Shoppers are turning to online stores at an ever-increasing volume — and retailers are delivering. In 2021, retail e-commerce sales amounted to approximately 5.2 trillion U.S. dollars worldwide, and it’s forecast to grow by 56% over the next few years. By 2026, 20% of retail purchases are expected to take place online. Plus, it’s important to note that even shoppers who aren’t buying online are looking online: 81% of retail shoppers conduct online research before buying.
So how do you ensure you continue to attract customers, grow revenue, and make the most of your online channels? In this article, we’ll take you through seven trends retailers should prioritize in 2024.
Here are 7 retail trends that are here to stay:
Social commerce is any online shopping experience within a social media app. It relies on influencers, celebrities, and creative content to sell products in a fun, engaging way and without being outwardly sales-y.
Social commerce streamlines the buying process by removing friction between app-to-website navigation. Buyers don’t have to jump from a social app to a website to browse items for sale or make a purchase. Instead, products for sale live in the app. Social commerce also elevates the buying experience by providing an engaging, experiential product touch point and exposure to a large new pool of engaged prospects.
Prime examples: Instagram Shop allows users to tag products in photos and maintain a digital storefront. Instagram users exploring US-based businesses and creators can now check out within the app.
McKinsey reported that in 2021, $37 billion in goods and services were purchased through social-commerce channels in the US. By 2025, that number is expected to swell to more than $80 billion.
What is recommerce? Recommerce refers to the resale of previously owned products. Sustainability is top of mind for today’s online consumers, 73% of whom consider climate impacts when making purchasing decisions. Recommerce offers sustainability-conscious buyers a path toward more responsible consumption, less waste, and better affordability.
More and more brands are leveraging recommerce to gain control over how their second-hand products are marketed, authenticated, and sold.
Prime example: Marketplaces are powering the circular economy as recommerce websites like ThredUp and Poshmark increase in popularity. Brands like Patagonia and Lululemon are also hopping on board, creating recommerce platforms as sister sites that sell previously loved products.
ThredUp’s 2023 resale report found that 52% of consumers shopped for second-hand apparel in 2022. OfferUp’s 2023 report projected that the recommerce market will reach $276B by 2028.
AI is not a new topic, but AI-based technology is becoming more accessible than ever before. To predict behavior, AI-driven personalization connects the dots between cross-channel data points, like past purchases, browsing behavior, and demographic data. Instead of scrolling aimlessly through endless ecommerce aisles, the AI directs consumers to items they’d likely be interested in.
The power of AI can be deployed at many levels of the shopping experience, including personalized search results, product recommendations, email marketing campaigns, pricing, targeted ads, website personalization, and chatbot customer service.
Prime example: Amazon Prime uses machine learning to update product pricing several times a day based on stock, demand, and customer behavior. They also use “item-based collaborative filtering,” which provides personalized product recommendations based on interests and purchasing history.
Personalization is proven to engage customers to the extent that customers have come to expect a level of personalization. Seven out of 10 consumers now expect brands to personalize ads and product recommendations, and 78% are likely to make repeat purchases from companies that use personalization.
AR and VR create an immersive virtual shopping experience where customers can try on, use, or experience a product — without going into a store.
In a world where consumers are buying products without touching or seeing them in real life, AR and VR give customers a sense of how products function. This virtual experience results in lowered returns and increased confidence in buyers making a purchase. A Harvard Business Review study suggests that AR reduces consumer hesitation at check-out points and can result in a 20% higher conversion rate.
Prime example: There is a wide and growing range of AR and VR use cases across industries. For example, the Ikea Place app helps buyers virtually place furniture in their homes, and the Sephora Virtual Assistant allows buyers to try on makeup and compare colors.
By raising conversation rates and lowering return rates, AR and VR are proven to positively impact bottom lines. AR has the potential to produce 200% more engagement than non-AR equivalents. AR also has a growing user base; it’s projected there are around 1.3 billion AR device users today.
Subscriptions allow predictable, recurring income and logistics for retailers. On the consumer side, subscriptions provide a new level of convenience and a set-it-and-forget-it shopping experience.
Prime example: While the subscription model isn’t new, it is evolving. Brands of consumable products, like the Happy Legs Club, offer subscription replenishment. Curated boxes, like FabFitFun, deliver an assortment of lifestyle goods on a regular basis. And, of course, digital content subscriptions, like Netflix, offer new movies and series on the regular.
According to Forbes, the global subscription e-commerce market size is expected to reach $904.2 billion by 2026, an increase of approximately $784 billion from 2022.
Multi-vendor marketplaces offer companies an asset-light way to plant a flag on their market niche. Businesses that launch a marketplace have the potential to experience an average growth of 44% in customers, 42% in overall revenue, 38% in revenue per account/user, and 36% in average order value (AOV).
You don’t have to be a full-scale marketplace to reap the benefits of a marketplace. Traditional ecommerce brands are taking advantage of a hybrid approach to marketplaceification. They use the marketplace business model by adding a few sellers with adjacent products or services, alongside owned inventory.
Prime example: Retail brands like J. Crew, H&M, and Madewell have enhanced their catalogs with the marketplace model.
Marketplaces have become the most popular ecommerce sites. The most visited retail websites of 2023 were Ali Express, eBay, and Amazon. Plus, Amazon accounted for 38% of retail spend in the US. Online marketplaces are the fastest-growing retail channel globally, projected to account for nearly two-thirds of ecommerce sales by 2027.
The more places the consumer lives, the more places you need to be as a retailer. While omnichannel is nothing new, the channels customers use and the experiences they crave have multiplied: podcasts, click and collect, progressive web apps, live stream shopping, synergy between online and in-store experience, and even selling on other online marketplaces, to name a few. Omnichannel opportunities keep expanding, and as they do companies are becoming more creative and agile to keep up.
Prime example:
Nike introduced Nike Membership, providing members with product deals, free shipping, early access to sneakers, and participation in the Nike Run Club App and Nike Training Club App. This membership engages buyers with Nike across several in-person and virtual channels, a true omnichannel ecommerce experience.
Mckinsey once stated, “Offering a compelling omnichannel experience used to be the cutting edge of retail. It is now a requirement for survival.“ The global omnichannel retailing market was estimated to be valued at US$ 7.80 billion in 2023 and is expected to reach US$ 19.51 billion by 2030.
Many of the latest trends are powered by the latest technology. You don’t need to focus on all trends at once when planning your ecommerce growth strategies. But ensuring you’re set up for flexibility and scalability will allow you to embrace trends when you’re ready (and without a total technology overhaul!)
Here are some features to look for in your ecommerce technology to ensure you’re set up for success:
Building a positive ecommerce customer experience starts with the right technology. As today’s retail trends cement themselves as the status quo, a solid software foundation will empower you to adapt and change as new technology, customer preferences, and digital opportunities emerge.
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