2023 represented a challenging year for many retailers, however GfK predicts that as inflation continues to fall and the cost-of-living crisis eases in many markets, 2024 could signal a return to more ‘normal’ rates of growth.
Below, more2’s Client Director, Leah Everton shares a summary of some of the trends that will shape 2024.
Prioritising building loyalty will be key for 2024, as retailers look to create a space for brand advocacy and community engagement.
Both online and in person spaces can be used to facilitate customer connections and enhance the shopping experience in order to create more loyal customer bases.
Investing in different digital channels
Brands will be mixing up their advertising investment, with Insider Intelligence predicting brands to increase their investment in YouTube and TikTok, with Google and Meta spend staying flat, while X (formerly Twitter) investment will continue to decline.
Brands will also increase investment in brand marketing, and we will see a shift towards less polished influencers who appear more authentic as customers seek community.
Looking at returns
Returns remain a big cost to brands, and we’ve seen a lot of retailers and DTC brands look to reduce these costs in 2024. H&M Group moved to paid for returns online while ASOS focused on exiting unprofitable customers by reducing marketing to high returning customers, restrictions on Buy Now Pay Later use in checkout and charging for returns after 14 days.
We recommend looking at your return trends and patterns across your customer base to identify unprofitable customers.However, focus must remain on keeping returns as convenient and easy as possible for customers to support brand loyalty and prevent difficult returns being a ‘blocker’ for new customers trying a brand.
Creating great omnichannel experiences
We’ve seen lines between online and retail blur over the last few years, with pureplay digital brands incorporating in-store experiences (see Amazon, Glossier, and Gymshark) and traditional shops expanding online presence (Primark launched click and collect in late 2022 and expanded it throughout last year).
Retail stores have higher conversions rates, lower returns, and a personalised experience. Brands who only provide a digital experience should look to mirror in-store recommendations, aspects of ‘try on’ and high customer service online.
Focus on sustainability
There remains a high demand for transparency and ethical practices from consumers, and those brands who put sustainability at the core of their business will likely to benefit. Make sure your sustainability efforts are clear to see on your website and social media pages to help your customers make their buying decision easier.
These are just some of the trends that we predict will shape retail over the next year, with brands focusing on creating a better shopping experience for their customers. Ensure you are using your customer data to make the right decisions for you by identifying trends and isolating areas for focus that will support your growth in 2024.
Find out how you can be more profitable, increase your loyal customers, and confidently make investment decisions this year at one of our complimentary webinars for retail and DTC leaders. We share the methodologies we’ve used to grow over 100 brands including This Works, Ann Summers, and FatFace. Sign up here: https://content.more2.com/join-the-more2-ceo-teach-in