Today, 64% of the world's 8 billion people use the Internet. This is twice what he was 10 years ago. Internet access has disrupted consumer life, including the way we shop. Euromonitor International predicts that consumers will spend nearly $11 trillion on the goods and services they purchase online in 2024.
This growing digital base must be at the heart of your retail strategy. Last week at NRF 2024: Retail's Big Show, I talked about the digital shopper trends that will have the biggest impact on retailers and brands. Let's break down three big things to watch in 2024.
intuitive e-commerce
The growing influence of digital channels among consumers is forcing businesses to improve their online experiences. This is becoming possible through evolving data collection strategies and new technologies, from ARAR to IoT to generative AI. These advances have the potential to transform the online shopping experience and make it more intuitive.
Consumers have higher expectations. Almost half of digital consumers want unique products. Fifth is the desire for a more personalized shopping experience. In both cases, these sentiments are stronger among the most digitally savvy, according to Euromonitor consumer research. This is evident as the shift towards more intuitive experiences is playing out across digital channels where consumers shop more frequently.
In part, this means ensuring that online channels more closely resemble what consumers experience in real life. While a variety of data and technologies will be used, generative AI is poised to play a central role in shaping online experiences. Generative AI can be leveraged in a variety of ways, from improving customer service to tailoring marketing messages to optimizing supply chains.
Generative AI-powered virtual assistants can create more intuitive experiences by using additional sources of information for additional context. Zalando's new chatbot provides suggestions based on natural questions shoppers might ask, and in the future will combine them with personal preferences to make the discovery experience feel more intuitive. You can take action.
Almost half of industry professionals say they plan to invest in generative AI in the next five years, according to Euromonitor's Industry Voices survey. New technologies like generative AI can give brands a competitive advantage. Pioneers who can leverage these advances to create next-generation shopping experiences will be the ones driving new shopping behaviors and ushering in the so-called next UberUBER moment.
TikTok economy
Digital consumers are flocking to TikTok and its Chinese sister platform Douyin. While brands strive to promote their products and services on these platforms, which are known for their short-form video content, some of the viral trends that are contributing the most to increasing sales for brands are: It's emerging spontaneously from users.
These ByteDance platforms are not only some of the most popular, but also the fastest growing. According to Euromonitor's Voice of the Consumer: Digital Survey, in 2023, 43% of digital consumers worldwide will report using digital monthly, an increase of 19 percentage points over three years. Increased has. These short video platforms are also known for their infinite scrolling and advanced algorithms, making them popular with younger consumers, especially his Gen Z.
While most marketing campaigns on TikTok are funded or initiated by brands, some of the most viral content is organic. In 2023, an Israeli TikTok influencer posted a video of herself making crunchy, fruit-flavored ice cream cones by wrapping frozen Betty Crocker Fruit Roll Up processed snacks around ice cream. Almost overnight, fruit rollouts began flying off the shelves and a black market formed.
The ByteDance platform is also dabbling in retail. In 2020, Douyin pivoted from a pure social media platform to a retailer, prioritizing smaller sellers with lower fees that supplement their revenue with advertising. Douyin has made significant profits from e-commerce. Online sales of beauty and personal care products on Douyin's marketplace surged 81% in the nine months of 2023 compared to the same period in 2022, according to Euromonitor's new e-commerce research. As for TikTok, the TikTok Shop has been successful in Southeast Asia, and in September it opened shops in the US and UK.
improved returns
Consumers have long expected hassle-free returns, but meeting that expectation is not without its challenges. A combination of trends such as the rise of e-commerce, store closures at some retail chains, and increased sustainability strategies are putting profits on the industry's agenda. New technologies and partnerships are paving the way for a more satisfying returns experience for shoppers.
Building a hassle-free returns experience is not without its challenges. First, what is considered hassle-free varies by consumer. 43% of digital consumers cite the mail as their preferred channel for returning online purchases, but preferences vary by generation. For example, baby boomers prefer returns by mail, while Gen Z prefers returns in-store. To solve the unfortunate return experience, the industry needs to change its mindset and see it as more about increasing loyalty than a revenue drain.
Retailers are deploying a variety of tactics to reduce returns, or at least the impact on revenue. Electronics retailer Best BuyBBY will open his 10th small retail store specializing in the sale of used and refurbished electronics. The purpose of these stores is to target budget-conscious shoppers and earn more profit from opened and returned items. More and more retailers are outsourcing their returns experience to companies like Happy Returns and Loop Returns, which provide sellers with a customizable online portal for returns and exchanges.
Until now, many retailers have struggled to understand the pivotal role returns play in building customer loyalty and have therefore ignored this moment. That is changing. According to Euromonitor's Voices of the Industry: Retail Survey, two-thirds of retail experts say they plan to continue or accelerate their investment in product returns.
For the future
These trends demonstrate how online shopping continues to mature and improve the customer experience from the moment of discovery to potential product returns. The second theme is how consumers want more power in their relationships with brands. The TikTok economy is rooted in how consumers are using social media to gain power in value exchanges, and improved returns demand more conscious consumption options from retailers and brands. Partly driven by consumer desire.
As you begin executing your 2024 strategy, use these insights to guide your campaigns, decisions, and growth plans for the most digitally savvy consumers.
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