Tom Mercer, commercial director at business consultancy GAIN LINE, predicts some key retail trends in 2024
Over the past three years, we have seen a steady stream of much-loved retail brands shut up shop for one last time. Reasons vary from a drop in consumer spending due to the cost-of-living crisis, the continued fallout of COVID-19 and the dreaded B word – Brexit. What isn’t being analysed is the reason behind these rolling conveyor belts of folding retailers.
The world is changing fast…in more ways than one. From environmental, social, and political changes, to moving out of the worst days of a global pandemic and the dynamic shifting of people’s values within their lives and workplaces. Businesses must accept a constant state of change as the new normal, moving with their employees, customers, and the world around them.
Up to 15,000 shop closures are predicted by 2025, with industry chiefs warning that British high streets risk collapsing into ‘wastelands’. The basic concept of what a High Street or shopping centre does for its community has stayed the same since Marks & Spencer opened in 1884. Yet, the way we live our lives – and let’s be clear, the way we live in a digital age – is significantly different from that of people in the 1800s.
In recent years, the shape of our high streets has dramatically changed. Much-loved retailers like Wilkos have all shut their doors for the final time. With more people shopping online, working from home and having less disposable income what will 2024 for the retail industry?
Customer data automation
2024 will be a critical year for UK retailers, which must make intelligent moves to utilise digital technology and online retail to avoid failing. Customer data has always been of great importance and value to retail. Still, I expect to see a greater use of customer data in 2024. Not only will it give a better retail experience to customers, it will also help retailers to see a return on investment through greater brand loyalty, better retention rates and ultimately, and larger spending at the checkouts.
Inventory Automation will continue to replace manual processes with software that retailers can analyse to make data-led decisions. This will help keep an eye on inventories and supply chain management and support customer experience and, ultimately, the bottom line. Customers who know they can shop, without items being out of stock, for competitively priced goods will be more inclined to remain loyal to their preferred retailer.
Customer feedback is excellent for optics, but internal feedback is incredibly valuable for the overall operation of a retail business by understanding internal pain points. A happy workforce is not only more productive, but it results in more satisfied customers. A survey by Gallup revealed that companies enjoy a higher 147% earnings per share versus their competitors, thanks to having happier employees.
Retailers should regularly stage feedback workshops in team cohorts to collect information from the front line all the way up to the top to ensure a 360 view of your market, its changes and the pain points felt internally, and externally. This will also allow operations teams within retailers to avoid making or repeating mistakes, as well as fostering a culture of growth and motivation to work together.
Flexible and smart payment options
If retailers’ items are high ticket value, flexible payment options are essential, with multiple providers available with easy installation integrations. Over the past year, we have seen a boom in retailers accepting payments via Klarna, Clear Pay and most recently, PayPal Pay in 3. Customers looking to make more significant purchases and manage their cash flow seek retailers with flexible payment options.
Retailers who have yet to embrace this new way of payment will see a drop in customer loyalty and repeat business. Thus, retailers to utilise smart payment methods at checkout for conversion rate and flexible payment options to reduce drop off.
Automated pricing for e-commerce
In 2024, we will also see retailers utilise AI to monitor competitor pricing. Customers are becoming increasingly savvy as to how to get the best price. Retailers need to realise customers have the time and resources available to them – even when shopping in-store, thanks to the smartphone – to find the best place to give them the best price. Without embracing AI to remain competitively priced, retailers will be in danger of being undercut in prices.
As 2023 ends, retailers will be hoping for a great Christmas at the tills. Next year’s retail strategies might seem a little way off, but forward planning is needed to ensure brands and retailers are able to keep their customer base and remain relevant for shopping needs in the digital age.