9 Retail Trends to Watch in 2024

2023 was another disruptive year for the Australian retail industry, with inflation and a cost of living crisis impacting customer spending and consumer sentiment. While it’s always difficult to predict what lies ahead, we expect to see a considerable shift in technology, customer behaviour and the role of in-store and online shopping in the coming year. 

With this in mind, we’ve analysed industry data and customer sentiment to pinpoint the most influential retail trends for 2024 to help retailers prepare for what’s to come in the year ahead.

Let’s dive in.

Retail trends for 2024

1. Adoption of AI will increase
2. In-store retail will remain strong
3. Omnichannel experiences must be seamless
4. Building brand communities will drive loyalty
5. Sustainability will be a hot topic for shoppers
6. Pricing & promotions will remain important for consumers
7. Personalisation will play a key role in retention and loyalty
8. Customers will expect additional services
9. In-store experiences will drive engagement

1. Adoption of AI will increase

In 2023, artificial intelligence (AI) hit mainstream consciousness, thanks to the prominence of programs like ChatGPT, and a slew of AI systems became readily available to the general public. 

The AI market is set for significant growth in the coming years. In two years alone, from 2024 to 2026, the size of the global AI market in the retail industry is projected to grow by 70%.

AI is still in its infancy, and many retailers have yet to harness its potential, but this is set to change in 2024. As AI becomes more accessible, we can expect to see it being utilised in areas like inventory management, merchandising, customer service, fraud prevention and other back-office practices. 

While AI might seem daunting, retailers can only hope to gain from its adoption and harness its potential to eliminate inefficiencies and provide valuable insights and recommendations for improving customer experience.

A recent survey asked a global cohort of retail executives what they thought the most significant benefits of AI would be for retail businesses, with 73% of respondents saying AI will accelerate time to profitability, increase productivity, increase revenue streams and reduce operations costs.

2. In-store retail will remain strong

The Covid-induced eCommerce boom led many to speculate that the brick-and-mortar era was over.

However, our report, Retail Insights & Shopper Sentiment for 2024, points towards the resilience of in-store shopping, and the data highlights a clear appetite for physical retail in 2024, with 76% of consumers continuing to shop in-store at least once a month. 

And it’s not just Lightspeed data pointing towards a demand for physical retail in Australia. A global study of over 50,000 people across 26 countries found that 73% of Australians prefer to shop in-store – compared to the global average of 59%.

Aussie consumers, it seems, crave the tactile experience that physical stores uniquely offer, with our report highlighting how 56% of shoppers visit brick-and-mortar stores to check out products in real life.

This desire to touch, see and experience products suggests that online platforms, while convenient, can’t completely replace the need to physically interact with a product before making a purchase.

3. Omnichannel experiences must be seamless 

Omnichannel has been somewhat of a buzzword in recent years, and while it isn’t a new concept, curating a seamless omnichannel experience will be crucial for retailers in 2024. 

Our report points towards a growing need for omnichannel retail, with 45% of shoppers first researching products online before going in-store to make a purchase. On the flip side, 17% of shoppers do their research in-store and then make a purchase online. 

Therefore, in 2024, we expect more retailers to invest in creating an effortless transition between in-store and online shopping, recognising that consumers expect a unified and cohesive shopping experience. The successful retailer will be the one that embraces the connection between online and physical retail, creating an immersive, omnichannel shopping journey.

One of the most interesting takeaways from our report, in relation to omnichannel experience exposes the pain point of checking in-store stock availability online before visiting a physical store.

Our data shows that 42% of shoppers check online for stock availability before their in-store visits, providing retailers with an opportunity to embrace in 2024. With such a large portion of consumers deeming stock availability crucial, retailers should consider implementing an omnichannel strategy where online and offline channels complement each other.

4. Building brand communities will drive loyalty

Building a loyal brand community will be another key focus for retailers in 2024.

The concept of community engagement will be embraced by retailers in the coming year, and having a strong brand community will be a crucial differentiator for retailers looking to enhance their customer engagement strategy. 

Our data emphasises consumer desire for brands to focus on community engagement and the importance of incorporating various community-centric elements into a brand’s repertoire. 

For example, 24% of consumers value businesses that align with their beliefs and actively contribute to the local community. And 34% of shoppers said access to special deals for locals would encourage them to shop more with a brand.

Therefore, in 2024 we can expect to see more retailers creating spaces (be that in-person events or online forums) where customers can connect with each other and engage with the brand. Not only will this foster a sense of community, but it will also enhance the holistic shopping experience and drive loyalty, turning customers into brand advocates.

