What to expect from this year’s top challenges and retail solutions
Going into January each year, the retail industry gets to dig its talons into the juicy trends, topics, and tech at the NRF Showcase that help set the stage for what to expect over the next 12 months.
NRF 2024 hosted speakers from iconic retail brands like Saks Fifth Avenue and Saks OFF 5TH, Victoria’s Secret, SSENSE, Canada Goose, and Tapestry Inc. who all gave unique insight into their corner of the retail sphere.
With over 100 sessions and workshops, NRF 2024 gave us a look at this year’s hottest trending topics, challenges, and retail solutions as well as the strategies behind some of the world’s best retailers.
So, here are the top 5 retail trends we can expect as we head into 2024:
Trend #1: Consumer spending down due to tempered expectations on income growth
Consumers anticipate a decline in inflation over the short and long term, with one-year-ahead estimates at 2.6% and five-year estimates at 2.5%, according to the Federal Reserve Bank of New York’s recent survey.
However, despite easing inflation concerns, spending plans have been reduced and have dropped to the lowest level since September 2021.
This is due to a number of factors: Expectations for household income growth is only at 3%; the “Silent Depression” trending among younger consumers; the impact of inflation has already depleted savings for 8 out of 10 consumers, with only a minority expecting savings to increase in the near term.
This new cautious consumer has already begun to impact the retail industry. The 2023 holiday shopping season offered just a glimpse into what’s to come as spending growth was only half of what it was the year prior with a notable return to online bargain hunting and increase in Buy Now Pay Later (BNPL) as consumers try to stretch their wallets.
Trend #2: Generative AI hype dwindles as the emphasis on ROI intensifies
The hype surrounding generative AI is expected to diminish in the upcoming year, but the technology remains a focal point. Organizations, recognizing the gap between excitement and adoption in the first half of 2023, are now shifting their focus to implementing AI solutions that promise tangible returns on investment (ROI).
Leaders, armed with more experience, approach the new year with a strategic understanding of how to integrate generative AI effectively, prioritizing applications that ensure ROI, such as using AI behind the scenes to optimize store operations, such as identifying peak store times for scheduling the optimal number of employees or enhancing inventory management by identifying top-selling products and automating reorder processes.
Trend #3: Emphasis on leveraging data for customer engagement
In 2024, retailers are amplifying their reliance on data-driven strategies to secure consistent success in a fiercely competitive market. NRF 2024 workshops like Data-backed strategies driving predictable success, Drive enhanced customer experiences with the power of data, and Harnessing data to stay connected to consumers highlighted the emphasis on data going into the new year.
Through the strategic use of data analytics, retailers gain valuable insights into evolving consumer behavior, preferences, and emerging trends. This data-centric approach empowers retailers to make informed decisions, fine-tune inventory management, and customize marketing efforts precisely tailored to the unique needs of their target audience.
Central to this trend is the objective of staying closely connected to consumers, and data stands as the key in achieving this goal. Retailers leverage customer data to construct comprehensive profiles, delving into individual preferences, purchase histories, and engagement patterns which serve as the foundation for the deep personalization efforts outlined in Trend #4.
Additionally, the use of data-driven clienteling systems facilitates seamless communication with consumers across diverse channels, ensuring a cohesive and consistent brand experience both online and offline.
Trend #4: Enhance customer experiences through an empowered and connected workforce
Tying closely into the ideas seen in Trend #3, NRF 2024 workshops— such as Empower the connected workforce to deliver superior customer experience and The power of understanding customer & associate journeys in your store— emphasized the adoption of data-driven strategies to tailor approaches intentionally, with a specific focus on the pivotal role of an empowered workforce in implementing these personalization strategies.
The connection between these trends is even more apparent as retailers leverage data not only to understand consumer preferences but also to empower their workforce in implementing personalized approaches. The use of digital clienteling tools with cross-channel visibility into customer wish lists and online purchases enables store associates to act as 1-to-1 marketing channels, fostering a personal relationship between the customer and the brand.
In 2024, the retail industry recognizes the imperative for deep personalization, as loosely personalized approaches prove insufficient for consumer satisfaction and loyalty. According to PYMNTS research, the potential to sway consumer allegiance doubles when offers align closely with individual needs and interests.
Trend #5: Omnichannel retail strategies transform traditional retail models to meet the demands of digitally savvy consumers
The omnichannel retail trend continues to gain momentum as businesses recognize its significance in meeting the evolving demands of digitally savvy consumers. Again, NRF 2024 showcased numerous workshops on the trend including Mastering the art of omnichannel transformation, and understanding its business impact, The omnichannel imperative: Exploring the future of retail transformation, How retail leaders define the store’s role in unified commerce, and Redefining the omnichannel customer journey to name a few.
Retailers are actively investing in technologies that foster a cohesive integration of physical and digital channels, allowing customers to engage with brands across various touch points while still receiving a unified experience. The expansion of omnichannel capabilities in 2024 goes beyond the click-and-collect systems of the pandemic-era, with innovative solutions such as augmented reality in-store experiences and virtual try-ons gaining prominence. These advancements not only bridge the gap between physical and digital realms but also cater to the growing expectations for immersive and interactive shopping journeys.
As the retail landscape continues to evolve, businesses embracing and refining their omnichannel strategies position themselves not just as trend followers but as industry leaders responsive to the ever-changing dynamics of consumer preferences in the digital age.
Bringing it all together
As we reflect back on NRF 2024, we can identify the notable trends and shifts in the retail landscape in the coming year to include:
- A cautious consumer sentiment due to tempered income growth expectations, leading to reduced spending and a notable impact on the 2023 holiday season.
- The focus on generative AI is evolving, with organizations emphasizing tangible returns on investment and strategic implementations.
- Data-driven strategies take center stage, with retailers leveraging analytics to understand consumer behavior, personalize marketing, and empower a connected workforce.
- The omnichannel retail trend remains robust, evolving beyond click-and-collect to include immersive experiences like augmented reality, reflecting a proactive approach by businesses to meet digitally savvy consumers’ evolving expectations.
Learn more
Miss us at NRF but interested in learning about the retail solutions that will help you better prepare for the coming year?
Contact us today to learn more about Tulip’s mobile-first, cloud-based, omnichannel POS and the #1 Clienteling solution in the world that is loved by the industry’s most iconic retailers like David Yurman, Versace, Jimmy Choo, Mulberry, Saks Fifth Avenue, Ferragamo, COACH, and Michael Kors.
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