The Four Retail Trends Poised to Make an Impact in 2024

By Andrea Polonioli, Senior AI Product Marketing Manager, Coveo

Despite last year’s gloomy economic forecasts, consumers proved the experts wrong and delighted retailers by spending more than expected over the 2023 holiday season. In fact, retail sales were up by 0.6% in December, closing out the year on a high note, and year-over-year retail sales increased 5.6% in 2023 while online sales hit new highs of $1.377 trillion.

As brands look to keep the post-holiday sales momentum going by engaging new and returning customers in 2024, technology will continue to be the differentiator that enables 1:1 personalization and shopping journeys that better bridge online and offline channels -- driving higher average order values and revenues.

While brands will face some of the same 2023 challenges this year, they’ll also encounter new revenue opportunities as the normal ebb and flow of commerce returns, and as they ramp up operations for new shopping peaks such as Valentine’s Day.

Some of the key challenges and technology trends that will make a big impact on retailers’ strategies and success this year are:

Retailers will continue to have AI on the mind this year but will focus on separating genuine opportunities from the hype by distinguishing between quick wins, distinctive use cases, and transformational initiatives. One area of exploration will be how to generate relevant answers to shoppers’ complex questions about products – a critical use case that will drive significant benefits by facilitating enablement and better product discovery.

Retailers and B2B brands are looking for ways to measure and understand the real benefits of AI. In particular, “de-risking” tech investments have become increasingly important for retailers and will continue to trend in 2024 as more brands look for ways to experience and measure the potential impact of AI more actively than traditional POCs.

Additionally, retailers are finding that most approaches on the market just add ad hoc business rules on top of underlying search engine and recommendation systems, and this can compromise overall relevance and the customer experience. The trend towards multi-objective ranking optimization will equip retailers with better ways to strike a balance between customer experience and KPI optimization in product discovery.

With 86% of ecommerce shopping sessions originating from anonymous users, delivering personalized experiences has become increasingly complex and important for brands and retailers, and will remain so next year. Brands will continue to face challenges such as profile data availability, third-party cookie deprecation, lack of user authentication, and the inability to recommend products until the “cold start” shopper “warms up.” In 2024, more retailers will recognize the importance of overcoming the cold start challenge and consider innovative ways to leverage in-session contextual signals for 1:1 personalization.

We’re seeing composable commerce gaining momentum across both B2C and B2B, with an increasing number of brands, retailers, and manufacturers shifting away from monolithic commerce platforms to modular, composable services. We’ll see more retailers lean on composable commerce and the flexibility, agility, and support it affords in 2024, as well as its ability to transform complex customer journeys into connected experiences across multiple touchpoints.

The retail landscape is undergoing an unprecedented transformation driven by technological advancements in machine learning,artificial intelligence and generative AI (GenAI). As 2024 evolves, brands can meet the expectations of today’s consumers by leveraging these technologies to deliver generative answering, better product discovery, and highly relevant 1:1 personalization.