5. Sustainability will be a hot topic for shoppers

A recent survey found that 69% of Aussies either always consider sustainability or often consider sustainability in their purchasing decisions. By contrast, only 5% reported never taking sustainability into consideration.

To reiterate this point further, a separate study found that 47% of Australians preferred buying from brands they know are sustainable.

With this in mind, it’s probably unsurprising that sustainability will be a hot topic for retailers in 2024. We can expect to see an increase in sustainable packaging, a reduction in wastage, and sustainable sourcing practices, such as an increase in locally produced products and the localisation of supply chains. 

While sustainability should be a top priority for all retailers in the coming year, the issue will be more pressing for those with a younger clientele and target demographic, who are more likely to align their purchasing power with their sustainable mindset.

For example, in a recent survey among Australian consumers regarding sustainable fashion, 55% of Gen Z and 51% of Millennial respondents said they had purchased sustainable fashion products in the past. In contrast, only 39% of Gen X and 28% of Baby Boomers stated the same. 

6. Pricing and promotions will remain important for consumers

With the cost of living crisis and rising inflation set to last into 2024, it’s understandable that pricing and promotions will be an influential factor in consumer purchasing decisions.

Our report shows that price sensitivity will remain a pivotal factor for in-store shopping in 2024, with 33% of shoppers expressing concern that in-store pricing may be higher compared to online shopping.

38% of consumers also admit they are discouraged by the inability to search for cheaper deals in physical stores, compared to the ease of doing so online. 

Therefore, to retain and attract in-store shoppers in the coming year, it’s essential for retailers to address these concerns by implementing transparent pricing strategies and, when feasible, offering price guarantees.  

7. Personalisation will play a key role in retention and loyalty

Personalisation has been a hot topic in recent years and will continue to be an important factor for consumers in 2024. Thanks to advanced marketing platforms and the adoption of AI, personalisation is now easier than ever for retailers to implement into their strategy. 

Our report found that 1 in 4 shoppers expressed a preference for tailored experiences. Therefore, we expect to see more retailers including personalised product recommendations in their marketing communications and taking a more curated approach to loyalty programs.  

Adding a personal touch and tailoring content so it resonates on an individual level will enhance the holistic shopping experience and foster a sense of connection between brands and consumers.

8. Customers will expect additional services

The role of physical retail is evolving, and customers will expect more from their favourite stores in 2024. In our report, we analysed consumer data to understand what additional services customers want most when they visit a retail store. The results?

• 42% value the convenience of checking online for stock availability before visiting in-store
• 39% favour stores with loyalty programs
• 21% are drawn to gift cards and various gift choices
• 19% would like click-and-collect services
• 15% will shop in a store with layby/buy-now-pay-later options
• 14% value services such as repairs, alterations and similar services

But what does this mean for retailers in 2024?

We touched on this earlier, but it’s an important point to reiterate. With nearly half of shoppers checking online for stock availability before their in-store visits, the resounding message for retailers is clear: Make your in-store inventory visible online and accurate to enhance customer satisfaction.

Interestingly, loyalty programs emerge as the second most highly regarded service, with almost two in five shoppers deeming it a critical factor in their shopping decisions, outweighing other services, such as gift cards and click-and-collect.  

Another interesting discovery is that 14% of shoppers value services such as repairs and 
 alterations, providing retailers with food for thought in 2024 on how they can potentially incorporate these services into their current offerings. 

9. In-store experiences will drive engagement

As we discussed earlier, the demand for in-store shopping will remain strong. However, to further drive customer engagement within physical stores, we can expect to see a surge in in-store experiences in 2024.

In the coming years, retail stores will no longer be seen as transactional hubs. Instead, they’ll transform into spaces that offer unique, immersive experiences, providing an exciting alternative to the mundanity of online shopping. 

In 2024, we can expect to see more stores hosting in-store events such as DIY workshops, in-store demonstrations, classes and talks.

In essence, experiential retail will blossom, and traditional retail spaces will evolve into creative destinations that offer much more than just products – instead turning shopping into an event in itself. And with 86% of shoppers willing to pay more for a better shopping experience, there’s a lot to gain by improving your in-store experience.

Stay ahead of the curve with Lightspeed

2024 brings with it the promise of success for customer-centric retailers who are continuously levelling up their operations and finding new ways to enhance the shopping experience for their customers.

Retailers who take the time to understand potential trends and the evolving retail landscape will be better placed to embrace innovation and customer-focused strategies to thrive in the coming year.