National Retail Federation (NRF) is an organization that conducts research and provides insights on retail trends. Each year, they hold NRF: Retail’s Big Show, where thousands of retail professionals, industry experts, and technology vendors from around the world come together and learn about the latest trends in this ever-growing field. The conference focuses on many aspects of retail, including ecommerce, customer experience, emerging technologies, and retail strategies.
NRF 2024 was in New York City at the Jacob K. Javits Convention Center. Fluent Commerce once again exhibited at the event. Let’s dig into some of the trends for 2024 and what this means for the future of the retail industry.
Key Takeaways
Disruption is the new norm
While many markets recognize a general trend within retail businesses, disruptions can cause these trends to change. Fluent Commerce spoke with many retailers during NRF 2024 who accept disruptions as a regular part of running a retail business. In the past few years, Fluent Commerce has seen examples of the following disruptions:
Economic disruption
The world has seen much economic disruption, from the pandemic to inflation. This has changed how consumers shop. It has also caused businesses to re-evaluate their strategies, teams, and investments.
Supply chain disruption
Retailers saw just how important supply chain resilience is over the past few years with the global pandemic and obstruction of the Suez Canal in 2021. Shoppers, warehouses, and transportation services were all affected.
Digital disruption
Digital shopping continues to rise in popularity. This means companies must change their strategies to accommodate shoppers’ needs. When it comes to digital disruption, retailers must think about:
- How to use data and AI to customize the customer experience
- Mobile and social commerce
- How to use technology to streamline operations
- Omnichannel retailing
- The value of composable commerce
Retailers are still optimistic about disruption. It encourages innovation to face these challenges. For example, FedEx projected that online retail sales will meet $8 trillion or more by 2026.
Omnichannel puts the customer at the center of everything
Much of the NRF 2024 conference focused on returning to the basics. This means putting yourself in the consumer’s shoes to understand their fundamental expectations and needs. Customers must be placed at the center of everything. This gives them enhanced shopping options and a positive customer experience. It also gives them the knowledge to make informed purchasing decisions.
Pervasive use of AI through the industry
Artificial intelligence (AI) technologies are taking the world by storm. This trend is not expected to slow down soon. AI is only going to become more prevalent, especially within retail spaces. AI was one of the main topics of conversation at this year’s NRF 2024 conference, with retail experts highlighting its unique advantages to the market. It was clear that AI’s role in the retail market quickly changed from a buzzword to an essential component.
Many large and small companies are researching and investing in AI technologies. Although this technology is still in its early stages, retail businesses must stay ahead and understand how these technologies work.
Prioritizing data
Data is essential when tracking customer behaviors and marketing strategy effectiveness. It monitors customer actions, typical patterns, and other factors. This improves the customer experience and curates recommended products specific to their interests. Primark Corporation CTO David Robertson states, “Data is to AI, what inventory is to retail.”
Another aspect of data collection is how companies store the data. This is just as important as the data itself. Businesses must find safe, efficient ways to store data and protect consumers. David Herridge, EVP of Global Value Chain Technologies at PVH Corporation, says companies can tackle this by finding the right partner.
A focus on blending AI with human insight
The main point in the conversation about AI is combining the technology with human insight. During the NRF 2024 conference, retail experts highlighted that AI technology can be used as a tool to improve human insight. In other words, humans look at AI-generated content before distributing it to the public. This helps to “make technology invisible so the human can shine,” according to Smita Katakwar, Senior VP of Technology at Wegmans Food Markets Inc.
Starting small with AI projects
To add AI technologies into the business, organizations should start with small AI projects. Estée Lauder uses AI technology for inventory management and documentation processes. This creates efficiency in the employee experience. A problem that large retail businesses often run into is having more ideas than employees to accomplish them. AI solves this by generating the project, which employees review for quality assurance.
Big businesses with ample budgets are researching and investing in AI
Large companies are researching and investing in AI, and this was highlighted throughout the 2024 NRF conference. Anton Vincent, President of Mars Wrigley NA & Global Ice Cream Mars, discussed how they opened an AI lab at their headquarters. This helped to produce an ad that delivered the same message in 40 different ways.
