By: Yael Kochman
I’ve always been fascinated by the intersection of retail and technology.
After years of trying to pitch retailers to implement more innovative technologies, I feel like in 2024, for the first time, they don’t need to be pitched.
Every retailer I know is out there searching for the best technologies to give his company the edge they need. With consumers now demanding better experiences, succeeding in retail becomes ever more complex. The lines between online and offline are blurring more than ever. We’re not just browsing online and buying in-store anymore. Now, stores are becoming experience hubs – and e-commerce stores are becoming more dynamic and conversational.
These parallel, and almost diverse trends, alongside evolving customer preferences and economic uncertainties like high inflation and global conflicts, pose challenges for the retail landscape. So what are the retail trends we must be aware of in this context?
Live Commerce
Live commerce is an industry that ended at $31 billion by the end of 2023. Retailers and brands can run live shopping events with the product lineup in their e-commerce stores, focusing on hero products or other seasonal specialties, with a live shopping host, that humanizes the online shopping experience by enabling real-time interactions, product demonstrations, and exclusive promotions. It fosters a sense of urgency, driving immediate sales, etc.
Social media platforms can work for live shopping events, but oftentimes they have too many changes, and lack giving brands and retailers the control and data to provide end-to-end attribution. Users are not turning to social media platforms for shopping, and for brands placing inventory on them is challenging. This is where platforms like buywith come in, enabling a seamless integration onto a brand or retailer’s e-commerce platform so that they can have control. To see how brands can get started with livestream shopping, check out our 6 tips on getting started.
Sustainability, Circular Economy and Re-Commerce Are Taking Over
Sustainability and re-commerce are gaining traction, driven by Gen-Z values, with retailers incorporating resale programs and sustainable practices to address environmental concerns. The rise of this retail trend is by Gen-Z, with 70% stating that sustainability is a key motivating factor when buying fashion items.
The circular economy encourages second hand purchases, prevalent in the luxury fashion market, whereas sustainability within the supply chain is a trend focused on across the manufacturing process. Brands like CSD, Hewi and The Real Real are doing this and contributing to the trend which is growing at the rate of 5X the rate of overall commerce. The market for pre-owned goods and resale is expected to reach $250 billion globally by 2027.
Aside from it being a trend of fashion and timelessness, it is also a signal of sustainability. Rebuying makes consumers feel more conscientious about their purchases, and in many ways, sustainability is thus coming to the forefront. For example, Carhartt is partnering with re-commerce platform Trove to boost sustainability efforts with its new resale program. The goal is to help reduce clothing waste and keep apparel out of landfills. The Carhartt Reworked program features its own e-commerce presence via a branded resale site. Lululemon has also teamed up with an enviro-tech startup, Samsara Eco, to reduce waste across its value chain by leveraging lower-impact alternatives into essential materials.
Advanced Payment Methods and The Next Gen BNPL Schemes
The payments industry is changing the relationship between merchants and consumers, providing more advanced technology and flexibility. Offering a variety of payment methods, including soft POS, mobile POS, buy now pay later, installments, and peer-to-peer apps, has become table stakes. The goal of additional payment methods isn’t purely to offer customers flexibility and options, but also for in-store employees to be able to facilitate a better customer experience and drive loyalty.
For example, Amazon, expanded its proprietary palm-based payment system across its network of more than 500 U.S. In August, Whole Foods Markets launched the Amazon One-enabled contactless checkout solution across all 65 of its California stores. Transitioning to contactless payments, Sephora partnered with J.P. Morgan Payments to enable Tap to Pay on iPhone across all its U.S. stores, eliminating the need for card readers or physical terminals.
People, however, are divided on the payment trend, thinking that it adds to the ‘clutter’ at checkouts. Multiple payment methods lead to increased conversion, but come as a security concern for users, who might prefer PayPal. Offering payment plans can attract new customers lured in by introducing zero-interest plans, but may be a deterrent to loyal customers just looking for a simple checkout process. Some fintech companies are offering bespoke payment products to cut down clutter while providing diverse payment plans, including longer-term financing options. Payment providers like Affirm and SplitIt are partnering with retailers to offer integrated solutions and white-label installment services.
Have you Had Enough About AI?
As you might have already heard, Artificial Intelligence (AI) is here to stay. It is much more than a buzzword though, but a significant disruptor in retail, improving the pre-purchase shopping experience, enhancing customer interaction efficiency, and driving innovation for personalization. With the right AI technology, retailers can leverage AI to deepen customer loyalty through micro-segmentation and community building.
