3 Trends Shaping a Shifting Retail Landscape

Despite pandemic savings shrinking, student loan payments kicking back in, inflation remaining a pesky nuisance, and the labor market losing steam, these obstacles haven't deterred consumer spending.

In 2023, The Wall Street Journal reported that consumer spending increased 5.8 percent year-over-year, outpacing inflation by 1.8 percent.

However, consumers aren’t easily opening their wallets for everyday retail items. They're spending on experiences, including vacations, concerts, and eating out. As The Journal notes, “They're spending on once-in-a-lifetime experiences because they worry they may not be able to do them later.”

While shoppers are willing to shell out for experiences, recent trends indicate they’re opting for affordability in their purchases of items from gifts to household goods. This shift is indicative of broad industry trends impacting the retail landscape. It creates a difficult dynamic for brands and retailers, which are tasked with growing revenue, cultivating customer loyalty, and accommodating shifting consumer demands, all while containing costs or compromising existing efficacy.

Here are three trends that will continue to define the the year that retail is having that can help companies make better decisions through the end of 2024:

No. 1: E-Commerce is in Preservation Mode

The e-commerce space is in preservation mode, optimizing for operational efficiency, retention, and longevity to remain competitive. Online retailers also reimagining their offerings, becoming more creative in leveraging different product bundles, upsell opportunities, and remarketing journeys.

This creates an opportunity for companies that can cater to customers' needs and wants.

For instance, online shoppers are obsessed with order tracking, and shipping anxiety is one of the most significant deterrents to buying items online.

According to one report, 91 percent of consumers actively track their packages, including one-fifth who follow their packages “multiple times each day.”

E-commerce may be in preservation mode, but that doesn’t mean that companies can't enhance their offerings to capture mind and market share, differentiating themselves even as the competition tries to determine its next direction.

No. 2: Staff Levels Are Fluctuating

The overall business environment is slowing, including layoffs at many tech companies, and logistics and fulfillment companies are not immune from this trend.

Flexport and C.H. Robinson have laid off 20 percent of their employees, and Maersk reduced its headcount by 3,500 jobs, signaling a broad slowdown across the retail landscape.

As one example of an indicator that calls for attention, in late 2023, logistics and fulfillment companies trimmed down staff or closed service lines in October, which was unusual at best, and merchants reported slower October sales than previous years, even when compared to traditionally slow summer months.

To continue to make an impact in 2024, it’s increasingly clear that brands and retailers must rely on automation to continue serving customers when staffing levels fluctuate. For example, post-purchase automation, including communications expressing gratitude, seeking feedback, offering support or deals, and updating the order status, can help companies continue to serve their customers with excellence.

No. 3: Buying Patterns Are Disrupted

Even though the COVID-19 pandemic is decisively in the rearview mirror, its impact on seasonal shopping trends continues to reverberate, rendering predictions based on historical data unreliable and requiring companies to adjust and recalibrate in the coming months.

High mortgage rates have led many consumers to hold off on large purchases. However, normalizing this vector alone could increase the number of house sales, leading to homeowners investing in home accessories, kitchen utilities, bathroom renovations, and more.

Economists have yet to predict a timeline for this “catch-up” period, but it may fall in later 2024 or perhaps the summer season, periods that are less known for shopping spikes.

Controlling 'Controllables' While We Wait for More Information

Macroeconomic factors and consumer spending will undoubtedly continue to evolve in ways that are both predictable and unexpected.

That’s why retailers can’t afford to remain idle, hoping that their committed customers will keep them afloat until the environment improves. Instead, every company should be proactive, understanding the latest trends and taking strategic steps to navigate them with excellence.

Mario Peshev is the CEO of DevriX, a global WordPress agency providing scalable, long-term technical partnerships along with marketing and business consulting. Peshev is the author of the new book, "MBA Disrupted: Your Step-By-Step Guide to Bootstrapping $1M+ Digital Businesses."