Table of contents
The Flywheel Retail Insights team recently published Future Retail Disruption 2024 - a report highlighting the approaching changes to the world we live in and the strategies that retailers and brands should embrace to win in it.
In this blog, we’re taking a sneak peek at 3 of the 9 critical shifts for shoppers, retailers and brands identified in the report which also lays out assumptions to support a future scenario and additionally provides recommendations on preparing.
More in-depth analysis for Retail Insights subscribers
If you're a Retail Insights subscriber, you can access the full 2024 Future Disruption report here or—if you're more of a video person—you can watch the full recording of our 9th April 2024 virtual event, where David Gordon, Rachel Citren and Rachel Gwyther from the Retail Insights team take an in-depth look at the report and pick out some key highlights.
Shoppers: An AI-powered path to purchase
Our assumptions:
- Generative AI will transform the online search experience, as retailers leverage this emerging technology for more relevant, personalized and refined search experiences.
- Exposure to AI-powered search tools, including personal assistants and chatbots, will evolve consumer search behaviors from product-based search terms to more complex natural language queries.
- Frictionless experiences on both the digital shelf and in stores will be increasingly commonplace as AI solutions evolve.
What it takes to win:
- Brands will need to refine their digital shelf strategy as generative AI gains greater scale and sophistication, for example sponsoring occasions or product recommendations as opposed to keywords.
- Effective product set-up will become important to ensure relevance in AI-powered search results.
- AI-powered technology can drive productivity gains across the value chain, supporting personalized products tailored to preferences, and generative AI marketing campaigns.
Retailers: Retail media scales the revenue diversification model
Our assumptions:
- As costs rise, retailers will lean further on diversified revenue streams, boosting the economic model with higher-margin incomes from a broad ecosystem including retail media, marketplaces and retail-related subscription services.
- Retail media offers a scalable opportunity, as retailers invest in upper-funnel media and data clean rooms enable data to be shared securely - facilitating advanced targeting online and in-store, as well as through emerging channels like connected TV.
- Retailers will leverage their unique first-party data for personalization and offer sophisticated tools to brands for activations and measuring advertising effectiveness.
What it takes to win:
- Retail ecosystems, with an increasing array of product and service propositions, create multiple touchpoint opportunities – media, entertainment, and marketplaces - for brands to connect with consumers.
- Brands will seek their own ecosystem models, connecting with and serving consumers across many touchpoints.
- With a focus on data-driven technologies, new segmentation and targeting opportunities are emerging for brands through data clean rooms, full-funnel media activations and connected TV services.
Brands: The requirement for digital shelf excellence across channels
Our assumptions:
- Third-party (3P) ecommerce continues to outstrip first-party ecommerce, with omnichannel retailers rapidly building out their 3P platforms and assortments.
- Social commerce, eB2B and on-demand commerce are also expected to scale quickly, becoming significant digital channels and important components of any brand’s ecommerce and omnichannel portfolio.
- Brands must refine their digital shelf strategies to meet consumers online in each of these environments, balancing profitability across channels while driving conversion.
What it takes to win:
- While establishing a presence across all ecommerce subchannels can be relevant, investment decisions must focus on global marketplaces and the growing affluence found within developing markets as spend shifts online.
- As well as social commerce, recognize eB2B as a future growth channel, building investment cases internally to capitalize on the opportunity while identifying relevant platforms and operators.
- New online-first brands are growing their presence to compete with established brands in emerging markets, seeking to appeal to a new generation of young shoppers.
