In today’s evolving retail world, small businesses must stay up-to-date to stand out against big competitors. By embracing the key retail trends of 2024, you cannot only compete but also find your own place in the market. This proactive approach ensures success by keeping up with what customers want and leveraging innovative technologies to improve operations.
1. AI Is Becoming Increasingly Important
Artificial intelligence (AI) in retail is becoming an essential trend, as currently, just over a quarter of retailers (28%) regard AI as a “top investment priority.” It enables businesses to optimize operations, enhance customer experiences, increase sales, and powers faster innovation.
AI benefits retailers and shoppers alike by helping improve the shopping journey, personalizing the buying process, and streamlining critical processes like inventory management.
Here are a few of the top AI trends in retail:
- AI-generated product descriptions and enhanced product photos are becoming the standard, enabling retailers to provide accurate and engaging content in a fraction of the time and dramatically reduce return rates.
- Virtual assistants and chatbots are improving customer service by handling inquiries 24/7, providing instant responses, and freeing up human staff for more complex issues.
- Predictive analytics are being used to forecast trends and demand, allowing retailers to stock precisely what their customers want, reducing excess inventory and increasing sales.
2. Retailers Are Adopting Automation
Automation is reshaping retail by streamlining operations and enhancing customer experiences. According to a report by Mordor Intelligence, the retail automation market size is currently estimated at $17.46 billion in 2024, and is expected to reach $37.38 billion by 2029.
Plus, 73% of consumers prefer local retailers to automate at least one task in their purchase journey instead of using staff, and 44% want an automated tool to get more product information and availability.
Working hand in hand with AI, this retail industry trend reflects a growing demand for efficiency and convenience, encouraging retailers to adopt technologies like self-service kiosks and automated assistants. Automation is also powering fraud prevention to identify high-risk transactions, payments, or customers—safeguarding retailers from potential losses and maintaining customer trust.
These tools not only meet customer expectations but also provide operational benefits such as cost savings, reduced risk, and improved insights while extending automation to backend processes like administrative duties and data analysis.
3. AR and VR Are Bridging In-store and Online Shopping
Augmented reality (AR) and virtual reality (VR) are enhancing the way consumers interact with products before making a purchase. These immersive technologies bridge the gap between digital and physical shopping experiences, offering a unique way to explore products in detail without needing to see them in person. This aids decision-making, improves conversion rates, and reduces returns.
For example, AR enables customers to see how furniture would look in their homes or how a pair of glasses would fit their faces in a virtual fitting room. Meanwhile, VR experiences can transport customers to virtual showrooms or fashion runways, offering an engaging way to discover new products.
Moreover, AR and VR offer retailers innovative avenues for branding and marketing, creating memorable experiences that build brand loyalty and drive engagement. They also provide valuable data on customer preferences and behavior, allowing for more personalized marketing strategies and product development.
Ecommerce stores equipped with AR features allow shoppers to preview an item in their space before purchasing. (Source: PCMag)
4. Retailers Are Setting Up Shop in the Metaverse
Another technology at the forefront of retail trends is the metaverse, which is more than a digital tool but a whole new dimension, platform, and customer base for innovative retail experiences.
In the metaverse, retailers have the opportunity to create unique, interactive storefronts and experiences that go beyond the physical limitations of traditional retail. Customers can attend virtual fashion shows, explore digital malls, or test products in lifelike simulations, all from the comfort of their own homes. This not only enhances the shopping experience but also opens up new avenues for customer engagement and brand loyalty.
Moreover, the metaverse allows for transactions using digital assets and cryptocurrencies such as Bitcoin, Ethereum, and Non-Fungible Tokens (NFTs)—attracting a demographic that is young, tech-savvy, and financially affluent.
Leading brands such as Nike, Gucci, and Balenciaga, have invested significantly in metaverse initiatives, which have already revolutionized their approach to digital retailing. Meanwhile, small businesses have other opportunities to take advantage of this tech retail trend, including utilizing gaming platforms, collaborating with influencers within the metaverse, and employing VR and AR technologies to offer virtual experiences.
