The top 10 explores the key issues which will affect the industry, the consumer and the way brands do business this year.
Consumer Behaviour
Calculated spending
With the economic outlook for 2024 not looking any brighter, shoppers will remain conscious about what they are spending. Value for money is key, but the definition of value will be different for individual shoppers and may change depending on the product category. Discounts and deals will still be a priority while for some consumers value for money will lie in product longevity and durability. Product story is another way brands will prove value to the consumer.
Unconscious shopping
Consumers are increasingly buying and discovering products while doing other things, such as browsing social media, playing games, and streaming content. This shift towards unconscious shopping will continue to grow in 2024.
Although a lot of unconscious shopping happens digitally, it also includes in-person events where the store is a stage.
AI
AI as co-creator
Artificial Intelligence is set to continue to dominate conversations and one area where its role looks likely to grow is product development. With more brands looking at applications for AI in their retail businesses, AI-designed products will start appearing everywhere.
AI & consumer data
Another way brands are using AI is to help customers find what they are looking for. This includes a shopping assistant customers can get personalised product recommendations from or ask questions. As more retailers introduce these tools, we are likely to see concerns around consumer data.
Physical Retail
Retail media comes to the store
Retail media networks – where retailers sell ad space on their digital channels to third parties are a growing part of many retailers’ income. This is spilling over into the physical store as retailers look to monetise these spaces.
Increase in medium term pop-ups
The pop-up store has become a permanent fixture within retail with a trend towards medium-term pop-ups. Instead of just a few days or a week or a month, pop-up spaces are opening for 2-3 months or a year. Brands know the value of physical retail but in a changeable world, a long-term commitment to a fixed store can be a risk.
Sustainability
Radical transparency
Brands are going to be more transparent than ever over the next 12 months in a bid to build better customer relationships. Customer perception will be a crucial factor in which retailers get their business, meaning brands need to be honest.
Brand-led positive change
Positive change led by brands will include helping customers to deal with challenges they face through a brand’s products, services, or initiatives. Consumers expect brands to help them to be more sustainable without huge price rises.
Operations
Supply Chain Resilience
Although the specific issues change, the global situation continues to be volatile and the next 12 months aren’t likely to be any different. Retailers need to build agility into supply chains and make them more resilient.
Investment into supply chain automation will form part of many retailers’ strategy for 2024 as they look to reduce costs, increase efficiency, and manage inventory better.
Inventory management will be under scrutiny
Shifts in consumer behaviour mean inventory management will need to be closely monitored in 2024. Customers are causing buying seasons to become longer around big holidays and key buying events as they look to spread spend. Longer buying seasons are also causing retailers to extend return periods.
Retailers will continue to invest in inventory management technology and real-time stock data to better manage these issues. This includes the potential to dynamically price items, reducing those where it looks like there will be excess stock.
Businesses are also adopting a little and often buying behaviour to help manage inventory and cash flow. Some of this is driven by excess stock in the market due to consumers buying less and delaying larger ticket purchases.
