The importance of efficiency, the rise of retail media, and the need to deliver on sustainability are among the key retail trends identified by IGD’s team of global insight leaders for the year ahead.
As Toby Pickard, retail futures senior partner at IGD, explains, the inflationary backdrop that remains in most major markets 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.”
Let’s take a look at IGD’s global retail trends for 2024.
1. The Efficiency Imperative
Retailers around the world are looking to bolster efficiency across their operations, with volume growth remaining difficult to generate amid intensifying competition. As IGD explains, even marginal gains can add up to big savings.
“Checkout removal and a shift towards replenishment during trading hours make sense, from a spreadsheet perspective,” comments Pickard, “however, 2024 might be the year retailers realise the competitive short-sightedness of diminishing the in-store experience.”
2. Media Matters
As a result of their extensive store networks and digital assets, retailers are among the largest media owners around – a factor that they are starting to utilise.
Many retailers are seeking to create retail media ecosystems that enable suppliers to engage with shoppers before, during and after their in-store experience. In addition, retail media is already being seen as a major source of incremental revenue, which is expected to grow over the next year, according to IGD.
“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,” says Pickard. “More evolution in terms of measurement and standardisation is required to prove its genuine worth.”
3. Unleashing The Promise Of Technology
The retail technology sector offers both challenges and opportunities. While retailers are seeking greater efficiency, personalised experiences and profitability from tools such as AI and robotics, implementation issues remain.
According to IGD, a disparity is emerging between large retailers with resources to invest and small players, leading to a gap in competitiveness.
“The pace of change makes it challenging to get started with newer technologies,” says Pickard. “Retailers should focus on aligning their investments with business goals and look at using technology to enable change in the areas that matter most.”
4. Health – Strategies For A Fitter Future
Retailers are discovering manifold opportunities to align with consumer needs when it comes to health and wellness, as well as positively championing different aspects of health. According to IGD, the reward for their efforts is the ability to build loyalty, as well as becoming a ‘trusted supporter’ for people aspiring to make healthier choices.
“Helping shoppers lead healthier lives is a marathon, not a sprint,” says Pickard. “Industry must contribute to positive change or face increasing intervention, as public health challenges intensify.”
5. Sustainability – Time To Deliver
The year 2025 is set to see many retailers’ sustainability programmes come to fruition, so the coming year will be crucial in terms of ensuring that retailers are more transparent about what they are doing and why.
According to IGD, retailers will be keen to inform and educate shoppers to get them to purchase more sustainable products and services, through increased in-store and online messaging, the use of digital media, and price, promotion and incentive tactics.
“To achieve their 2025 sustainability commitments, retailers must move at a faster pace than ever before,” Pickard notes. “Twenty twenty-four [2024] will be the year to deliver. However, with so much to tackle, deciding where and how to act will be a challenge.”
Download a free version of IGD’s Global Trends 2024 report here.
