Five Retail Trends for 2024

Despite economic uncertainties and consumer frustration around high prices this year, the economy showed robust growth, presenting both challenges and opportunities for brands.

Below are five trends that will influence sales and consumer engagement in 2024. 

• Consumer spending to continue: There’s a major discrepancy between Americans' negative sentiments about the economy and actual spending patterns. Consumer spending remains robust and consistent, supported by both data-driven insights and anecdotal evidence. Restaurants are full, airplanes are full and there doesn’t appear to be any signs of slowing. As unemployment remains at historical lows, there are no apparent macroeconomic factors signaling a slowdown in consumer spending in the near term. 
• AI’s rising importance in 2024: In 2024, artificial intelligence (AI) will become an increasingly important tool for consumers and retailers. Even though reports indicate limited AI use among shoppers, interest in using the tech in the future is high. AI-driven retailer solutions will provide a means to maximize operational efficiency and enhance the consumer experience by addressing out-of-stocks, overstocks, and more. We’ll also see retailers and CPG brands use data to create hyper-personalized but not overly invasive experiences for consumers.
• Impact of retail theft causes reinvestment in in-store workers: Retail theft will continue to be a real problem for an industry that doesn’t yet appear to have a sustainable, scalable solution. Defensive merchandising — locking up items or making it harder for shoppers to buy them — is the temporary best practice, but it creates significant additional shopper friction. Combined with the sparsity of retail labor, defensive merchandising creates real pressure on sales and is costly for the manufacturers.
• As a result, we will see retailers moving away from self-checkout as they start to shift their focus towards loss prevention. They are recognizing that the costs of the theft associated with fewer workers in-store outweigh the value of reducing labor costs.
• Brand shifts to more intentional merchandising: Certain CPG categories with high supplier proliferation will start to consolidate the variety of items they have on offer. There simply isn’t enough room in stores for 25 energy drink brands, 25 sparkling water brands and so on. In 2024, brands should be more intentional about stocking their high impact SKUs at high impact locations.
• Changing consumer expectations: A byproduct of the pandemic was the entirely new cohort of consumers that began to experiment with e-commerce as a way to interact with grocery and mass retailers. The shift that we are seeing is that the way people shop in physical stores has changed; they now expect more from their in-store experiences, as they've gotten used to the convenient and flexible options offered by digital platforms. Consumers want to be able to interact with stores in new ways, including the ability to search, filter and find products in the store the same way they do online. 
   

David Gottlieb is chief revenue officer of computer vision company Trax Retail.