2024 Retail Trends: How the Latest Technologies Continue to Shape the Industry
Our rapidly digitalizing and globalizing world hasn't been kind to the retail industry these past few years, especially for brick-and-mortar stores. As a result, many retailers have begun to wrestle with questions concerning the nature of the retail experience and what it means to succeed in 2024. Despite this anxiety, brands can be sure of three key trends: customer loyalty, retail media, and immersive experiences. These trends will play prominent roles in the retail sector this year.
Retaining Customers Through Customer Loyalty Programs
In times of economic uncertainty, it's far more cost effective for retailers to retain existing customers than acquire new ones. Customer loyalty programs will be indispensable to retailers this year as they strive to protect profits and customer share. Unfortunately, customer loyalty is on the decline. A survey of more than 10,000 consumers globally, including 4,000 in the U.S., found that the U.S. experienced a decrease in brand loyalty from 79 percent to 68 percent.
Retailers need to change how they manage their loyalty programs, and artificial intelligence (AI) will be the key ingredient that separates average from exceptional loyalty schemes. AI helps retailers see their customers as individuals, not numbers. For example, retailers can leverage AI analytical tools to glean insights from massive amounts of customer data, enabling them to deliver personalized promotions, discounts and experiences at scale.
The Rise of Retail Media Networks
2024 will also see retailers aim to diversify their revenue streams through data and technologies like retail media through retail media networks (RMNs). Amazon.com defines a RMN as a type of advertising platform that retailers can use to sell ad space to third-party brands on their digital channels.
Retailers should collaborate with digital specialists to develop or leverage existing RMN platforms. Likewise, by integrating AI into RMN systems, retailers can reach those customers actively engaged in shopping activities, boosting the effectiveness of advertising efforts and yielding significant returns on marketing spend. The data-driven capabilities of AI will also allow retailers to monetize according to customer preferences and behaviors, much like the personalized promotions and offerings of AI-powered loyalty programs.
Immersive Customer Experiences Powered by Virtual and Augmented Reality
Another way retailers will engage their customers in 2024 will be through immersive experiences like virtual reality and augmented reality, virtual events, and social shopping. A study from Coresight Research in partnership with Obsess discovered that every surveyed company is considering increasing their investment in immersive experiences over the next 10 years, with 93 percent “probably” or “definitely” doing so in the next three years.
Unsurprisingly, some of the biggest names in retail, such as Adidas, Balenciaga, and Ralph Lauren, are already hosting virtual events and fashion shows. Retailers have complete control over digital experiences, permitting them to build these virtual universes to maximize marketing efforts while minimizing risks. AI also empowers retailers to streamline the deployment of these complex immersive environments and extract and leverage user data to provide tailored offerings and experiences.
AI Will Undergird Future Retail Trends
A common thread connecting these retail trends is the increased adoption of new technologies, notably AI. Indeed, AI will be at the heart of the future retail experience, heavily contributing to the inevitable shift from traditional to new business models. To that end, it's safe to say that those retailers that embrace AI will succeed, while those that resist it will struggle.
Pierre Kremer is vice president, digital engagement at EPAM Systems, Inc., a digital transformation services and product engineering company.
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Pierre Kremer is the VP of Digital Engagement at EPAM Systems, where he advises enterprises across various sectors to ignite start-up thinking. With a long track record of using agile methodologies, Pierre supports companies to increase customer value, drive operational effectiveness and thrive in a digital world. His expertise lies in digital, CRM, eCommerce strategy, omnichannel, design and implementation, emphasizing the consumer, pharma, travel, financial services, retail and energy sectors.