Brand Innovators 2024 Outlook: Retail
For retailers, the focus will be on offering consumers value, digital innovation and enhanced retail experiences.
Despite inflation and high interest rates, consumer spending at retail has remained steady this year and NRF predicts a 3-4% year-over-year growth in holiday spend. As retailers head into 2024, the economy remains a question that will be impacted by war, and the US presidential election. For retailers, the focus will be on offering consumers value, digital innovation and enhanced retail experiences.
“We are seeing a lot of consumers feeling the pinch in their wallets. Whether that is because of the continued drumbeat of inflation or because of the return of student loan payments,” says Katie Mullen, chief customer officer at JCPenney. “We expect consumers to feel that pinch into holiday and next year, so we are looking to do everything we can to make that easier for families who need to stretch their dollars.”
“People who bought a house three plus years ago are in a pretty good spot with regards to their mortgage (assuming they got a good fixed rate), but if you bought recently you might have a different level of disposable income that you may have had years ago,” says Elizabeth Preis, chief marketing officer at Anthropologie.
Offering value will help retailers establish trust with consumers. “2024 is the year of mattering more to consumers. In an ever-evolving economy, delivering on consumer expectations, especially when it comes to value and quality, will be key to establishing trust and fostering loyalty,” says Jeanniey Walden, chief marketing officer at Rite Aid. “Brands that deliver on their promises and find ways to meet the consumer where they are, while doing so in a way that is differentiated and adds value, will result in the most authentic connections and in turn strengthen brand love.”
2024 is an election year and that is certain to impact the culture and impact consumer attention.
“Any election year is painful for a marketer,” says Doug Zarkin, chief brand officer at The Good Feet Store. “From a platform perspective, you will have 10s of millions of dollars in any given time flowing into any given channel that you have to compete with. Any of that mixed media modeling stuff that you did this year, next year, you might as well toss it out the window when you have a primary challenge or a swing state.”
“The election year also creates unsettledness in the economic climate, which impacts discretionary income,” he continues. “Consumer confidence depending on how the Republican primary goes, depending on what happens overseas, depending on what happens with Biden, those things can all impact the way in which consumers think about their income, and frankly, how the economy rebounds. I look at it as an opportunity to bring your best thinking to bear. Brands that can bring their best thinking will have a really good opportunity to win.”
Retailers will continue to look to younger generations to establish long term brand love in the new year. As brands look to connect with Gen Z, expect a focus on both digital and in-person retail experiences. “Gen Z are social creatures. Of course, they live their lives on social media, but they also crave IRL social connections,” says Craig Brommers, chief marketing officer at American Eagle Outfitters. “My 2024 retail prediction: increasing focus on unique physical shopping experiences, whether in existing stores or temporary spaces.”
“As we look forward to retail, we think the trends that accelerated during the pandemic will continue to stay,” says Michelle Peterson, chief marketing officer at Kendra Scott. “This idea that consumers are looking for an experience from both retail and digital. They're looking for an amazing one-to-one experience and luckily been in the experiences from the start. They're demanding more innovation, more technology for their online experiences and demanding that those be personalized to them. The experience demand in both of those channels will continue in 2024.”
David Yurman's chief marketing officer Carolyn Dawkins also expects to see immersive experiences and more growth across the omnichannel next year. “We are seeing more of that blend across multiple platforms,” she says. “As we are starting to expand our retail footprint, creating that full 360 journey for the consumer throughout the brand is really important. Consumers are looking for a more elevated experience when they are touching the brand. They want to be able to be recognized. They want various touch points, and they want the brands to reflect that. So that's something that we have invested in and will be big for us in 2024.”
Purpose has been a hot topic among brands in recent years and this will likely continue in 2024. “There's still a lot of uncertainty with where things are going in the world in general, but one thing that has remained certain is that people place their dollars and loyalty with brands that they believe in, that are doing good,” says Brad Hiranaga, chief brand officer at Cotopaxi. “There's been some backlash to the idea of ESG, and brands that are greenwashing. But brands that fundamentally believe in doing good is a super powerful idea.”