What Is the Reality of Retail Tech Trends in 2024?
As the activity at this year’s NRF (National Retail Federation) Big Show made clear, generative AI and retail media networks are dominating the retail tech conversation in 2024.
In one sense, the hype is justified as retailers are clearly interested in the opportunities offered by these technologies. At the same time, there often still isn’t a clear explanation about how gen AI can be used to solve retail’s problems.
It’s clear that tech companies need to spend more time with retailers to work out the most useful applications for the technology. I think it’s from here that we’ll start to see gen AI step outside of the hype into practical use cases.
Likewise, although there is lots of excitement about retail media networks (RMN), not many tech companies can clearly explain what part of the RMN puzzle they are trying to solve. There is still a big gap around the collection of data in stores, especially when it comes to consumer privacy.
Away from the hype, the most successful retail tech companies are those that save retailers money or improve store and operational efficiency, and are grounded in real world examples. These are the ones that are still growing.
How Are These Trends Playing out in Physical Stores?
Again, it feels as though a lot of the tech dominating conversations, such as gen AI and retail media networks, is four or five steps ahead of where retail stores are.
For example, while there is a lot of talk about using AI to improve the customer experience, a lot of big retailers still haven’t implemented more basic technology than the industry has been talking about for the last 10-15 years, such as the ability to check real-time store stock online. It feels like there is a mismatch between the future and the present.
If we take grocery stores, who are prime targets for both of these technologies, the most successful ones I visited in New York aren’t doing anything novel or particularly new.
Wegmans, Trader Joe’s, Whole Foods, Eataly and Pop Up Grocer are all doing really well without a lot of buzzy tech. They’re simply focused on great quality products, a wider range of local and specialty products, and service.
What Other Retail Trends Have You Spotted Happening on the Ground?
Discovery continues to evolve in stores.
Pop Up Grocer is a fantastic example of how to do discovery-led retail compared to the big retailers who still struggle to do a good job of highlighting new products. For emerging brands, a space like Pop Up Grocer offers a lot more benefit than being lost on the shelves in a normal grocery store.
That said, we’ve also seen spaces like Showfields and Neighborhood Goods sadly shuttering their doors, which suggests that the discovery model still needs work. I suspect we will see the integration of more discovery concepts into existing spaces rather than as stand-alone concepts.
We’re also seeing an evolution in how D2C brands are approaching their first retail spaces. In New York, Sporty & Rich, Gohar World and Cider all opened fantastic pop-up spaces because they understood the purpose of those stores better than any other brand. For them, those spaces were all about brand building, marketing and advertising, not selling, and that clarity allowed them to be genuinely creative.
I think whether you’re an established retailer, an emerging brand or a platform for discovery, clarity is going to be the name of the game for physical retail in 2024. Brands will need to be more intentional about the purpose of their stores, from a business and customer point of view, to get the best from their investment and make sure their messaging resonates.
