by Thanos Efthimiopoulos and Antonis Zairis*
With the effects of climate change and geopolitical turmoil dominating the headlines in 2023, trying to make sense of how the retail industry will be affected in 2024 and in the future seems more difficult than ever. It is worth noting that today it is necessary for a retail business, almost four (4) years after Covid pandemic, to make regular adjustments to the ever-changing needs and consumers’ desires in an environment of uncertainty, increased inflation and high interest rates, which is eroding disposable income and forcing a careful prioritization of consumer spending on the part of consumers.
The most notable trends that most analysts and retail industry operators globally argue that the retail industry will experience throughout 2024 are those trends that essentially reflect a mix of technological innovation, personalized experience, sustainability with the integration of both physical and digital sales area:
1. Technology integration and multichannel commerce: Retail premises are increasingly integrating advanced technology such as augmented reality (AR), virtual reality (VR) and artificial intelligence (AI). These technologies are improving the customer experience by offering personalised shopping and engaging consumption environments. The changes brought about by AI and robotics, among the most fundamental components of the fourth industrial revolution, are testing the retail market’s resistance to confrontation as adaptation will be forced , but they also "give birth" to opportunities for employees to share knowledge, experiences, pursue specialisation and develop new skills that the market needs. The new added value that emerges from the use of artificial intelligence applications will make the businesses that will incorporate it into their daily operations strong, capable and with greater claims to compete in the field of international competition with multiple benefits not only for themselves but also for our national economy since they will contribute positively to the trade balance of our country. As far as multi-channel retailing is concerned, the boundary between online and offline retailing is becoming increasingly indistinguishable. Retailers are offering unparalleled and seamless experiences across multiple platforms, allowing customers to shop via mobile apps, shopping websites and in physical stores as an alternative. Also, with the help of artificial intelligence and machine learning, supply chains are becoming increasingly efficient. This leads to faster and more reliable product availability, enhancing the customer experience. Additionally, automation in retail, such as self-checkout, contactless payments, and Buy Now Pay Later (BNPL) will be the everyday reality of retail sector.
2. Personalisation and experience: By leveraging data analytics and artificial intelligence, retailers are able to offer fully personalised shopping experiences. Based on customized recommendations on shopping habits, targeted marketing and personalization, consumer customer service is now becoming the norm. Now as far as the Retail experience is concerned, stores themselves are becoming destinations for experiences, not just shopping. This includes in-store events, interactive displays and leisure activities that create a more engaging shopping environment.
3. Focus on health and wellness: The health and wellness trend will continue, with leisure activities and products that focus on mental and physical well-being. This requires a retail environment that is related to sport and wellness and with a focus oriented towards a healthy lifestyle.
4. Sustainable and ethical practices - Green Marketing Strategy: Consumers are truly more environmentally aware, increasing the demand for sustainable products. Retailers in turn focus on ’ethical’ suppliers who use sustainable materials and with environmentally friendly practices. Green or environmental marketing has at its core two key elements. The first ,to meet the needs of consumers with quality products that will continually improve and enhance their lives. The second is that these products or services produced should have the minimum negative impact on the environment during their production and transport. In other words, it supports businesses and their products but at the same time incorporates environmental protection into them. In essence, green marketing as a mechanism of sustainable entrepreneurship supports the production and marketing chain of products and services, aiming to reduce the negative impact of human consumption. Green marketing uses green advertising and green promotion mechanisms as tools.
5. Changing consumer expectations and a new generation of Consumers: A by-product of the pandemic was a whole new group of consumers who started experimenting with e-commerce as a way of interacting with retail. The change 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 have become accustomed 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 physical stores in the same way they do online. Consumers are now more cautious and reserved, recipients of mass information from multi-channel information systems and with a diversity of perceptions about the approach of companies for their product purchases, about the criteria for judging the choices they make and the integration of key requirements that companies must meet in terms of Social Responsibility, e.g. linking corporate action to environmental sensitivity, interlinking with sustainable features , with social sensitivity issues, the involvement of companies in environmental protection, and the integration of social responsibility into their activities.
As for the new generation of consumers, they behave differently from their parents or grandparents, they are not car-dependent, they care about the environment, they want to consume more responsibly and they share their lives on social media networks. But how do we translate these expectations? Even if products are visible online and on social media, simple issues can still be a barrier for younger customers who don’t drive a car to reach a physical store. Questions arise such as: Is there a bus/metro stop nearby? Is there a proper pedestrian lane to reach the destination? Can they park and charge e.g. their electric bike or scooter in a safe place protected from the rain? All of the above seem self-evident, but at the same time represent opportunities for improvement in many different retail environments.
6. Changing business practices. Many brands will increasingly occupy physical premises, not as a trading and distribution channel but as a platform for media and social spaces. If commercial premises owners develop strategies to accommodate such brands, this will open up long-term opportunities with brands and businesses that have never before considered physical space for growth. Thus, 2024 will bring more integrated retail models that incorporate advanced technology, coupled with experiential retail models. With a new generation of intelligent consumers becoming more demanding in terms of experience, value and sustainability, in an economic environment that will require better prioritisation of spend, the future of retail will continue to evolve. It should also be noted that there will be an increasing emphasis on local community and community-focused retail spaces, supporting small local businesses and creating community hubs for recreation and shopping.
So, 2024 will bring more fully integrated retail models that incorporate advanced technology, combined with experiential retail models. With a new generation of intelligent consumers becoming more demanding in terms of experience, value and sustainability, in an economic environment that will require better prioritisation of spend, the future of retail will continue to evolve.
*Development Management Consultant of Sonae Sierra and Deputy vice president of SELPE, professor in charge, Neapolis University of Cyprus, Premium member of World Economic Forum
By: N. Peter Kramer
