Retail Industry Trends

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In 2024, it’s all about connecting with your customers – anywhere they are. And giving them that super personalized experience they love? That’s a must.

Sounds like a lot, right? Luckily, tech is here to save the day (think AI, not robots…yet).

So, let’s dive into the trends shaping retail in 2024. We’ll break down how shopper behaviors are changing, how tech is making waves, and what’s up with the economy (because it matters).

Here’s a sneak peek at nine trends you absolutely need on your radar:

1. In-Store Shopping Makes a Comeback, But Online is Still #1

Physical stores are still in the game. After being stuck at home, we’re all  craving the chance to actually browse the aisles again. But while online sales took a dip in 2021 (down to 14.3% from a crazy 31.8% in 2020), guess what? Traditional stores actually outsold that number, hitting 18.5%.

With the fear (and threat) of COVID receding, we’re seeing in-store foot traffic climbing.  But will they ever hit those old, pre-2020 highs again? Probably not.

See, we’ve got super comfortable ordering products online – for some of us, it’s the new normal. In fact, a UN study found that online shopping has increased between 6%–10% of all retail products.

The result? Stores are turning into these weird hybrid spaces – part pick-up centers for online orders, part places to touch and feel the goods. And the online spending spree ain’t slowing down – experts predict that a huge chunk of our cash (like 24.5%!) will go to online stores, totaling a crazy $7.385 trillion bucks.

2. AI: The Secret Tool for Boosting Sales and Saving Money

Running a retail business is tough. Staying competitive means focusing on profits, keeping things running smoothly, and building a base of loyal customers. Every edge you can get matters.

That’s where AI comes in – it can streamline operations like inventory management, demand forecasting and much more in major ways that can boost your bottom line.

Retail AI services are a booming market, expected to jump from $5 billion to a massive $31 billion by 2028!

But does it actually work? You bet!

Studies show that retailers who embrace AI see some seriously impressive numbers. We’re talking 3-15% higher revenue and a 10-20% boost in their sales ROI.

So, how’s AI working this magic? Let’s break it down:

Personalized Recommendations

We all love feeling special, especially when shopping. 71% of customers expect companies to offer them personalized experiences, while 76% get annoyed when this doesn’t happen.

Retailers are getting wise to this – Deloitte says half of them are making personalized recommendations their top priority in 2024.

Think of these AI-powered engines as your own shopper, suggesting things you’re likely to buy.

AI Cuts Costs and Improves Efficiency

Retailers love AI because of its ability to streamline everything. We’re talking inventory management, catching shoplifters, and adjusting prices on the fly.

Result? 72% of retailers using AI are already seeing costs go down.

The Supply Chain Savior

A consistently streamlined supply chain with minimal stock outs might seem impossible, but AI can transform your operations. In fact, McK0insey reports that AI-powered forecasting can slash supply chain errors by up to 50%, boosting product availability, and minimizing lost sales.

That’s not all! AI can also help trim your warehouse costs by 5-10% and cut admin expenses by a whopping 25-40%.

Even retail giants like Walmart are jumping on the AI bandwagon.

AI helps Walmart predict exactly how much of each item customers will want.

This means fewer empty shelves and less stuff gathering dust in the back.  Plus, AI keeps their warehouse operations running smoothly, which saves them a ton of cash!

3. The Rise of Same-Day Delivery

We’ve all been there – staring at our phones, waiting for that package to arrive. That’s why same-day delivery is becoming a trend. Need proof? Here are some crazy stats:

  • Almost 53% of customers online are willing to pay extra for same-day delivery.
  • Gen Z especially loves speedy delivery. In fact, 50% of them are willing to pay for same-day delivery

But wait, it gets crazier. Drones might soon be dropping off your packages. In fact, 500 million commercial drone deliveries happened in just the first half of 2023 – and that number’s about to skyrocket!

Amazon’s been testing drone delivery for a while, even for medicine now! (Imagine your meds arriving in under an hour)

Even Walmart’s not far behind. They aim to deliver drones to 75% of the Dallas-Fort Worth area by the end of 2024.

4. Hybrid Shopping is the Future

You’ve heard of online shopping and brick-and-mortar stores, but what about “phygital”? This buzzword describes the blend of physical and digital shopping experiences, and it’s getting huge! Why? Because shoppers have different needs – Boomers often prefer that in-store feel, while Gen Z is all about online convenience.

Studies show 95% of consumers check out products online before buying! Plus, 58% are willing to pay more for something from a brand with positive reviews.

So, what does the future hold? In 2024, the winners will be the retailers who master the “phygital” game. Imagine browsing for new shoes online, and then heading to the store where they have a selection ready for you to try on, all based on your online activity.

That seamless experience is possible with smart inventory systems, fancy customer tracking tools, and a whole lot of tech magic!

Sephora is a prime example of  it. Whether you’re in-store or using their virtual makeup app, it’s all about trying before you buy. Their success backs up this claim: younger shoppers want the store experience to feel as hands-off as online. Give them cool demos, let them explore, and they’ll ask for help when they want it!

5. Retailers are Betting Big on Automation

You know how hard it is to find good help these days? Retailers do, too, so they’re turning to automation in 2024. It means using retail technology to handle those repetitive tasks that take up so much time.

This is especially crucial for stores, warehouses, and almost every part of the retail world.

