In the ever-turbulent currents of retail, success has always revolved around a customer-centric approach. But in 2024, that parallel is more evident than ever due to numerous technological advancements. As global companies adopt and start to depend on digital commerce more and more, by 2027, we could see a possible 86% uptake of digital platforms and apps. In the context of future-proofing a retail operation and nurturing sustainable growth, three key areas of technological innovation emerge: artificial intelligence (AI), personalization, and user experience (UX). Furthermore, with such accelerated technology surprising us, merchants can look forward to innovations like Generative AI and AI Copilot. Despite the global challenges we saw in 2023, economists predict solid retail economic growth for 2024, and retailers should prepare in advance to take full advantage of these promising opportunities. To future-proof their operations, businesses in the retail sector should pay attention to six key trends:
1. Ecommerce Expansion
There are currently over five billion internet users worldwide. Since the pandemic, ecommerce has expanded exponentially to take over global retail and transform how people buy and sell their goods. Statista states retail ecommerce sales might surpass 6.3 trillion USD worldwide by 2024. It is high time for businesses to prioritize building robust e-commerce platforms, to enhance user experience as well as their digital presence. And they will need it as the demand for online shopping increases each day.
How to Expand Your E-Commerce Business Globally:
- You will need a global-friendly website: Large ecommerce platforms designed for global reach, such as Spotify, nurture user experience. These sorts of platforms promote user experience by focusing on accessibility via diverse payment and shipping options, great customer support, and informative content. Personalization throughout the sales funnel gets AI support, building stronger retail relationships and encouraging repeat purchases. Nowadays, you can build any kind of website, but all the add-ons will impact the budget. Besides widgets and animation, customizing your website based on customer locations, language, pricing, and shipping rates is what a good website makes. Finally, ensure your online sales platform has fast loading times before you go live globally, and good luck.
- Create a marketing team with a worldwide perspective that can navigate today’s diverse international markets with an edge. A knowledgeable, globally-minded marketing team will be able to tailor strategies to each specific target market and then make the best out of local channels and platforms for maximum reach. Local freelancers could be a great asset in this endeavor because they understand current and cultural references.
- Maintain consistent product quality and customer service standards at all times. This may sound like it goes without saying. Still, you would be surprised how many business owners don’t put quality at the top of their priorities — however, enterprises who do see excellent customer retention and increased loyalty. Partnering with reliable local suppliers and distributors will help you improve product quality as well as timely delivery. Just like with diversifying the marketing team, every entrepreneur should consider investing in customer service teams that are based in different countries so that they are fluent in the local languages and familiar with cultural differences. This will help ensure that your customers receive the best possible service and support, no matter where they are located.
- Every salesperson must diligently track progress by monitoring key metrics such as sales numbers, website traffic, social media following, and repeat buyers to gauge the success of the company’s strategies, especially during a global expansion of the ecommerce sector. Adjust strategies and pivot as needed based on performance indicators and market feedback.
- Make sure your online sales funnel doesn’t exclude any payment methods. Customers in different target markets prefer various payment methods, and a smart business move would be to cater to as many as possible. Offering several forms of payment will, firstly improve customer satisfaction, and with it, should maximize sales, especially if you display currencies in local currency. Finally, make sure you customize pricing to enhance the shopping experience and reduce bounce rates.
2. Generative AI:
Generative AI is becoming an integral part of retail, or more specifically, ecommerce. McKinsey’s research showed that generative AI (gen AI) adds almost 4.4 trillion USD to the global economy annually. This means that nowadays, most companies use generative AI, which makes generating and refining product descriptions and even creating product images far less costly and much quicker. The algorithm has become so good it can tailor product descriptions to specific audiences, imitating any tone of voice you need. Just to add insult to injury of millions of hardworking copywriters and graphic designers around the world, AI produces complex, niche-specific content by scouring the internet for significant information in a split second.
AI programs are all-encompassing tools that are capable of gathering data on customer behavior, making tracking and predicting audience habits a breeze for sellers. What was once weeks of data collection and tons of graphs reading to decipher consumer desires and dislikes now happens in less than a minute with the press of a button. While a marketer simply monitors the program and adds a human touch to strategizing, AI can quickly predict demand, identify trends, and optimize content. It looks like the future of retail is definitely AI-driven, especially with 35% of consumers going for companies with chatbots. 61% of retailers also confirm using artificial intelligence for applications like chatbots. The same report by McKinsey states that by 2040, Generative AI could compete with the top 25% of the educated population and significantly contribute to economic value.
