As the retail industry embarks on a new chapter in 2024, a dynamic landscape of emerging trends and evolving consumer expectations is poised to reshape the way businesses operate and consumers interact. From the transformative power of artificial intelligence to the growing demand for sustainable practices, retailers must navigate these trends to stay ahead of the curve and capture the attention of discerning consumers.
In 2024, we can expect to see a continuation of these trends with several key developments shaping the future of retail. Here at Webloyalty, we predict just exactly what retail trends will pop up next year.
Try Before You Buy with AR
Over half of customers (51%) say the biggest drawback when shopping online is not being able to “touch, try and feel a product”. As the battle to retain and attract customers grows every year, the potential AR has to enhance the customer experience and provide a source of tangible competitive advantage is huge. We’ve already seen different industries such as automotive and beauty trial AR within their customer journey. But we expect to see a larger push for virtual “try-before-you-buy” features to help meet customers needs, whilst assisting with the longer term solution to reduce waste.
Abbi Lewis – Affiliate Marketing Executive
AI Bridging The Gap
Just like a few years ago when many thought we would be paid our salaries in Bitcoin one day (jury is still out on that one!), it’s all about AI in 2024. 3-4 billion people still have no access to the internet so for these AI systems to be shaping their world view based on input from only half the world’s population is going to prove problematic in the long term. In the short term, AI assisted tools can improve logistical planning for larger FMCG retailers looking to cut both costs and carbon emissions by having the right stock in the right place at the right time, fulfilling the needs of consumers whether they are internet enabled or not.
Anne Watson – Director of Partnerships, Northern Europe
Loyalty at a Price
With the threat of a recession at the door, consumers in 2024 will reduce their spend. This means in order to keep customers active, retailers will need to give more (or at least what is perceived as more). It is likely that more and more businesses will explore internal rewards programmes in an attempt to retain consumers inside their own brand ecosystem. However, as consumers become more alert to the real monetary value gained from loyalty programmes, they will only be effective if the reward is strong enough to beat the nearest competitor. This may be difficult to achieve for many retailers due to increasing prices hitting margins; however for the brands that have strong businesses efficiencies, 2024 could be a great opportunity to mop up market share.
Luke Robinson – Senior Manager, Business Development
2024 will see a larger focus on sustainability within the grocery sector. Solar energy is a fantastic way that supermarkets can harness energy – in fact, as part of its carbon-reduction plan to become ‘net zero’ by 2035, Morrisons will become the first supermarket to own and operate its own solar ‘farm’. Another way supermarkets are reducing their environmental impact is by switching to electric vehicles. Tesco recently became the first UK supermarket to use electric delivery lorries and has pledged to make its delivery service ‘fully electrified by 2028’. And single-use plastics rightly receive a great deal of negative press. As part of its shared mission to fight single-use plastic packaging waste, the UK Refill Coalition launched a pilot with Aldi UK at its Solihull store with refills being seen as a key component to tackling waste. This is just some of the myriad of ways supermarkets will become more ‘green’.
Dominic West – Managing Director, Northern Europe, Webloyalty
Retail’s Not Dying, Just Boring
The ‘retail is dying’ narrative may only be the case for boring retail. Shoppers still want an physical experience yet 70% admit they can’t remember the last time a brand excited them, so retailers in 2024 will benefit from creating highly interactive, engaging and entertaining experiences to inject fun into their bricks & mortar and digital marketing. IP collaborations (think Barbie-core dream house pop ups), can help drive footfall, while blending real world with CGI through ‘fake OOH’ advertising can go viral if done right (think the Maybelline campaign that had tube lines adorned with gigantic eyelashes).
Imogen Gartside – Senior Partnership Manager
Future of Fast Fashion
The evolution of fast fashion has been interesting to watch. The likes of ASOS and Boohoo have really taken a battering post-Covid from both their overseas competitors such as SHEIN and Temu and the rising environmental challenge. I am fascinated to see how they react and change and what that landscape looks like by the end of 2024. Fast fashion as a whole is facing increasing pressure from consumers and investors to improve their environmental sustainability credentials. This is due to growing awareness of the negative impact of this industry on the environment. It’s clear they will all need to continue to adapt and innovate in order to survive and thrive in the face of increasing competition and environmental challenges.
Richard Piper – Senior Director, Business Development
Essential Email Marketing
Email marketing is poised to capture a larger share of e-commerce revenue due to the rising cost of digital customer acquisition. Paid advertising costs are soaring, organic search reach is declining, and email marketing provides a cost-effective and personalised way to engage customers and drive revenue. With its high ROI and ability to foster customer loyalty, email marketing is an indispensable tool for e-commerce success and I think more businesses will prioritise this in 2024.
Thomas Grâce – Retention Specialist
Seamless Social Commerce
How many times have you been influenced by someone online testing out a product? It’s the same way retailers are now going to be focusing their efforts on social commerce, combining e-commerce with the power of social media. Instead of purchasing via multiple clicks, 2024 will be the year of browsing products, reading reviews and making purchases all on one social media app. With personalised engagement already a big part of how social networks keep you entertained, you’re already seeing ads of products you’ve browsed for previously, or even spoken about out loud! I think now we’ll go one step closer to a seamless age of being able to complete a transaction without leaving your social media platform.
Hiten Patel – Senior Manager, Digital Marketing
Rethinking Target Markets
Today’s retirees have spent most of their working life with the internet and after retirement they’ve got more time and (hopefully) money on their hands. On average they’re also less affected by rising interest rates as many have paid off their houses by that stage. Retailers should shift their focus (where relevant of course) to targeting people that fit within an older demographic. I would expect to see online shopping spiking in the older cohort over the next few years.
Nicola Slyper – Senior Partnership Manager
Rise of Retail Media
As margins tighten and retail becomes more competitive, e-commerce players are seizing the opportunity to grow by generating alternative revenue streams offered by retail media. Traditionally, retail media was found in-store by means of samples, eye-catching displays and a selection of outdoor-format posters. Over the past decade, a broad range of retailers have built their own retail media networks, offering paid media placements within or connected to a third-party retail ecosystem. Retail media will reach $160 in spend by 2027. The most successful brands are those which will be able to collect data and insights to help generate secondary revenue from sponsored product recommendations, branded landing pages, banner ads and more.
Martin Truong – Senior Director, Digital Communications
Of course, we cannot say these trends will definitely come to fruition but the state of the current retail economy certainly leads towards innovation playing an advantage when seeking additional revenue. Our report, The Constrained Consumer, touches on how we expect both retailers and consumers to behave in the age of increased cost of living and how incentives and rewards programmes play a major part in the retention of loyalty. With these exciting new trends to look forward to, let’s see how 2024 shapes up!