As we navigate the shifting currents of the retail industry, 2024 presents itself as a year of divergence with pivotal themes that will define the winners and the market’s overall direction. From consumer spending and evolving profitability strategies to leveraging AI and retail media, this episode unpacks seven crucial themes set against the backdrop of an ever-turbulent market. Tune in as we dissect each trend, offering actionable insights to not just weather the storm but to sail ahead with confidence and clarity.
Listen in to this episode of the podcast to hear:
- How two big trends from 2023, AI and retail media networks, will develop in 2024.
- Explore six workstreams of profitability to harness dynamic pricing, stock management, and innovative revenue streams.
- Why consolidation of the retail market could create new behemoths of the industry.
- Which key trend will more retailers pursue this year than ever before.
Explore the retail trends for 2024
In the episode, Oliver shared 7 trends for the retail industry in 2024. In addition to these trends, be sure to also check out the topics that are always “on-trend” which Oliver discusses in episode 200: The Ever-Trends Of Retail.
Trend 1: Consumer confidence and spending
Consumers continue to feel the squeeze as a result of the inflation impacts from 2022 and 2023. Consumer confidence shows glimmers of recovery but also exhibit signs of fragility too. As such, through 2024, we’ll be keeping an eye on key measures such as PwC’s consumer confidence barometer as well as the Retail Health Index which is monitored by the KPMG / RetailNext Retail Think Tank.
Read more about the Retail Health Index in this LinkedIn Article.
Trend 2: Discovering the path to profitability
The trend highlights the acute focus on profitability in 2024, especially after a challenging peak trading period. Oliver outlines 6 workstreams to focus on.
- Adopting dynamic pricing to balance supply, demand and the market.
- Developing customer acquisition and retention propositions.
- Enhancing stock flows, volumes and clearance to protect margins and availability.
- Creating lean operating models to ensure your organisation works effectively and efficiently.
- Levelling up data and reporting with a focus on positively impacting the future.
- Discovering new business models and unlocking new revenue streams.
To discover more about how you can discover your path to profitability, contact Oliver Banks on oliver.banks@obandco.uk or message Oliver on LinkedIn.
You might also enjoy listening to episode 261: Uncovering The Path To Retail Profitability.
Trend 3: Unlocking group synergies.
This trend anticipates more consolidation and acquisitions within the retail industry, with companies looking to maximize return by bringing different companies into a group, focusing on aspects like IT, HR, supply chain, and logistics. We’ve already seen companies like Next, Frasers Group and THG expanding their retail and brand portfolio and this acquisition and consolidation activity will continue in 2024 as more retailers find themselves in distressed situations.
An essential aspect to unlock group strategies is to be able to successfully integrate businesses. Listen to episode 215: Making Acquisitions Successful.
Trend 4: Taking AI to the next level
AI and Gen AI were some of the biggest buzzwords in retail and business in 2023. The increasing importance of AI means it will quickly become a potential competitive advantage for retailers. In turn, this topic will be even higher up the strategic agenda in 2024 for internal discussions, but specific applications will be less publicly discussed as a result.
Check out these other episodes about AI or exploring the impact and opportunity of this technology trend.
Episode 267 featured retail technology director, Holly Steele as she joins Oliver to explore The Art And Science Of Retail Technology.
Also check out episode 224: 10 Thoughts On AI In Retail where Oliver shares perspectives and considerations on the emerging opportunities driven by this tech.
Trend 5: Retail media extrapolation
This trend suggests that retail media networks will extend into more categories beyond traditional grocery. This leads to the development of new advertising opportunities within retail spaces. Additionally, brands (the customer of a retail media network) will have increasingly tough decisions about where to allocate their marketing budgets and how to factor in the various channels and media opportunities open to them.
Retail media networks are just one of the new business models that leading retailers are pursing in order to open new revenue streams, build resilience and unlock profit opportunities. Read more about the forecast for the impact of new business models.
Also check out episode 256: Creating A New Business Model where Oliver shares more about how to discover and deliver the right opportunity for your business.
Trend 6: Apps build loyalty for your best customers
Apps are nothing new, but they’re increasingly important as a channel for the most valuable consumer segments. They’re an essential tool in driving customer retention and loyalty, while also recognising the need for a seamless app experience to retain customers’ interest and engagement.
Therefore, apps form a crucial element in unified commerce plans. Read more about unified commerce strategies on LinkedIn or listen to episode 262: Omnichannel Vs Unified Commerce or dive deeper into data with expert viewpoint from Bain’s Bala Parameshwaran and Aptos’s Nikki Baird in episode 265: The Challenges Of Unified Commerce.
Trend 7: 2024 is the year of cost-saving plans
The final theme focuses on cost-saving plans and programmes. Oliver emphasises the importance of distinguishing between “cost-cutting” and “cost-optimization”. As retailers look to “batten down the hatches”, they must avoid making rash decisions which directly impede brand reputation or future growth opportunities. Instead, we should prioritise value creation during the current tough market conditions.
Read more about Nike’s cost saving plans and what this means for retail. This is part of the LinkedIn newsletter, Retail By Numbers, so subscribe if you don’t already receive these.
Finally, look out for Oliver’s book
Driving Retail Transformation: How to navigate disruption and change is out on 5th March 2024 and is available from all good book stores. Discover more at DrivingRetailTransformation.com.
“Essential reading for any retail leader”
Paula Bobbett
Chief Digital Officer, Boots, UK
