Exploring Key Retail Trends
For many retailers, the last few years have been incredibly challenging. The impact of the pandemic is still being felt and coupled with the war in Ukraine and the current economic climate – swaying shoppers to stores is no easy task. But resilient retailers know that paying close attention to key retail trends and investing in the right areas is key to thriving in the future.
The Current Landscape of Retail
We’ve seen some of the biggest names in retail leaving the High Street as a result of the tough operating environment. According to the Office for National Statistics, retail sales volumes in October 2023 were at their lowest since February 2021 when the UK faced extensive restrictions to non-essential retail.
Many retailers will also be looking to peak periods such as Christmas to recoup revenue lost as a result of unseasonal weather and our current cost of living crisis.
But it’s not all doom and gloom, as some retailers have bucked the trend and outperformed the market. These include Next which raised its full-year profit expectations from £30m to £875m and Zara, which recently announced plans for a 30% expansion to include new stores and an increase to some existing stores.
However, as households continue to face rising inflation, retailers need to double down on what’s working and look ahead to key global retail trends that will drive performance in the future.
Impactful trends for businesses of all sizes
Some of the biggest 2024 global retail trends include AI, store automation, live video shopping via social platforms like TikTok, increased use of personalisation, enhanced customer experiences, and a greater focus on sustainability.
Generative AI tools like ChatGPT have already impacted many industries and retailers will be looking to see where they can innovate using AI. This could include AI conversational chatbots to help customers discover new products or even workplace tools that leverage AI to flag inconsistencies between a store’s uploaded photo of window treatments and the best practice photo shared by head office.
Store automation will include the increase of self-checkout kiosks as well as automated inventory management systems.
Although traditionally Chinese consumers have been more receptive to live-stream shopping, TikTok’s continued growth will change this in the future. In fact, Ipsos research discovered 50% of TikTok users have bought something after watching TikTok LIVE.
Personalisation will continue to be of great importance. Salesforce’s latest report highlighted that 65% of customers expect companies to adapt to their changing needs/preferences. It also discovered that 80% of customers say the experience a company provides is as important as its products and services.
Finally, consumers are becoming more conscious about sustainability. Research by IRI and the NYU Stern Center for Sustainable Business (CSB) found that 77% of consumers believe sustainability is important when selecting products to buy, up from 69% in 2021.
Strategies for Adapting to Retail Trends
Adapting to these trends will require agility and innovation. Fortunately, many technology platforms like Cegid are already tuned in to the upcoming retail trends and are building them into the roadmap to help retailers stay ahead of the competition.
While automated inventory management systems and generative AI may seem overly complex to integrate for retailers who don’t have an IT team, there are plug-and-play tools that can take care of the heavy lifting.
Equally, retailers should look at the efficiency and management of their retail operations. While the social team might be responsible for driving live-stream shopping on TikTok, retailers need to ensure a joined-up approach to make the most of the growing popularity of the channel. Asking if this channel is integrated into their retail operations platform is a good starting point.
Customer experience also remains the best way for retailers to create a competitive difference. Retailers can create gamified quizzes to test product knowledge or arm store associates with tablets that contain information about products to ensure they have information at their fingertips. Technology can also be used to streamline common retail tasks so store associates are able to spend more time on the shop floor.
Finally, sustainability is growing in importance and retailers should consider how it fits into their entire retail operations. This includes knowing the provenance of products to being transparent about the supply chain. Forms, checklists, policies, and visual merchandising guidelines can also be digitised with a digital platform. Not only would this save paper, but we estimate that on average a store can spend as much as £200 in a year on printing. It might not seem like much, but for retailers with at least 250 stores, this could mean they are wasting up to £50,000 every year. But retailers don’t have to stop there. They should also consider if their supplier is committed to reducing its carbon footprint. Something we take care of with Cegid Retail ecosystem’s products.
While there are still challenges ahead in retail, these future retail trends will have a big impact in 2024 and retailers who are able to adapt to them will be more resilient in the long-term.