It has been quite a ride for retail in 2023. With the ever-rising cost of living, soaring interest rates and inflation, consumer spend habits have been hit.
Shoppers are holding back. They are making more considered purchasing decisions around what and how much they spend, whether it is trading down or buying less - but buying quality. MRI Software, which tracks footfall across UK high streets, shopping centres and retail parks, recently reported that footfall is currently 3.8% lower than 2022 and almost 14% lower than 2019 across UK retail destinations.
This is set to further intensify as we go into 2024. Latest research from Retail Week’s ‘How they’ll spend it 2024’ survey highlighted that almost half of all consumers will be reconsidering their spending ability. So what does this mean for retail?
With consumers taking a more considered approach to spending, bricks and mortar retailers and retail destinations will be looking very carefully at what they need to do over the next 12 months to engage with shoppers. There are a number of key trends that we are going to see coming into 2024 but let’s look at three of the big ones.
IMMERSIVE SHOPPING EXPERIENCES. This is by no way a new idea, but is a continuing trend for 2024. According to Shopify, 40% of brands have already invested in tech to enhance the in-store experienceinviting consumers to live and feel the brand before they buy. It makes the shopping experience more fun and engaging and makes you want to buy!
From touch screens to virtual reality experiences customers are encouraged to understand the journey of the product, or to be transported to another world, a world that signifies an extension of the brand. In the Nike stores shoppers can scan items to view information, or they can enter a VR world to experience the different steps in Nike's supply chain. Tom’s stores use virtual reality to give customers the ability to transport themselves to Peru. Even stores like IKEA, who will enjoy its much-anticipated arrival on Oxford Street next year, have been driving forward this VR and AR experience, where you can place your AI sofa in your room before you buy.
Merging the VR experience with a new trend that we hope will make a massive moment in 2024 is WELLNESS DRIVING RETAIL. Already being mastered well in the work place, how will the trend influence retail? John Lewis have been trialling a multi-sensory experience in their Horsham store. In the ‘sleep area’ shoppers can lie down on a mattress for 10 minutes as they listen to calming sleep sounds and breathe in a refreshing citrus scent.
The Outernet London District on Tottenham Court Road launched a series of multi-sensory rooms this year, to give shoppers the opportunity to escape the hustle of the city. The ‘Room to Breathe’ space which is based on the science of box-breathing, featured functional soundscapes accompanied by rolling cloud visuals, mimicking the expansion and contraction of the rib cage breathing. 84% of those who used the space felt that the experience helped them unwind and destress. What a great way to escape and re-centre between shops!
The London tech firm Xydrobe this year announced the arrival of the ‘one-person experience pod’. The pod has been designed for the luxury retail space. Shoppers who step into the pod are given a multi-sensory shopping experience that allows them to engage with their favourite brands. Shoppers will be transported into a virtual world which will use mind-blowing visuals, tantalising scents, temperature, wind, and sound effects to revolutionise how people experience luxury fashion.
RESALE IN RETAIL has had a MASSIVE moment in 2023 with several retailers entering or expanding into the pre-owned goods market whether by creating a new market place or including buy-back options. This is being driven by a millennial and gen z market, who are affected by the increasing costs of first-hand items. To cater for this demand, Deloitte, in their Global Powers Retailing 2023, have said we should expect future retail models to include ‘mainland, outlet and resale models’. Lululemon and Zara are two such brands that have their own marketplace for pre-loved.
2024 is still all to play for, and though shoppers may look to take a more considered approach to spending, we are going to see brands coming up with some really exciting, customer first and innovative ways to excite and delight all of us ‘shoppers’!