McKinsey reports that over 52% of retail work can be done by machines we already have.

It’s about reducing errors, improving service, keeping employees focused on the important stuff, and saving money. In a tight retail landscape, stores need every advantage they can get.

The coolest part is that AI, ML, and robotics are getting incredibly advanced. We’re not just talking about machines following instructions but making smart choices based on what they “learn” from customer data. Think of software that figures out the perfect deals to offer you, on the channels you prefer, because it analyzes your shopping habits.

Here’s how automation is bringing change in different sectors of retail:

  • Shopping In Store: Expect more self-checkout (sometimes a lifesaver!), shelves with digital price updates, and maybe even cleaning robots quietly doing their thing.
  • Warehouses: This is prime robot territory – loading trucks, scanning products, and even drones buzzing around to count inventory!
  • Behind the Scenes: It’s not just physical robots. Software bots help with customer questions, manage invoices, keep track of stock, and power those personalized marketing campaigns.

6. AR is Making Shopping Easier And Fun

AR (augmented reality) used to feel like something from a movie. But now? It’s seriously changing how we shop, especially after the whole pandemic pushed online shopping into overdrive.

Imagine this – you’re scrolling for new kicks, and wouldn’t it be awesome to see how they look on your feet without getting dressed? With AR, you can! Just point your phone, and boom, instant try-on.

Makeup and clothes are where the “virtual try-on” thing is blowing up.  Think of apps that let you see how a  lipstick looks without the mess or those fancy dressing room mirrors that change your outfit in a flash.

L’Oreal and H&M are just some big names that are getting into action. Plus, studies show that 60% of millennials are happy to spend more if it means trying clothes or products virtually.

But AR does more than virtual try-ons:

  • Visualizing products: Picture this: You need a new sofa, but will it fit your living room? AR lets you see it right there on your phone before you buy. Brands like IKEA are already doing it.
  • In-store adventures: Some stores are getting creative, using AR to make shopping feel more like a game – who doesn’t love a little extra fun?
  • No more wandering: Big box stores can be a maze! AR apps can be your personal guide, showing you exactly where those lightbulbs are hiding.
  • Spreading the word: AR can be a blast. Snapping a pic of yourself with virtual puppy-dog ears? That’s basically free advertising for the brand!

The numbers back it up – 56% of shoppers say they’re more confident about a product after an AR experience. Plus, it helps people feel good about their choices, improves customer engagement, and even means fewer returns. That’s good news for shoppers and stores!

7. Social Shopping is the New Storefront

If you want to sell your products, you have to be where people hang out most ,and that means social media. The average person spends about two and a half hours (143 minutes, to be exact) on these platforms daily, and that number is climbing.

The longer people scroll, the more important it becomes for businesses to nail their social selling strategy. Brands without one are missing out – studies show shopping on social media is set to grow three times faster than traditional ways of selling in the next three years.

Why the hype? Two big reasons:

  1. Easy Checkout: No more getting bounced around – customers can buy directly on their favorite platform.
  2. Influencer Power: Micro-influencers are the new word-of-mouth. Studies show 79% of Gen Z shoppers are swayed by recommendations they see online.

The key to success? Don’t go for the hard sell! User-generated content and ads that blend in with regular posts are the way to go. Make it feel authentic, not a total sales pitch.

8. Smart Tech is becoming the New Battleground for Retailers

If you own a physical store, getting on board with some smart tech is necessary. The first thing to look at is how to keep track of what you’ve got in stock – that’s where RFID and QR codes come in.

Basically, these RFID tags and QR codes are like little labels for your stuff. They are like the secret codes that help stores know exactly what’s on the shelves without digging around.

Fashion stores like River Island are already using RFID. Customers can scan a tag in the dressing room, and bam! A screen shows different sizes, colors, and all that good stuff.

Need help finding something? Hit a button, and someone brings it right to you. No more yelling, “Hey, do you have this in a medium?”

Speaking of smooth shopping, over 61% of Gen Z and 70% of millennials prefer retailers with contactless checkout facilities. That means letting customers check out on their phones – way better than standing in line forever!

Moreover, you can also use cameras and sensors to see how people shop. Stores can figure out which sections are popular, which ones get ignored, or where they need to add staff during rush hour.

This camera stuff is also key for some crazy future tech, like those smart shopping carts that know what you put in them or shelves that alert the staff when they need restocking.

Amazon even has stores where you grab what you want and walk out – the cameras track everything, and your phone basically pays for you!

amazon’s walk out stores

Get Ready for the Future of Retail

Okay, that’s a wrap on the biggest trends shaping how we shop in the years ahead! Tons of stores are getting smart, using AI to figure out what customers really want – but let’s be honest, those wants and needs are changing big time.

Being eco-friendly, super convenient, and offering unforgettable experiences are what matter now – and these are the aspects that truly foster customer loyalty.

We’re also seeing how people spend their hard-earned cash shift with the economy. Store brands are probably here to stay for a while, and even those fancy designer labels might be feeling the pinch.

Now, if you’re dreaming of opening your own retail shop, all this matters to you, too! A rock-solid business plan is key to making it work.

Want some expert help and insider tips? Check out Upmetrics. We’re all about helping businesses like yours get off to a flying start with plans and templates built on  experience. Why not take a look at this sample retail store business plan to get a taste of what we do?

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Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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