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Beating back gloomy Black Friday forecasts predicting lacklustre holiday sales, Black Friday 2023 broke records handily with online sales reaching $9.8 billion in the US, up 7.5% from 2022 (not accounting for inflation).
If there’s one takeaway from Black Friday, it’s that consumer behaviour remains a mystery and hard to predict. While Cyber Weekend’s sales figures might just reflect a snapshot in time, could they also foretell what’s ahead for retailers in 2024? Based on findings from our recent survey of 92 of the top US retailers with revenues of $250 million+ (conducted in partnership with RSR Research), we’ve identified three trends that will spill over to 2024, evolving and maturing throughout the year. We predict the three standout retail trends in 2024 will be: GenAI ecommerce use cases, hyper-personalisation, and operational flexibility.
Our survey also determined that making strategic technology investments can make an impact in delivering a customer-centric experience. Between 2022 and 2023, top-performing retailers increased technology investments as follows:
- 50% invested more in AI search, recommendation, and personalisation software
- 52% invested more in order, payment processing, and inventory management
- 55% invested more in their ecommerce platform
- 59% invested more in a CRM
With brands increasing their technology investments, what other trends might make an impact on retailer’s bottom lines and ability to connect and engage with customers in 2024?
Trend #1: Employing GenAI to meet consumer expectations
GenAI took the world by storm in 2023, but next year will be all about seeing if it lives up to the hype. One key trend for GenAi in 2024 is applying it to meet shopper’s expectations. For example, in traditional in-store interactions, customers ask product-related questions. Replicating this in an online environment has been challenging. GenAI-powered generative answering can solve this problem by providing shoppers with answers to their questions in a digital environment, leading to a change in how people shop and find products.
Making product discovery seamless and natural is critical to delivering a satisfying shopping experience. It enables customers to find relevant products they might not know about, alternatives when the item they want isn’t available, and products they might be interested in based on browsing history, past shopping behaviour, and other signals.
Brands are definitely paying attention to the GenAi hype: 93% of the top-performing retailers we surveyed already have (or will have) implemented GenAI technology in their contact centre for the 2023 holiday season and 34% are experimenting with GenAI capabilities in preparation for possible adoption in 2024.
This is a smart move, especially for B2B retailers with lengthy buying guides, how-tos, technical manuals, and other rich content which can be used to fuel generative answering to educate shoppers and guide them to the best products for their needs, from the best filter for their jacuzzi to mountain climbing gear for beginners.
Trend #2: Cookieless personalisation becomes the norm
Everyone wants to be “seen” which is also a big difference between the physical and digital shopping experiences. This makes personalising the online shopping experience more important than ever. Personalisation isn’t a new concept, Amazon adopted a rudimentary version more than two decades ago; however, it’s come a long way since then.
What is new for retailers is the ability to deliver 1:1 personalisation without relying on third-party cookies. The trend towards using first- and zero-party data for personalisation initiatives started in 2023 and will continue to trend in 2024.
This is an important moment in the evolution of personalisation. And while the shift does require new strategies and technologies for successful execution, it also presents opportunities for more accurate, privacy-compliant, and effective personalisation. In 2024, we’ll see more brands employ session-based recommendations and deep machine learning models to provide personalised shopping experiences.
Trend #3: A more fluid omnichannel experience
By some estimates, half of consumers say they use a combination of online and offline channels to meet their shopping needs. This could be a QR code seen on TV or in a store that when clicked provides a coupon, offer or more information. This sounds simplistic, but in reality, serving these various touch points requires a flexible tech stack that can support the evolving ecommerce landscape of the future, which includes headless, composable commerce, microservices-based, API-first, and cloud-native, to name just a few up and coming trends.
Although there are many ways to implement a seamless omnichannel shopping journey, it does require leveraging a technology architecture that allows for greater business agility, a better digital experience for your customers, and increased cross-channel consistency. This is where composable commerce shines. It allows brands to break the siloes between the online and offline to deliver shopping journeys consisting of connected experiences — discovery, education, purchase, post-sale support, etc. — that a shopper takes as they navigate a company’s online and offline ecosystem. To deliver great experiences across multiple touchpoints in a way that makes sense, you need to connect channels and data using advanced technologies such as AI, machine learning and a unified index to get it right.
Final thoughts
We’ll likely see GenAI, AI and cookieless personalisation, along with other technologies, become more pervasive in retailers’ ecommerce tech stacks in 2024. This is not only good news for brands as they work to get the omnichannel shopping experience right, but also for shoppers who want hyper-personalised experiences and better product discovery – regardless of whether they shop online or in person.
Lisa Grayston is General Manager of Commerce at Coveo. As GM, she is responsible for the go-to-market strategy for Commerce, strategic customer acquisition, and install base expansion and growth. She works cross-functionally to align key customer business outcomes to Coveo’s products and processes. Lisa was previously Director of Product Strategy in R&D and joined Coveo after the Qubit acquisition in 2021. She has extensive experience in commerce, high tech, med-tech, fin-tech, procurement and supply chain, having worked for companies ranging from startups to Fortune 25.
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