8 Top Retail Trends for 2024: Prepare for the Future of Retail

In 2024, retail sector business leaders continue to deal with the effects of the pandemic and the global economic climate. US ecommerce sales are expected to increase to a value of $1.25 trillion in 2024.

Although sales from online shopping continue to grow, the rate of growth is expected to slow as more customers return to in-store shopping. This is motivated by increased shipping costs, sustainability concerns, and the unique benefits of brick-and-mortar shopping. Brands are expected to capitalize on this by embracing in-person and hybrid shopping models.

Retail sector analysts also express concern about a potential economic downturn, rising costs, and the impact of ongoing supply chain issues, with some analysts anticipating a decrease in consumer spending amid economic uncertainty.

Embracing cutting-edge retail trends can help brandsremain relevant, adapt to customer preferences, and minimize risk. Here’s an overview of the top retail trends important for 2024.

Top 8 retail trends for 2024

1. Competition in physical retail is increasing as digitally native brands expand into brick-and-mortar
2. Experiential retail is becoming more important
3. Showrooming is increasingly popular with consumers and retailers
4. Brands are using pop-ups to delight customers and meet them where they already are
5. Omnichannel is the new norm
6. Brands are leveraging AI to enhance personalization capabilities
7. Brands are using AR shopping experiences to boost conversions
8. Sustainability is influencing consumer choices

1. Competition in physical retail is increasing as digitally native brands expand into brick-and-mortar

In-store traffic has increased, prompting online retail stores to expand into physical spaces to meet consumer demand. In late 2023, Insider Intelligence predicted that nearly 85% of future US retail sales will take place in-store, with retail customers motivated by product availability, the ease of product discovery, and in-person access to knowledgeable staff.

A Shopify/Ipsos study also found that 82% of retailers surveyed are confident that physical stores will continue to play an important role in future commerce growth. These trends are expected to motivate more digital-first brands to expand into in-person commerce, increasing competition in the physical retail space.

2. Experiential retail is becoming more important

As businesses recognize the value of in-store shopping experiences, they are embracing new ways to boost customer loyalty and generate foot traffic in a competitive retail landscape. Experiential retail, which aims to help brands create unique and memorable in-store experiences by focusing on community and events, is one popular strategy.

Here are three examples of creative retailers leading the experiential retail trend:

Ralph Lauren

A “third space” is a place you visit regularly that isn’t home or work. Examples include your gym, local community center, or a favorite bar. Although retail stores aren’t traditionally third spaces, some retailers are using experiential retail strategies to create reasons for consumers to visit retail locations more frequently. 

Ralph Lauren’s New York coffee shops are one example. Produced in partnership with the coffee brand La Colombe, the Ralph’s Coffee locations have a vintage design aligned with the clothing brand’s aesthetic, and they offer a space for New Yorkers to meet or take a post-shopping break. Business owners can invest in similar third-space initiatives to boost foot traffic, cultivate repeat shoppers, and create opportunities to collaborate with other brands.

STORY

Manhattan retail store STORY reinvents its entire store every few months, incorporating a new concept, design, and merchandise selection. Retailers can consider switching up store themes more regularly to inspire curiosity and give customers a reason to make regular visits.

Love Record Stores

Love Record Stores hosts DJ sets and live music performances in its stores, which attract new customers and keep current customers engaged. Hosting an event can help you increase foot traffic and boost sales. If your point-of-sale (POS) system allows it, you can review your customer profiles to help you decide on an event type. Tailor your event to your target audience demographics. Options include mixers, panels, open mic nights, workshops, and more.

3. Showrooming is increasingly popular with consumers and retailers

Showrooming is a hybrid shopping trend in which customers visit an in-person store to touch, feel, and try products and complete the transaction from the same retailer’svirtual shop later.

