In the dynamic retail industry, competitiveness requires keeping up with ever-evolving customer needs and demands. In 2024, industry experts predict technology implementation will be key to maintaining that edge. Here are some of the retail tech trends to watch next year:
Headless, Composable Web Architecture
Chris Bach, CSO, CCO and Co-Founder, Netlify:
In 2024, skyrocketing customer demand for faster time to market, reducing overhead, and higher conversion rates from faster digital experiences will drive e-commerce providers to adopt headless, composable web architecture at an ever larger scale. Composable web architecture, or a web development architecture, decouples frontend and backend web presences and makes digital experiences customizable, agile, and easy to scale.
With composable architecture, e-commerce providers can implement an incremental roadmap to build web presences tailored to their customers rather than needing to overhaul their digital experiences entirely. I expect composable web architecture to keep transforming how retailers build their e-commerce offerings, creating improved customer experiences and driving business outcomes.
John Selvadurai, VP of R&D at Iterate.ai:
Headless commerce will pick up a lot of steam as businesses seek more speed and flexibility to outpace competitors with innovation and digital experiences that win over customers. Replacing monolithic application models, each function within a headless commerce system is an independent application that developers can iteratively improve and redeploy on its own, shifting to agile practices. Development teams gain the flexibility to upgrade and modify specific functions to meet the evolving needs of the business and its customers without the cumbersome process of changing their entire commerce system. Crucially, separating front-end and back-end functions means designers and back-end developers no longer need to share tools but can reap the advantages of their own preferred and fit-to-purpose toolsets.
Customer experience has become the essential retailer differentiator, with more impact on customer buying choices than even price and product. In 2024, retailers equipped with headless commerce will introduce, test and perfect customer-facing features at a cadence that blows antiqued competitors out of the water.
Tyler Wells, ISV & Strategic Accounts Partner Manager, Americas, MicroTouch:
Retailers will prioritize exploring how to use artificial intelligence (AI) to result in the greatest value for their organizations. Much emphasis will be on customer experience, using AI to recognize customers, hyper-personalize engagements, build loyalty, and increase revenues.
However, as the retail industry continues to face the challenges of rising costs and a labor shortage, businesses will also look at how AI can enhance operational efficiency and reduce costs, for example, by streamlining inventory management, forecasting more accurately, and reducing fraud and shrinkage.
Expect 2024 to be the year when retailers move from ideation to planning and piloting AI solutions – and the year in which the gap between market leaders and those who fall behind increases.
Derick Jaros, eCommerce Head of Industry at Yext:
In 2024, I believe conversational AI will further merge with site search to become a staple of the online retail experience. This combination has the potential to revolutionize ecommerce by creating a customer experience that streamlines information exchanges between retailers and customers.
Currently, customers may find chat annoying as it takes the form of a pop-up box on a retailer’s site and shares canned responses, often prompting them to talk to a live support team member anyway. However, I think the rise of conversational AI means retailers will increasingly prepare new user interfaces (UI) that will transcend the traditional, separated chat box and site search model to create experiences that improve communication between brands and shoppers.
This new UI will make it easy for customers to quickly find products and answer complex questions while mimicking the conversations that shoppers are used to having in-store. Not only will this benefit online shoppers, but in-store ones will be able to turn to the same AI tool for various instances, including when they have a question but can’t find an associate.
Ultimately, I believe combining generative AI-based chat with site search will help retailers reimagine personalized assistance experiences in the new year.
Omnichannel Management Systems
Tasha Reasor, SVP of Marketing at Loop:
Looking ahead to 2024, we see physical storefronts and malls making a comeback as driving in-store foot traffic becomes a key goal to acquire new customers, especially during the peak holiday shopping season. But that doesn’t mean e-commerce is going anywhere. Digital-first brands are still maintaining their online channels while expanding to pop-up shops and physical stores in strategic key cities. Consumers’ increased desire for seamless omnichannel experiences is driving the resurgence in flexible shopping options and locations.
Support for Social Commerce
Ana Milevskaja, CMO at e-commerce platform Productsup:
The creator economy will continue to skyrocket as more and more brands see success in their marketing and brand awareness efforts through this route. Take the Grimace Shake and TikTok “challenge” from earlier in 2023. The trend, while not inherently organized by McDonald’s, managed to boost the company’s second-quarter sales by over 10 percent in the U.S. and nearly 12 percent globally.
Because the most influential tool in the current retail landscape is social media, specifically TikTok and Instagram, brands will continue to seek ways to stay relevant and competitive in these channels or even, in the best case, go viral.