Retail media and improvements in efficiency are among the highly anticipated global retail trend predictions from international insight provider IGD.
In the newly released report, IGD’s team of global insight leaders outline five trends that are set to shape the retail market in 2024 and beyond.
Toby Pickard, Retail Futures Senior Partner at IGD, said, “This year, the inflationary backdrop in most major markets remains on our minds. It is a considerable challenge, driving up the cost base for retailers and suppliers and pressuring shoppers’ income.
“This has led to an intense focus on costs, improving efficiencies and delivering value to consumers in new ways. It has also led to retailers investigating new sources of revenue and profitability. These initiatives are helping retailers reset the cost base and develop go-to-market models for the future.”
IGD’s global retail trends for 2024
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The efficiency imperative
With volume growth remaining difficult to generate and competition intensifying, attention is naturally turning to the cost line. Retailers globally are looking to low-tech and high-tech ways to reduce wage bills and drive improvements to enhance efficiency. Even marginal gains can add up to big savings.
Toby Pickard said: “Checkout removal and a shift towards replenishment during trading hours make sense from a spreadsheet perspective. However, 2024 might be the year retailers realise the competitive short-sightedness of diminishing the in-store experience.”
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Media matters
Retailers are becoming more switched on to the fact that they are now among the largest media owners around, due to their store networks and digital assets.
They are aggressively pursuing the creation of retail media ecosystems that enable suppliers to engage with shoppers before, during and after their in-store experience. Retail media is already a major source of high-margin incremental revenue which is anticipated to grow over the coming year.
Toby Pickard commented, “While the development of retail media networks is seemingly a triple-win – good for retailers, brands and shoppers – there is much to be done to prove it is simply not just another tax on suppliers. More evolution in terms of measurement and standardisation is required to prove its genuine worth.”
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Unleashing the promise of technology
Navigating the dynamic retail tech landscape, from AI to robotics, offers promise and challenges. Retailers chase efficiency, personalised experiences, and profitability but grapple with implementation challenges. A disparity is emerging between larger retailers with resources to invest and smaller players, posing a formidable competitive gap.
Toby Pickard said, “The pace of change makes it challenging to get started with newer technologies. Retailers should focus on aligning their investments with business goals, look at using technology to enable change in the areas that matter most.”
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Health: strategies for a fitter future
New policy, legislation and “health by stealth” continue to be vital ways to improve the future prognosis. At the same time, there are many opportunities to align with consumer needs and positively champion different aspects of health. The reward is building loyalty and becoming a trusted supporter for people aspiring to make healthier choices in their daily lives.
Commenting on health, Toby Pickard said: “Helping shoppers lead healthier lives is a marathon, not a sprint. Industry must contribute to positive change or face increasing intervention, as public health challenges intensify.”
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Sustainability: time to deliver
With retailers working towards delivering 2025 sustainability commitments, 2024 will be key for being more transparent about what they are doing and why. Retailers will try to inform and educate shoppers to get them to purchase more sustainable products and services. They will do this through in-store and online messaging, using digital media and running campaigns, along with price, promotions and incentive tactics.
Toby Pickard said, “To achieve their 2025 sustainability commitments, retailers must move at a faster pace than ever before. 2024 will be the year to deliver. However, with so much to tackle, deciding where and how to act will be a challenge.”