“The biggest impact on commerce will be the impact GenAI will have on making digital commerce more tactile to confidence inducing, something that heretofore had only been the purview of physical retailing.” – Chris Walton, OmniTalk
Ulta is using generative AI behind-the-scenes in the supply chain, as well as to streamline and automate tasks such as writing product descriptions. Stitch Fix also tapped an artificial intelligence-powered buying tool for its supply chain efforts, helping to drive informed decisions and keep assortment up to date with changing consumer demands.
“We already see improved keep rates in the initial phase, and we expect this tool to be utilized in more than 50% of all units ordered by the end of fiscal year 2024,” said Matt Baer, CEO of StitchFix at NRF.
However, the views on AI are polarizing, as some feel there might not be enough that AI can significantly change.
“It’s frustrating that tech vendors jump on every bandwagon that rolls into town and hype the hell out of it. It happened with the Metaverse and now it’s happening with AI, and the ironic thing is that AI WILL change the face of retail but it will happen in its own way. Forcing it is unnatural and artificial (pun intended).” – Andrew Busby, Redline Retail
Creator Commerce and How It Impacts Retail Trends
Content creators play a crucial role in the modern retail landscape. Consumers increasingly rely on community experts for product recommendations, making content creators the cultural leaders of the 21st century. The creator economy market is expected to double in size by 2027.
Content creators are key to a brand community with authentic endorsements, fostering connections between audiences and products. This authenticity is key here, and Goldman Sachs predicts that the creator economy will be $480 billion by the year 2027.
Instead of just being the influencers of the 2010s, content creators are now driving commerce, through the onset of paid partnerships on social media platforms, tutorials on the likes of YouTube, inter-platform shops like TikTok Shops, and live commerce, where they can directly drive revenue for brands by reducing the consideration phase in marketing. To see how this works with buywith and our content creator community of vetted and trained live commerce experts, check out our Top 100 Influencers Report.
Multiculturalism’s Impact on Retail Trends
Related to the creator economy is the trend of multiculturalism in a retail context. The shift in demographics, with non-Hispanic whites becoming the minority in the U.S. by 2050, will redefine the general market. Retailers need to tap into intelligence on multicultural consumers for future success.
In order to avoid marginalizing any groups and ensure that the creator economy is welcoming to all. Brands have mandated featuring people with different backgrounds, body types, and ethnicities in marketing campaigns. The need for diversity is both in front of and behind the camera.
“The world is huge, and influence and advocacy don’t look the same in every market,” says Anusha Couttigane of Vogue Business, who during her talk at NRF suggested that when conducting influencer marketing, it is key to combine influencers with cultural moments.
Hyper-Personalization
Brands need to deliver hyper-personalized shopping experiences to reduce the friction in the shopper cycle, from showcasing options to checkout. As brands try to humanize what was once taken over by chatbots, there is a rise in retail for select customer groups: VIPs, loyalty shoppers, or those who need a more personalized shopping journey.
Large brands like Macy’s use personalized product recommendations on all avenues from email, SMS, push programs, on-site, app experiences, paid media, etc. which drive relevance and yield greater engagement from customers through a personalized experience, as per Macy’s SVP of Customer Journey, Bennett Fox-Glassman.
“Personalization at scale is an emerging trend that is extremely challenging to provide. However, this capability is crucial to get right as consumers are shopping across a myriad of commerce channels (in-store, e-commerce, social commerce, live streaming etc).” – Brandon Rael, Rethink Retail
This is where buywith’s one-to-one live shopping solution has showcased an increase in conversion rates, suggesting its significant potential as a tool for personalized assistance and enhanced customer satisfaction, akin to being a personal shopper, a consultant for advice and reducing product queries, and an extension of customer support. One-to-one live shopping empowers retail brands to deliver tailored experiences instead, which is a refreshing change. This personalized touch elevates the overall customer experience, making customers feel valued, heard, and deeply connected to the brand. Learn more about one-to-one live shopping and how it relates to personalization.
Are there any downsides to personalization? Sometimes.
“The personalization paradox is that too much may become a bit creepy, yet too little provides no value to the customer. It will be an evolving operating model that will provide value to consumers, associates, social media professionals, and others.” – Brandon Rael, Rethink Retail
Final Thoughts
Amidst many retail trends, these are the ones I personally find most relevant as they imply that retailers need to be adaptable and not rigid, ensure they craft a distinguishing identity and maintain a competitive edge, and truly understand what drives customer satisfaction.
The future of retail feels less about just transactions and more about creating connections – and that’s a future I’m excited to be a part of.