A Gucci metaverse storefront allows shoppers to virtually browse, try on, and purchase its products. (Source: CNET)
5. New Technologies Are Optimizing Day-to-Day Tasks
AI, automation, and immersive platforms like the metaverse are some of the headline-grabbing tech in retail trends. However, other emerging technologies are seamlessly integrating into the retail process. These new innovations are gaining traction by helping retailers optimize operations and enhance customer experiences.
So what exactly are these new retail technologies? Here’s a rundown of the latest trends in retail:
- Self-serve in-store options, such as companion mobile apps and self-checkout kiosks, are improving the customer experience while providing retailers with richer data.
- Integrated inventory management systems are turning stores into fulfillment centers for click-and-collect shoppers.
- Counters and other tools to determine foot traffic are providing more than just total store visitors.
6. Gen Z and Gen Alpha Are Redefining the Market
As Gen Z and Gen Alpha gain a larger share of consumer spending power, their unique preferences are influencing the retail trends of 2024, introducing new perspectives to the market:
- Early Maturity: From a young age, Gen Alpha prefers adult-focused products and brands over “kiddie” offerings.
- Purpose Drive: More than previous generations, Gen Alpha prioritizes purpose, ethics, and global issues, underscoring the need for retailer alignment with these concerns.
- Peer Connection and Authenticity: Valuing genuine connections, younger consumers seek brands that foster community and authenticity over superficial marketing.
- Seamless Omnichannel Experience: Younger consumers expect effortless transitions between digital and physical shopping, prompting retailers to enhance technology for consistent experiences across platforms.
- Experience Over Product: Gen Z and Alpha favor spending on experiences, leading retailers to develop experiential retail through events and demos.
- Mental Health Awareness: With 75% of 8- to 10-year-olds aware of mental health, its support is becoming key in influencing brand affinity and purchasing choices.
- Innovative Payment Solutions: These tech-savvy generations are adopting new payment methods like mobile payments and buy now, pay later schemes, encouraging retailers to offer diverse payment options.
7. Retailers Are Offering More In-store Return Options
Many of today’s online shoppers use both online and in-person channels for the same purchase, which impacts retailers’ reverse logistics processes. For starters, online purchases are more frequently returned than in-store purchases—30% for the latter compared to 10% for the former, according to Deloitte.
It’s a costly problem—each return can cost 15–30 cents for every dollar in handling. Plus, it’s not going anywhere. As many as 81% of retailers believe returns will increase in the coming year, according to a survey from Contentstack.
Many of those consumers turn to in-store channels to make those returns, as it speeds up the refund process and also eliminates return shipping costs and hassle. Some retailers have turned to “return bars,” which essentially act as a station where shoppers can bring their returns to be packed and shipped for them. These bars can reduce return processing costs by more than 20%, Deloitte reports.
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8. Online Shoppers Make Bracket Purchases
As an added hurdle to returns challenges, the practice of making “bracket” purchases is on the rise. This is essentially when someone purchases the same product online in a range of sizes, colors, or variants. They intend to try the items at home and keep just one or a few while they return the rest. According to Deloitte, just under half of consumers partake in this retail trend.
Retailers can combat this with accurate product photography, descriptive product copy, and even virtual fitting rooms.
9. Social Commerce Continues to Grow
Social commerce, or the practice of selling via social media channels, is next on our list of current trends in retail to watch. Social media has been an important part of retail for a while, and it has evolved to offer in-platform shopping experiences—reducing friction and making it easier for retailers to drive online sales via social media marketing.
Per ecommerce statistics, more than half of consumers aged 26–41 years have made at least one purchase on a social platform. Offering social commerce to your customers isn’t as difficult as you might think. In fact, many ecommerce platforms offer integrations with Facebook, Instagram, TikTok and other top social channels to simplify the process.
Jewelry brand Hunterhue, for example, has added the Instagram Shop app to its Shopify website, so its followers can make a purchase directly from social media without having to visit the website.