Traditional retail stores can function as showrooms by offering a hands-on product experience that encourages conversion. Research shows that this strategy can boost online sales. Brands get an average of 37% more web traffic the quarter after opening a new physical store. Some retailers are also taking advantage of this trend with retail stores designed to function primarily as showrooms. Here are three major advantages of this strategy:

Easier inventory management

Showrooming typically involves consumers making purchases directly from your online store, which means you can stock less inventory in your retail locations. This creates more space for experiential moments and engaging with customers. Depending on your space, you can either keep the bulk of your inventory in the stock room or in a warehouse. 

Smaller retail space

If you’re not displaying multiple units of the same products on your sales floor, you’ll likely need less floor space and can opt for a smaller store. This can help reduce your operating expenses or make it possible to afford a smaller commercial space in a more desirable location with higher foot traffic.

Cross-selling and upselling opportunities

With showrooming, you have the opportunity to spend more time with each customer who visits your retail store (also known as clienteling), giving you more opportunities to cross-sell and upsell products. Also, depending on your POS, this one-on-one time will give you more chances to make personalized recommendations based on customer profiles and buying history.

The major drawback of this approach is the risk that store visitors might learn about a product in-store, and then go home and purchase a similar product online from a competitor. If you open a showroom, use technology like a portable point of sale so that high-intent customers can order on the spot.

📌 GET STARTED: Want to support showrooming at your retail store? Use Shopify POS email carts to add items to customers’ carts, send their wish list by email, and help them buy online whenever it’s convenient for them.

4. Brands are using pop-ups to delight customers and meet them where they already are

Pop-up shops are temporary stores or retail experiences that brands use to reach new customers, boost engagement, and increase brand awareness. They’re also becoming increasingly popular with companies that want to capitalize on event traffic or scout new brick-and-mortar retail locations.

For example, Alexis Bittar wowed customers at Art Basel 2021 in Miami with a unique pop-up shopping experience hosted inside a classic gold Volkswagen van parked outside the Faena Hotel. The micro-store provided access to the considerable foot traffic created by the event and exposure to a wide range of prospective customers. In addition to selling merchandise, the stylish scene encouraged visitors to pose for selfies between shows, generating social buzz.

Shopify’s mobile point-of-sale (mPOS) is a mobile selling solution that allows retailers to take payments from their mobile devices, which can make it easy to convert customers at pop-up retail locations or events.

💡 PRO TIP: Tap to Pay on iPhone for Shopify POS is the fastest way to start selling your products at events, farmers markets, or wherever your customers are. Download the Shopify POS app on your iPhone to accept contactless mobile payments without having to buy hardware or a card reader.

5. Omnichannel is the new norm

Today’s consumers expect to be able to shop in-person, online, and through marketplaces and social media channels. They also expect brands to seamlessly integrate physical and digital shopping spaces for a unified customer experience.

Sophisticated retail technology can help retailers meet consumer expectations and maximize conversions across physical and digital channels.

Omnichannel retail technology can help brands achieve the following:

Offer more order fulfillment options 

Some customers want to check out online and return products to a physical store—or browse in-store and buy online. Give shoppers more flexibility by offering more order fulfillment options, such as buy online, pickup in-store (BOPIS), curbside pickup, and click and collect. Use an app like Zapiet to let your customers select a pickup or delivery date while ensuring inventory is available.

Facilitate virtual shopping

Virtual shopping apps like HERO allow shoppers to instantly connect with a store employee who’s working from home, in-store, or at a head office, via chat, text, or video. During these real-time conversations, store staff can provide tailored product recommendations, and customers can ask questions, browse your store online, and even virtually try on products.

Activate live chat

Add a live chat feature to your website so shoppers can instantly contact you or your staff with questions while they browse online. Answering questions quickly and giving shoppers the same level of service they’d experience in-store will help enhance customer experience and your conversion rate. You can use Shopify Inbox to activate live chat on your ecommerce website.

Enable contactless checkout with QR codes

Shopify’s Shopcodes app is an easy way to generate QR codes. Place them on product price tags to direct shoppers to product pages on your website or let them buy items in-store and have them shipped to their home address.