Businesses like Macy’s and Salesforce also understand the importance of AI in learning and growing within the retail market. But consumer conversations around AI have not been positive, with recent examples of AI technology earning distrust from the general public. Salesforce Chair and CEO Marc Benioff knows this, encouraging retail businesses to establish sufficient customer trust while integrating AI technologies into their business strategy.
AI use cases and results
Many companies are already using AI technologies in their business strategies. For example, Gucci’s 300-agent call center in Milan currently uses generative AI to craft agent responses. These responses are delivered via phone, email, or WhatsApp. Since implementing this technology, Gucci has seen an increase in revenue by 30%.
Sainsbury’s also uses AI to evaluate supply changes. Because they have many demand factors, AI technologies make it easy to decide which products they need at which store and at what times. Since implementing these processes, Sainsbury’s has seen a 2% increase in availability.
From these examples, businesses see that AI technology streamlines staff-based operations, including:
- Personalized and guided processes
- Transformative potential in hiring, training, and retention
- Task management systems
Social Responsibility & Sustainability
There has been a shift in consumer habits. Customers no longer look just at a brand name. Now, they consider what brands do to serve communities. Gen Z is the generation to kickstart this shift. 74% of Gen Z consumers value sustainability over big brand names. This means marketing focuses must change from establishing well-known, trusted brands to finding ways to become sustainable.
Many companies are already making these changes. Michael Jeschke, Principal at Deloitte Consulting LLP, says 25% of business leaders invest in sustainable practices. FedEx has started offering sustainable shipping options, which has increased cart conversions.
Mars has also invested $1 billion into finding a new cocoa supply chain. This will lower the impact on ecosystems while supporting efforts with sustainability and diversity. Moët Hennessy is another company enhancing their sustainability missions. They switched from plane to ocean transportation to reduce carbon emissions.
Other companies are making promises for social responsibility. For example, PepsiCo aims for net zero emissions across the entire value chain by 2040. This includes strategies for sustainable packaging and an all-electric fleet.
Leveling up the in-store customer experience
Although online shopping is becoming more popular, big companies shouldn’t forget the in-store customer experience. Technology plays a huge role in running businesses efficiently. It can speed up check-out times, inventory management, and returns. This improves the customer and employee experience.
Steve Madden uses mobile apps to manage inventory, clientelling, PO fulfillment, and returns. This allows them to complete processes, like checking inventory, from anywhere in the store. Integrating modern technologies into in-person stores can also hasten employee onboarding processes.
Inventory Visibility
Businesses need technologies that provide accurate inventory updates for inventory-aware ads. Modern technologies can enhance inventory visibility within a business. For example, Wegmans Food Markets Inc. uses technology to view products customers wanted to buy but couldn’t because they were out of stock. This has helped the company decide which products to prioritize when stocking.
Technology has also helped businesses measure phantom inventory. This is when products have been sitting on a shelf for long periods. While inventory systems detect that the product is still in stock, it may not be of high quality. The product also might be damaged from sitting on the shelf for so long. This can result in a loss of sales. New technologies update inventory systems regularly. This gives businesses a more accurate look at their stock.
Other Observations
Luxury Retail remains resilient while innovating
Luxury retail caters to affluent consumers. This means they are less affected by factors like the global pandemic, mass unemployment, or inflation. This has kept luxury retail resilient. Younger consumers are also becoming more interested in luxury brands. This means online shopping has made luxury items more accessible to consumers. But luxury brands are just that – luxury. They must find new ways to set themselves above other brands so consumers continue to see them this way.
Modern, omnichannel point of sale (POS) systems are one way luxury businesses can set themselves apart. In addition to improving customer satisfaction, POS systems also impact the employee experience.
Returns are the new battleground for post-purchase customer experience
Consumer returns are another important aspect of improving the customer experience. According to Raj Subramaniam, president and CEO of FedEx, “96% of consumers will shop again with easy returns.”
To keep up with an ever-changing market, retailers should evaluate their orders at every stage, including post-checkout. Modern technologies help streamline returning processes, which encourage repeat customers.
Learn More Retail Industry Trends with Fluent Commerce
Retail businesses can find innovative, modern solutions to business processes at Fluent Commerce. Fluent Commerce provides a Distributed Order Management system to retail companies across the U.S. Many retail businesses use it as they set trends and break into new markets. Users can subscribe to Fluent Commerce’s newsletter to discover more retail industry trends for 2024. Schedule a demo to learn more.