Shopify allows you to sell directly from social apps like Instagram, like this HunterHue shop page. (Source: HunterHue)
Start selling your products through social platforms:
10. Retailers Are Expanding to New Selling Channels
According to Retail Dive, 81% of retailers have plans to expand the number of channels they sell on. As much as 43% of revenue comes from online channels. However, this isn’t making the brick-and-mortar shop obsolete. Quite the contrary, as we’ve seen with other retail trends on this list.
Here are some resources to help you explore other selling channels:
11. Stores Are Having Inventory Challenges
As retailers accommodate new consumer behaviors and expand to new channels, emerging trends in retail include challenges when it comes to managing inventory. According to Contentstack’s survey, “store inventory accuracy” is the top challenge when it comes to managing the digital aspects of the business.
There are other inventory-related challenges ranking high for retailers in 2024 as well, including inventory data and visibility.
This means it’s more important than ever to utilize the best inventory management software for your needs, as well as a POS with inventory capabilities. Syncing these systems up with both your online and in-store channels will ensure real-time data syncing and updates.
12. Supply Chain Issues Are ‘The New Normal’
In the evolving retail landscape, the concept of the “new normal” in supply chains has emerged as a big retail industry trend. This shift is characterized by ongoing challenges such as supply and demand imbalances, labor shortages, and logistical disruptions, all of which impacted the industry since the COVID-19 pandemic.
These supply chain problems compel retailers to adopt more agile and resilient supply chain strategies to avoid stockouts, minimize losses from transportation issues, and reduce inventory carrying costs.
As a key part of broader retail trends, the “new normal” for supply chains emphasizes the importance of technological innovation and strategic flexibility.
13. Prices Are on the Rise
With post-pandemic inflation putting a squeeze on discretionary spending, retailers are looking for ways to recuperate from these losses. According to a report by Digital, over half of retailers have already increased prices by 20% or more on average.
Looking forward into 2024, 48% of businesses in the consumer sector plan to increase their prices in line with inflation this year, with an additional 20% intending to raise prices even higher or significantly higher than inflation.
While this is often not recommended as the go-to solution, global economic circumstances may allow more leeway for retailers, as consumer spending rose 2.5% last year despite financial challenges and price hikes.
14. Sustainability and Ethics are Consumer Priorities
Ethical consumerism is emerging as a key retail trend in consumer behavior, with a growing number of shoppers prioritizing products that are sustainable, environmentally friendly, and socially responsible. This shift is causing retailers to integrate ethical practices across sourcing, marketing, and operations to align with these evolving expectations.
Common areas of concern for buyers include fair labor practices, animal welfare, and reducing carbon footprints. Businesses are not only adapting their product strategies but also enhancing transparency in order to meet consumer demand for ethical products.
In fact, a recent survey found that 82% of consumers prefer brands that mirror their values. As challenges like climate change and social inequality progress, the retail industry is likely to see an increased focus on ethical consumerism, further shaping how products are made, marketed, and sold.
Frequently Asked Questions (FAQs)
These are some questions we typically encounter about emerging retail trends. Click each to learn more.
Small businesses can adapt to the latest retail trends by embracing innovation, understanding evolving consumer needs, and leveraging technology. Emphasizing personalized experiences, enhancing online presence, and adopting AI-driven analytics can help them stay competitive in a rapidly changing market with shifting consumer preferences.
The future of retail trends is dynamic and technology-driven, with Gen Z and Gen Alpha consumers heavily influencing the market. AI, automation, and immersive experiences like AR and VR will continue to grow in popularity. Retailers must prioritize omnichannel strategies, sustainability, and customer engagement to stay competitive.
New retail trends are driven by changing consumer preferences, technological advancements, and market dynamics. Consumer demand for convenience, personalization, and sustainability has largely influenced the latest trends, while the benefits from AI, automation, and immersive technologies have helped retailers enhance customer experiences, streamline operations, and improve profit.
Bottom Line
Trends in the retail industry are constantly changing, and sometimes it seems the industry is changing faster than ever. When big box retailers can’t keep up, small business retailers have a great opportunity. Keep these trends in mind when starting a new retail business or looking at ways to grow one you already have.
