Retail trends for 2024
1. Recommerce revolutionizes shopping norms
In a conscious effort to promote sustainability and reduce waste, there will be a surge in the popularity of recommerce this holiday season. [I see] both businesses and shoppers embracing the concepts of buying used and secondhand, and reusing, reselling, and thrifting.
This shift reflects a growing awareness of the environmental impact of consumerism, with big brands like Lululemon already exploring initiatives like “Lululemon Like New,” which encourages customers to buy and sell pre-loved items and sets the stage for a more eco-conscious shopping future.
The trend aligns with the increasing interest in sustainable practices and the circular economy. With research revealing that 76% of global consumers prefer to shop with retailers that source services and materials in highly ethical ways, consumers will be attracted to businesses and brands that promote eco-friendly options, fostering a positive impact on the environment while enjoying quality products at affordable prices.
Small retailers can leverage this trend by taking a cue from Lululemon and offering like-new, resold items for promotional discounts. This can be through an online storefront, an in-store “resale clearance” rack, or other innovative ideas unique to their business and verticals.
As for the right mix of used and new, it’s important to follow the demand. Try to gauge the business activity of your local thrifts, consignment stores, estate sales, etc. It’s important to be data-driven and also speak to your customers to hear what they would like.
2. TikTok and live video shopping take center stage
The fusion of social media and e-commerce is set to reach new heights, mainly through platforms like TikTok. The rise of TikTok shopping will transform the social channel into the modern era’s home shopping channel and present exciting opportunities for e-commerce this holiday season and beyond.
What’s special about TikTok is that, if they launch their shopping solution like it is in China, it will encompass shipping and logistics—more comparable to Amazon’s business model than Meta’s.
Live video shopping will become a powerhouse for product discovery, where retailers and influencers will leverage its features to engage audiences in real time, showcasing products and offering exclusive deals. This trend will revolutionize how consumers engage with businesses and make purchasing decisions—the appeal of interactive and entertaining shopping experiences will draw in younger consumers, contributing to a surge in e-commerce sales during the holiday season.
3. A paradigm shift in returns and in-person shopping
With 16.5% of U.S. purchases resulting in returns, a significant transformation is expected in how businesses handle this expensive problem. Recognizing the sustainability issues with current return models, retailers may start implementing restocking fees to encourage responsible purchasing behavior and address the rising costs of processing returns. This evolution reflects a greater emphasis on conscious buying habits and aligns with the ongoing movement toward minimizing waste in the retail sector.
As a result of these changes to return models, more consumers are expected to move from online purchases to in-store, with 40% of global consumers already expressing their intention to increase in-person shopping because delivery costs are too high, according to a survey from PwC.
In response, big box stores will embrace a multichannel approach, pushing the in-person experience. While they maintain an online presence, these stores will encourage customers to pick up their online orders in-store, driving foot traffic and fostering an enhanced shopping experience. Offering unique in-store services and incentives that go beyond traditional shopping will help lure customers back to physical stores, even as e-commerce remains a dominant force in the market.
Data is just as crucial for small retailers as it is for large ones. Small retailers can begin by properly collecting and analyzing data around returns. For example, if an online retailer finds that sizing is the primary reason for returns, they may consider improving their sizing guides, implementing more practical product photography, incentivizing users to submit photos, etc.
Smaller businesses can also discourage excessive returns by charging return fees and highlighting final sale items. This should be balanced with maintaining an excellent customer experience, where data collection will be especially important.
4. Bespoke goods and local shopping flourish
Personalization is key in the evolving e-commerce landscape. Platforms like Etsy will shine as consumers seek personalized options and one-of-a-kind goods. Shopping local over choosing big box retailers will also gain momentum, fostering a sense of community and supporting small businesses. Consumers’ desire for unique, handcrafted products will redefine how businesses approach customization and cater to individual preferences.
5. Supply, fulfillment, and last-minute shopping dynamics
In light of the supply chain challenges witnessed during the pandemic, attention will turn to retail supply and fulfillment efficiency, with the upcoming holiday shopping season putting retailers to the test. The competition between in-person shopping and last-minute e-commerce purchases will intensify as consumers seek convenient and timely solutions for their holiday needs.
With the convenience of in-person shopping for last-minute gifts, e-commerce fulfillment and delivery services face the challenge of competing with the immediacy of physical retail. Rising to this challenge, e-commerce players need to prioritize logistics optimization and invest in technologies like automation and AI-driven inventory management to streamline operations.
Many software solutions utilize AI and machine learning to forecast demand, optimize production quantity, and catch anomalies. This is a lean production and distribution methodology, and plenty of existing inventory management tools are scaled for small businesses.
6. Elevating experiences via AI-driven customer engagement
At the heart of this transformative shift lies the seamless integration of AI-driven customer engagement tools. Cutting-edge AI solutions will usher in a new era of dynamic interactions between businesses and consumers that includes instant responses to queries, personalized product recommendations, and real-time insights into promotions and discounts.
According to Accenture, 64% of consumers wish companies would respond faster to meet their changing needs, which retailers now have the power to do. From order tracking to seamless returns, more businesses will integrate AI to enhance the overall customer experience, effectively addressing concerns, nurturing loyalty, and providing personalized assistance across every step of the customer journey.
Furthermore, AI-driven customer engagement tools will serve as conduits for collecting invaluable feedback and insights into consumer preferences and behaviors. This treasure trove of data will inform product refinement and empower retailers to elevate their services and hone targeted marketing strategies.