 2024, security has become an even higher focus for retailers globally. With increasing threats both online and in stores, protecting your business, customers, and data is critical.
Many retailers are investing heavily in security technology and software to create environments where people feel safe to shop.
Cloud-based security solutions, security robots, and radio frequency identification or RFID tags are some of the proactive tools retailers are using to deter criminal activity and boost safety. For example, department stores like Macy’s in the US, are using cloud encryption and tokenisation to shield customer information.
Retailers like Zara and Nike have implemented RFID tags, an advanced barcode system, to curb theft and significantly improve inventory management.
As retail becomes more connected, staying ahead of security risks is vital.
No approach is foolproof, but combining human insight with artificial intelligence and other emerging technologies allows retailers to take proactive, tailored action.
Continual assessment and adaptation are key.
Regularly evaluating risks, monitoring industry trends, and making appropriate changes will help ensure safety measures are as innovative as the technologies and techniques being used to compromise them.
For small and mid-size retailers especially, affordable managed security services can provide expertise and round-the-clock monitoring without the burden of high costs or additional staff.
In an age of increasing interconnectivity, proactively protecting people, places and data is no longer optional for retailers. Security has become an imperative, and an investment that pays off.
4. The Rise of Strategic Partnerships
In 2024, strategic partnerships are set to take center stage. For small and mid-sized retailers with limited resources, it can be a game changer.
Strategic partnerships are an effective way to pull together knowledge and resources, access new markets, and strengthen value proposition.
To stay ahead of the curve, forward-thinking retailers are forging alliances with companies that complement their strengths.
For example, in the US, Target and Ulra Beauty have joined forces to bring Ulta’s prestige beauty products and services to Target stores across the country. This partnership gives Target access to Ulta’s strong beauty brand portfolio and expertise while allowing Ulta to scale rapidly through Target’s vast brick-and-mortar footprint. It’s a win-win.
Closer to home, Illustrator, Karabo Poppy designed a limited edition Ricoffy tin. In the same month, Ricoffy was celebrating 50 years of ‘South Africannes’ and collaborated with Gert Johan Coetzee for a limited edition bucket hat.
In another example, Coca-Cola collaborated with Mr Price Coca-Cola is an iconic brand and so is Mr Price. A collab made in heaven and a clever way to cement each brand's cult status in a unique way.
Partnerships with delivery and logistics companies are also gaining popularity. Providing fast, low-cost delivery is essential, but building in-house delivery fleets is complex and capital-intensive. Instead, many are collaborating with third-party logistics companies to offer same-day and next-day delivery through existing infrastructure.
The future of retail lies in connectivity- not just between channels but between companies. Strategic partnerships are paving the way for unprecedented innovation in an industry that’s evolving at breakneck speed.
Those able to forge alliances will be poised to lead the pack in 2024 and beyond.
5. Fashion’s Resale Evolution
The fashion world is undergoing a remarkable transformation, fuelled by the rise of circular, accessible and affordable fashion.
Platforms like Depop, RealReal, Poshmark, ThredUp, and Yaga have made fashion more accessible, convenient and affordable. This transformation is not just a passing trend- it's a fundamental shift in the way we approach fashion consumption.
The numbers tell a fascinating story. According to Statistica, the global second-hand apparel market's value is expected to grow from USD $138 billion in 2021 to a whopping $351 billion by 2027.
Much of this growth is being powered by Gen Z and Millennials, who are embracing second-hand fashion due to its cost-effectiveness and eco-friendly appeal. The lower prices also mean that luxury items are within reach, contributing to the expansion of the personal luxury goods second-hand market.
For retailers, resale provides an opportunity to boost revenue and customer loyalty. Some are launching their own resale programs or partnering with third-party platforms. Others are incorporating resale into their business model from the get-go, designing high-quality clothing made to last multiple owners.
You’ll also see more retailers offering repair, rental and subscription services in 2024. Overall, the future of fashion will be defined by a ‘less is more’ mindset.
Customers want higher quality, ethically-made clothing that stands the test of time.
It's clear that sustainability, conscious consumer choices, and the quest for value for money in the face of shrinking wallets are at the forefront of the fashion industry's evolution.
Conclusion
Keep your eyes peeled in 2024 for these big retail shakeups.
As a small or medium retailer, you'll want to stay nimble and open-minded to keep up with the latest trends and customer demands.
The name of the game is anticipating what your customers want even before they know it themselves. Most importantly, don't be afraid to take some risks with new technologies, new partnerships or business models that could give you a competitive edge.
The retail world is not an easy one to navigate, but those who can move fast and think outside the box will have the best chance of thriving.