A lacklustre economy, the changing face of the high street and shifting consumer expectations have contributed to a year fraught with challenges for retailers.
And with 2024 set to bring its own set of speed bumps that retailers will need to traverse, ranging from the impacts a general election could have on consumers’ budgets to questions over what the demise of industry stalwarts like Wilko and Paperchase means for the industry, the new year is set to be one defined by change. With the launch of its “Top Commerce Trends for 2024” report, eCommerce consultancy Wunderman Thompson Commerce & Technology has looked into its crystal ball to understand what will shape the year ahead, offer a sense of how the retail industry will evolve and suggest where retailers and brands should look to invest.
Supercharged by AI, chatbots will finally deliver their long-promised value
The rapid development of generative Large Language Models like OpenAI’s ChatGPT means chatbots are poised to become more capable and functional than ever before. “As a result, I expect smaller brands and companies to start using these advanced technologies to create truly fantastic chatbots that offer an unparalleled user experience,” predicts Naji El-Arifi, Head of Innovation, Wunderman Thompson Commerce & Technology.
“Not only will the experience provided be better, but the number of channels that will take advantage of them will also increase; imagine if a brand could integrate AI into its WhatsApp business account to give customers updates on delivery or returns. As this continues to evolve, consumers can expect to see chatbots become a more integral part of their eCommerce lives.”
AI won’t just be “generative”, but “curative” too
Brands increasingly find themselves under the microscope to tackle diversity, equity and inclusion (DE&I), could AI help provide online experiences that are accessible to all? Leon Suchocki, Head of Brand Guardian, Wunderman Thompson Commerce & Technology believes that “We will increasingly see curative AI used to ensure content is compliant with a brand’s accessibility guidelines, rather than having humans pore over every asset, current and past.”
“We all know AI’s ability to scrape and process vast quantities of data at lightning speed, so it makes sense that AI should be able to help manage vast brand footprints and their content in a way that is efficient and highly scalable. In fact, it already does in some respects, with some already using it to automate the validation and curation of digital content across entire digital estates in minutes. Next year will see a move away from content being manually curated for the most part, with AI taking on a larger share of responsibility.”
Social goes beyond social
Social media is no longer the place for online communities to grow and thrive, with the likes of YouTube, Twitch, Fortnite, and the like bringing new opportunities for brands to sell to consumers. “Brands must widen their footprints in 2024 to ensure their social experiences are optimised with eye-catching imagery, platform-specific storefronts, and striking content if they are to stand out from the rapidly growing crowd,” says Chloe Cox, Head of Social at Wunderman Thompson Commerce & Technology.
“It’s not just a matter of selling more either, as these platforms can be goldmines for data that marketers can use to determine what products their audience want and the best way to engage with them.
“While social commerce is yet to take off in the UK, with traditional platforms hitting the limits of their commercial potential, opportunity lies with those that can consistently create engaging experiences that users keep coming back to.”
Marketplace dominance loosens as consumers choose alternative channels to purchase online
While the economic pressures that many expect to spill over into 2024 would suggest another year where marketplaces like Amazon or Alibaba dominate, that may not be the case. “In the most recent edition of our global Future Shopper report, marketplaces’ share of wallet was 35%, a good figure in a vacuum but one that is unchanged from last year,” said Ken Platt, Director of eRetail & Marketplaces at Wunderman Thompson Commerce and Technology.
“Plus, it’s down from the 42% share marketplaces commanded in 2021, which begs the question: have marketplaces reached maturity? With other channels flourishing and consumers becoming more discerning when it comes to price and sustainability, this could be a year where we see marketplaces’ grip on online shoppers’ wallets loosen even further.”
The return of direct-to-consumer brands
Direct-to-consumer (DTC) brands must wake up to their number one issue – attrition – and aggressively address it. “Consumers often come to them for inspiration and to search but historically, generally leave when it comes time to buy,” says Shalina Ganatra, Head of eCommerce Consultancy, Wunderman Thompson Commerce and Technology.
“In 2024, we will see DTC brands bite back. Whether by addressing their customer experience, focusing on easy checkout, compressing the experience to drive consumers through the sales journey, or even turning themselves into marketplaces, DTC brands are set for a return to prominence. With consumers searching for new and more varied brands due to the persistence of home working giving them more time to comparison shop, businesses must strike while the iron is hot. And this increased focus on DTC success will be reflected in their strategies, with owned online sales becoming more central.”