3. Subscriptions:
The retail subscription market has seen some major storm waves, but data is still showing strong growth amid challenges. Despite the inflation and economic confusion, the subscription model generated over 38 billion USD in revenue in 2023, exceeding 2019 figures by more than double. However, 2024 numbers say consumer confidence is showing a downturn trend, and retail subscriptions are officially under the pressure of the public eye and will have to prove their value in the coming months. Sellers lose subscribers mostly due to complicated and faulty billing procedures, poor customer experience, and steep prices. AI-powered subscriptions come to the rescue to mitigate the heavy impact of the recession, potentially being able to enhance customer experience, and open up new sales avenues.
In the bigger picture, subscription models can still be efficient and do well with customer retention. According to a McKinsey study, 15% of online shoppers are subscribers, too, with a strong forecast of a 71% annual growth from 2023 to 2028. Subscriptions usually provide a stable and predictable revenue stream for businesses, adding a degree of financial predictability to the operations.
4. Sustainability and green fatigue
Sustainability is no longer just a buzzword because shoppers openly choose environmentally conscious brands, saying they would rather skip the purchase if it is not carbon-neutral. At the same time, they are also becoming increasingly distrusting of overtly displayed “eco-friendly” labels stamped on every business these days. Buyers actively question whether sellers are genuinely committed to a greener future or just “greenwashing.”
In fact, about 60% of consumers don’t trust these green claims, according to this Mintel report, meaning the doubts have spread far and wide, and people are not just blindly shopping stuff like they used to. In 2024, consumers want to know if organizations are thinking about climate solutions that make a positive impact and are interested in implementing genuine “green” or regenerative practices. What an opportunity for retail, especially for small businesses, because those who make an effort to communicate their sustainability efforts transparently will garner more loyal customers as we venture deeper into 2024.
5. Personalized Shopping Experiences:
Whether you run a large retail conglomerate or a small enterprise, personalized marketing will be essential in 2024. If your website has troubles with visitors who frequently abandon their shopping carts, it means it is time to personalize your retail sales funnel.
Research consistently demonstrates that personalization can increase conversion rates to 5.5 times higher. Therefore, integrating personalized approaches into your marketing could lead to a 10 to 15% increase in revenue. Customized shopping experiences can do more than create product suggestions based on browsing habits, with marketers being able to add targeted discounts and provide unique shopping environments by analyzing customer data. Personalized shopping experiences increase revenue through tailored offers and custom display options. Add post-purchase email campaigns to the mix, as well as augmented reality and motion graphics, and you enhance customer satisfaction, guaranteeing a decrease in cart abandonment rates.
6. Digital Sales Rooms:
Digital sales rooms (DSR) are centralized and secure platforms that combine live streaming with interactive shopping, making for an immersive browsing experience. These retail microsites show you products in real-time, which has become popular in B2B and B2C commerce. Gartner says that by 2026, around 30% of B2B sales processes will benefit from Digital Sales Rooms. Sellers can also use the DSR to converse and collaborate with stakeholders during the sales process. Most importantly, the DSR streamlines the buyer experience by giving buyers a single location and a source of truth they can return to throughout the deal cycle. Statistics show a more effective buyer engagement through a DSR, essentially giving sellers a competitive edge.
In this new age of AI-driven retail, marketers can offer buyers real-time assistance, authenticity, and enhanced customer support. In summary, with the power of automation in the retail industry, businesses should be able to stand out from competitors long enough to attract and retain loyal customers who don’t abandon their carts. Finally, through personalizing the digital sales room experience, retailers increase the likelihood of repeat purchases and referrals.
Conclusion
In conclusion, marketers are in a race to innovate if they want to pass the relay and stay in the competition. Retail is a customer-centric business, but the fairly recent infusion of technological advancements has the potential to aid marketers in this marathon toward sustainable growth. Generative AI, personalization, and UX improvement are reshaping the industry, pushing retailers to focus on ecommerce expansion, subscription models, sustainability practices, custom shopping experiences, and digital sales rooms to future-proof their operations. Finally, retailers who stay proactive in implementing these strategies to the best of their possibilities and budget have a better chance of thriving in an ever-turbulent marketplace and meeting the changing needs of customers.
