These Five Trends Will Reshape the Retail Industry in 2024
Retailers have been gradually settling into the post-pandemic paradigm. The in-store experience remains important, but retailers also know that recent upticks in eCommerce and newer delivery models are largely permanent. That’s simultaneously a store operations challenge, a customer experience challenge, and a supply chain challenge that retailers need to solve for.
Traditional retailers are focused on building brands that are equally strong in digital and physical formats. In an omnichannel environment, the most successful retailers will leverage technology to strengthen their strategies and efficiently serve customers across all channels.
Given these imperatives, the five technology trends below should be top of mind for retail leaders this coming year.
1. Artificial intelligence for everything
Artificial intelligence will make a meaningful impact across numerous retail functions, from merchandising to forecasting, marketing, sales engagement, loss prevention, and after-sale support. At the same time, retailers need mechanisms to ensure that AI is used safely and effectively. Some large retailers, for example, have rolled out responsible AI guidelines. As AI experiments proliferate – particularly GenAI experiments designed to automate customer touchpoints in new ways – retailers must ensure some level of centralized governance that can vet and de-risk experimentation while empowering the most impactful prototypes and proofs-of-concept to scale rapidly.
2. Secure and convenient payments
Digital retail is growing, and retailers need to guard themselves from fraud. Biometric technology can give retailers another layer of protection against fraud. Retailers will play an active role in building customer trust by more accurately authenticating customers and reducing fraudulent transactions. Biometric data points like fingerprints, retina scans, and facial recognition will further improve the customer experience by enabling capabilities like rapid contactless checkout. As a side benefit, store employees can use this technology to log attendance and hours seamlessly. The most recent data suggest that the biometric POS market will experience a CAGR of 13.9 through 2028.
3. Technology-driven shoppable content
Creating a best-in-class digital retail experience is now about much more than searchability, pricing, and payment. Retail brands are competing for mindshare as much as wallet share. To remain competitive, they must embrace technologies that will power the next generation of customer engagement, from OTT integrations to AR visualizations. Retailers must also be prepared to adopt the next generation of emerging platforms quickly. As new platforms become popular venues for user-generated content, brands need to be ready to jump in with a high-quality content strategy.
4. Retail media networks
Omnichannel strategies have allowed retailers to build brands across multiple channels, and they are now growing retail media networks to monetize those channels and broaden their revenue mix. Retailers are creating new brands using their omnichannel platforms and, at the same time, enticing existing brands to utilize their infrastructure (both physical and digital) for marketing products. Advertisers are projected to spend over $55 billion on retail media this year. In the last few years, retailers like Walmart, eBay, and Amazon have proved the importance of retail media networks to boost demand and increase sales. Based on their successes, this year will see an increasing number of large retailers building, refining, and monetizing their media networks.
5. Robotics, computer vision, and automation
The combined power of robotics, computer vision, and automation can reshape every aspect of retail. Automated robotic solutions will increasingly facilitate mundane tasks like picking, sorting, and replenishment. Computer vision already enables cutting-edge digital shelf management solutions, and drone-based visual inspections will further accelerate the journey toward picture-perfect shelf sets. Automated solutions will improve efficiency along with KPIs like order fulfilment time. More importantly, they will free retail talent to focus on improving and innovating the core customer experience. Usually, these automation-focused technology solutions are high-cost, higher-reward propositions. The ROI is clear; to pursue these long-term enablers, retailer leaders will need to drive organizational alignment around deploying working capital with an eye on the technology-defined competitive landscape of the future.
Retailers find themselves in an exciting but complicated position. On the one hand, the industry has identified numerous innovative ways to leverage emerging technologies for efficiency, resilience, and customer success. On the other hand, only some retailers can afford to invest in everything simultaneously. The most rewarding approaches will be iterative and agile, allowing retailers to stack-rank potential technology transformations and press play on the most strategic business transformation opportunities available.
