Looking back at 2023, retailers worldwide faced challenges with soaring inflation and restrained consumer spending. Despite these obstacles, technology emerged as a driving force, shaping the retail sector’s trajectory. As we enter 2024, technological advances and a recovering global economy present new opportunities for growth. Deloitte’s Consumer Signals platform indicates a decline in inflation concerns and an increase in spending intention, fostering renewed confidence among retailers.
The decisions made in 2024 will significantly impact long-term performance as the industry evolves. The trends shaping the retail sector are not merely indicative of the year ahead but are poised to define the future of retail.
Consumer Scepticism Amid Sustainability Focus
Sustainability has become a paramount concern for consumers. A McKinsey & Co. survey revealed that two-thirds of respondents, particularly millennials, consider sustainability when making purchasing decisions. However, this heightened interest has led to consumer skepticism, questioning businesses’ true commitment to eco-friendly practices, giving rise to “green fatigue” in 2024.
A Euromonitor 2024 Consumer Trends report emphasizes the need for businesses to substantiate their eco-pledges. Consumers are becoming more vigilant, scrutinising claims from brands and influencers. In 2024, authenticity is paramount, with consumers seeking proof of sustainable practices beyond mere marketing claims.
Small businesses, often more connected to the sustainability of their operations, can leverage this trend. Those who genuinely commit to environmental responsibility, transparently communicate their efforts, and actively engage with consumers will build trust and loyalty.
Integration of Physical and Digital
Improving customer experience remains a top priority in 2024. The concept of the “phygital” store, blending physical and digital retail strategies, is gaining prominence. Recognising that consumers seamlessly transition between physical and digital touchpoints, retailers are redefining strategies to create a cohesive customer journey.
Over the next 12 months, merging digital and physical realms will reshape in-store experiences. AI, virtual reality (VR), and augmented reality (AR) will offer immersive events, classes and demonstrations. Equipping employees with devices for accurate assistance and tailored recommendations based on customer preferences will elevate the personalised shopping experience.
Personalised Communication for Enhanced Engagement
In 2024, businesses are adopting personalized communication as a central strategy to enrich customer engagement. Attentive’s Mobile Consumer Report indicates that 91 per cent of customers prefer SMS texts from their favoured brands, while WhatsApp marketing boasts open rates between 98 per cent and 99 per cent. Also, Juniper Research shows that Chatbots are expected to generate USD 112 billion in retail sales by 2024 end.
AI-driven chatbots play a pivotal role in automating customer service queries and forging one-on-one connections with loyal customers. This targeted communication approach allows businesses to move away from generic social media broadcasts, customising messages to individual preferences and purchasing behaviours. The emphasis on personalised communication reflects the growing appetite for meaningful and pertinent interactions in the digital era.
Prioritising Data Security and Privacy
In the digital age, safeguarding personal information is a top concern for consumers. Retailers, recognizing the significance of data security and privacy, are investing in advanced cybersecurity measures. The key to gaining and retaining consumer trust now lies in transparent data handling practices. As consumers become more conscious of their digital presence, retailers must ensure the protection of sensitive data. In 2024, robust security efforts are not just a choice; they are a necessity for retailers committed to building trust in an era where privacy matters more than ever.
To Conclude
The year 2024 signifies a transformative phase for the retail sector. Beyond technological advancements, sustainability, the evolution of the phygital store, and the rise of personalised communication are trends that will shape the industry’s future. Retailers who genuinely embrace sustainability, curate immersive in-store experiences, and establish authentic connections with customers will distinguish themselves in this ever-evolving retail landscape.
About Author
H. S. Bhatia, Managing Director, Kelwon Electronics & Appliances (DAEWOO’s licensee partner in India)