Provide a seamless customer experience

Ecommerce technology can help retailers gather data like history, browsing behavior, and personal preferences from multiple sales channels and store it in a centralized location. For example, brands can use social commerce data gathered from Facebook, Instagram, and other social media platforms to personalize the shopping experience online as well as in stores.

Allbirds uses Shopify Plus to create a centralized home for all customer information, allowing the retailer to offer a unified shopping experience across sales channels. It also uses Shopify’s POS to maximize its number of checkout systems per store, offer buy-in-store and ship-to-customer services, and base inventory decisions on location-specific customer data.

6. Brands are leveraging AI to enhance personalization capabilities

Customers increasingly expect brands to personalize all aspects of the shopping experience. A 2021 McKinsey report found that 71% of consumers expect personalized interactions and 76% experience frustration when these experiences aren’t delivered. Consumers respond particularly well to sophisticated personalization strategies, referred to by McKinsey as hyper-personalization. Hyper-personalization includes “unique messages for individual decision-makers based on their needs, profile, behaviors, and interactions—both past and predictive.”

Brands are using artificial intelligence technologies like generative AI tools to meet customer expectations and improve personalization (and hyper-personalization) capabilities across the shopping journey. Two major applications include AI-enabled search and discovery and personalized marketing messages. Here’s an overview of each:

AI for search and discovery

Increasingly sophisticated AI tools can support natural-language search, which makes it easier for customers to navigate large product catalogs. They can also make product recommendations (reported to be among customers’ most appreciated types of personalization) based on a user’s browsing behaviors and demographic information.

Shopify apps like Boost AI Search & Filter and the Rep AI integration can enable conversational search and deliver personalized product recommendations.

Personalized sales and marketing

Brands can also use AI tools to support their marketing efforts and customize marketing messages based on an increasing amount of consumer information.

For example, brands can use AI to analyze demographic data, browsing behavior, and buying patterns, and develop marketing messages and deliver them at the optimal time to encourage conversion. A customer with a habit of making $80 to $120 purchases on Thursday and Friday afternoons and a search history that includes “best chefs knife” might receive a Thursday afternoon SMS coupon bringing a previously viewed model into their preferred price range.

7. Brands are using AR shopping experiences to boost conversions

Augmented reality (AR) technologies overlay or integrate digital information into a user’s environment, and consumers are increasingly interested in AR-enhanced shopping experiences. According to 2022 data, more than half of shoppers across all age demographics are interested in AR for the following purposes:

• Trying on new clothes, shoes, or accessories

• Seeing a piece of furniture or home décor in their home

• Seeing a new paint color on home walls

• Trying new makeup or a new hair color

Numbers are particularly high for younger consumers; 92% of Gen Z and 90% of millennials express an interest in trying clothing, shoes, or accessories using AI technology. Research also shows that digital product pages that have 3D or AR features have a 94% higher conversion rate.

Retailers like Sephora and Rebecca Minkoff are taking advantage of this by using AR technology to connect their digital and physical storefronts—and brands of all sizes can use Shopify AR to follow suit. Shopify’s AR technology can help you level up your customer experience with (AR), virtual reality, and 3D media and provide a consistent customer experience across channels.

8. Sustainability is influencing consumer choices 

Ethics, values, and transparency are increasingly important to shoppers. In fact, 82% of shoppers want brands to align with their values. Consumers across all age groups are also increasingly invested in sustainability and willing to pay more for sustainable products. Both trends are particularly pronounced among younger consumers; 91% of Gen Zers reportedly indicate a desire to purchase products from companies with sustainable business models.

Embracing a sustainable business strategy can help retailers identify opportunities to reduce environmental impact, such as switching to sustainable packaging or offering environmentally friendly shipping options. In addition to meeting changing consumer preferences, increasing sustainability can also help businesses cut costs and reduce long-term risk exposure.