by Will Lovatt, General Manager and Vice President, Deposco Europe
As we look ahead to a 2024 of continued rapid evolution of the ecommerce and retail landscape, it’s key to reflect on the lessons learned from 2023. From delivering a dynamic, cost-effective service to meeting the changing consumers’ needs, here are the industry insights, themes, observations and predictions you need to anticipate the challenges ahead.
The rise of the ‘zero consumer’
In today’s world where consumers navigate a cost-of-living crisis combined with aspirations for a high-quality lifestyle with the latest luxury items, a new norm makes up modern-day consumers’ shopping habits and spending behaviours. Here we introduce you to the ‘zero consumer’ who is characterised to have zero interest in mid-range products or services but rather scrimps and saves where possible to splurge elsewhere. They have zero loyalty to brands and tend to buy from those offering the best value, quality, variety and purpose.
To compete for business on either end of the scale, cost containment will be a top priority, prompting retailers, ecommerce businesses and suppliers to devise compelling offers to entice consumers. Emphasising core competencies and forming strategic partnerships, rather than attempting to control every aspect of the supply chain, will be crucial for businesses aiming to thrive in 2024.
The need for highly collaborative and personalised consumer engagement will be paramount in the coming year to optimise efficiency and maintain profitability. Businesses must be attuned to consumer preferences, offering tailored experiences and flexible purchasing options, such as varied delivery and click-and-collect choices. To enable this, businesses will rely upon technology such as omnichannel fulfilment platforms to make their carefully ranged product available at the time and place desired by consumers. The technology will enable the business to fulfil the order and ship to them at an affordable price.
Ecommerce growth remains explosive, businesses must be agile to survive
The growth trajectory of ecommerce will surpass its previous peak during the COVID-19 pandemic. Forecasts show that ecommerce sales will make up close to a quarter of total global retail sales by 2027. As a result, retail and ecommerce sectors will undergo transformative changes, necessitating a strong focus on agility to thrive. Those who fail to plan or decide on a strategically inflexible approach may struggle.
By having the latest insights, there is the possibility for companies to be so agile that they can sell without even owning their inventory. It can also reduce significant costs in the supply chain by eliminating margin-sapping touches and inefficient buffering at each node. The blurring lines between online and offline retail will require a re-evaluation of traditional models, emphasising a seamless customer experience across all touchpoints.
Businesses will need to be flexible, addressing ongoing supply chain challenges and rapidly changing consumer preferences with real-time reporting and exception management. Workforce issues will remain a priority, highlighting the need for technology deployment, efficiency improvements, and a steady influx of skilled talent. In the US, the focus will be on fulfilling the promise of omnichannel retailing, capturing sales opportunistically, and minimising basket abandonment across domains.
There will be a growing focus on learning from social media and innovating authentically
According to MasterCard, the COVID-19 pandemic saw a 43% increase in social media shopping. Its impact on consumer purchasing decisions is poised to amplify in the forthcoming years, with the principles of attention and influence economics playing an increasingly critical role. As we progress into 2024, the challenge of sustaining brand loyalty will increasingly include ‘social shopping’s’ combination of online culture and ecommerce. This will necessitate the adoption of innovative marketing and delivery strategies aimed at capturing and retaining consumer attention in a saturated digital landscape.
Businesses will need to adapt and experiment with fresh approaches to connect with their audience. Social media platforms such as TikTok and Instagram hold the power as the modern-era shopping channel. For social marketing to be fruitful, however, innovations must be authentically tailored to the needs and preferences of customers, rather than being imitations of competitors’ strategies. A case in point is the experience of a retailer in the US rapidly adopting a BOPIS (Buy Online, Pick-up In Store) model featuring automated lockers, or click-and-collect as referred to in the UK, only to quickly move back to a kerbside pickup service when that was not successful. It’s a cautionary example of inauthentic and misaligned innovation leading to consumer disconnect.
Businesses must understand where their customers are, how to reach them, and have underlying fulfilment technologies in place to be able to cope with growing sales volumes as consumers purchase at any time from any device, any platform, or any part of the globe.
Technology will play a key role in supporting a more positive future through 2024 and beyond
To successfully navigate the multifaceted challenges facing the retail and ecommerce sectors, it is imperative for businesses in 2024 to make strategic investments in flexible, cloud-based fulfilment systems. These systems should be designed to facilitate dynamic decision-making and significantly enhance the level of engagement with consumers. Adopting this proactive approach will empower businesses to adeptly manoeuvre through the intricacies of contemporary supply chains, ultimately leading to a position of strength and confidence.
As retail and ecommerce are undergoing a significant transformation, shifting from pre-pandemic models to consumer-centric strategies, this will require businesses to reimagine traditional practices and adopt innovative fulfilment solutions. Those embracing this transformative approach, leveraging technology, and prioritising consumer needs will thrive in the evolving retail and ecommerce landscape of 2024 and beyond.