Insights into Retail: Current Market Dynamics and 2024 Trends

2024 is set to be a big year, with elections due both here in the UK and in the US.

Although the American election is likely to be its impact on global events, our own election is going to have a more significant effect on matters closer to home. That will, of course, include the economy, especially given the potential change of government after 14 years of a Conservative government. The retail sector will be awaiting the outcome with keen interest to see how both consumer confidence and interest rates shift after the results are announced.

With that in mind, it’s worth taking a look at where the retail sector stands at this early stage of the year before we start trying to understand what trends we can expect from the rest of the year.

Whether we like it or not, the effects of the 2020/21 pandemic are still being felt across the economy. Throw in the cost of living crisis, the dramatic rise in energy prices, higher mortgages and interest rates, it should be no surprise that retail sales volumes in 2023 remained below 2019 levels.

Those higher interest rates also mean consumers are more likely to be wanting to save rather than to spend for the first time in over 15 years and for the foreseeable future.

2023 ended with further bad news for both traders and the government, with official figures showing that the UK had slipped into recession, with GDP shrinking by 0.3% in the three months to December, following a 0.1% drop in the previous quarter.

According to the Bank of England and the Office for Budget Responsibility, the outlook for 2024 is that economic growth is at best going to see only modest growth, while at worst could remain flat (given no further unforeseen external events). The Office for Budget Responsibility further expects to see UK living standards fall by 3.5% in 2024/25 when compared to the levels that existed before the pandemic.

Given the difficult trading environment, what trends are we likely to see develop as retailers attempt to find other ways of winning back the business lost in the last few years?

Here are three significant retail trends we’re expecting to see in 2024:

There is, understandably, considerable concern regarding how artificial intelligence (AI) is going to be changing our world in the years to come, with the main worries surrounding everything from lack of faith as a result of deep fakes to losing control of the technology entirely as it learns and grows faster than we can keep track of.

Nevertheless, AI offers considerable potential for retailers as it learns and understands consumer behaviour and takes some of the load off owners and staff.

Among other things, AI might soon be able to:

• Provide more hyper-personalised recommendations regarding other products and services the customer might be interested in based on previous browsing and buying.
• Act as automatic chatbots online that could answer questions, collect feedback, manage order tracking queries and even advise as to whether an item of clothing might fit and/or suit the customer.
• Read and understand facial expressions and reactions when customers are trying on or viewing items in-store.

Even while advances in technology become increasingly vital to retailers’ growth, it’s essential that they don’t lose sight of the human element to the in-store experience for their customers.

The big battle for many retailers is getting people into their stores, and once that has been achieved, making sure that they stay there and/or come back in the future.

So, while self-checkouts will continue to grow in some sectors – potentially freeing up staff to be able to offer a more personalised shopping experience in different areas – we may equally see some stores row back and reintroduce staffed checkouts, as Booths supermarkets did in all but two of their 28 stores in 2023.

It’s likely to prove a fine balancing act for many stores finding the right way to engage the benefits of modern technology without alienating their customers in the process.

In this climate of ‘reuse and recycle’ – to help protect the environment and reduce the use of precious materials and resources – many retailers are now looking to introduce more sustainable products and services into their range.

While repair and refurbishment is familiar in some sectors – Currys has been actively involved for a while now, achieving annual sales of over £675 million according to their most recent figures – 2024 is likely to see the concept reaching further to other sectors.

For instance, luxury fashion brand Coach has launched its Coachtopia brand selling ‘upcrafted’ products, while Selfridges is aiming for at least half of its sales to be generated through resale, repair, rental or refills by 2030.

Barclaycard Payments is reporting £7 billion already being injected into the UK economy through recommerce, with that figure only set to increase as shoppers seek more sustainable purchases while also struggling to manage on reduced levels of disposable income.

We have created a whole range of eco-friendly products, which offer sustainably sourced and manufactured options for packaging, hanger, mannequins, furniture and much more.

In 2024 we have also already launched a new range of eco-friendly hangers, made from recycled sea plastic, which are so sustainable they actually have a negative carbon footprint!

Whatever 2024 brings, you can be sure that here at Morplan, we’ll be providing the same exceptional support to the retail sector you’ve come to expect. With a fantastic range of great value retail supplies available for easy order through our online store plus free delivery on orders of £149+, we’re determined to help customers through difficult times to emerge stronger than ever.

Get in touch with us to find out more or order your retail supplies online now.