Strategies for navigating retail trends in 2024

2023 was the year of the resilient consumer. In 2024, consumers around the globe are flexing their resiliency as they define exactly what they want from their favorite brands. See what strategies retailers should take as retail industry trends reflect this shift towards a more customer-centric and digitally driven landscape.

Global retail economy

With many economies seeing prices for products and services starting to shift, consumers may prioritize their spending away from experiences and more towards things, forcing retailers to compete for consumer love as they rebalance priorities.

What are some economic factors impacting the retail industry in 2024?

Inflation will ease in most economies around the world

As inflation cools more than wage inflation, consumer purchasing power should increase

Consumer spending on experiences and things may track more similarly than in the past few years, particularly in real terms

Read the Retail trends to watch in 2024 report to explore how economic factors vary from region to region.

Understanding and connecting with consumers

Consumers will be reprioritizing their spending and engaging with brands through new channels. In response, many retailers will rely on analytics and testing to determine the most effective pricing strategies, promotions and channel investments.

Strategy

How can retailers navigate this trend?

Test new pricing and promotional strategies in a subset of locations or with select customers to determine how to optimize the strategy

Use consumer spending data to inform where to allocate marketing dollars or invest in new stores

Expand, grow and differentiate consumer communications through retail media networks, marketplaces and social commerce channels

Customer story: MediaMarktSaturn, one of Europe’s largest electronics retailers, wanted to understand the impact of a price matching program. Test & Learn® evaluated the program's impact and found that the program drove a 2% increase in total sales driven by an 11% increase in loyalty sales, as well as a 43% increase in new loyalty program registrations. As a result, MediaMarktSaturn was able to confidently roll out the program.

Turning consumers into loyal customers

It’s no surprise that consumers today want brands to care about them. As the bar continues to rise in 2024, consumers have grown to feel entitled to certain perks, so retailers will look to embed their offerings into customers’ daily lives and provide an authentic experience.

Strategy

How can retailers navigate this trend?

Provide utility beyond points by making loyalty programs less transactional and more experiential

Explore paid loyalty and subscriptions to engage top customers and create a new revenue stream

Stand out among the competition by deploying gamification tactics to engage consumers

Customer story: An Asian Pacific retailer had a loyalty app but saw little to no engagement with members. Partnering with Mastercard, the retailer created a gamified mission board where each customer had their own set of personalized challenges. As a result, the brand saw a 60% increase in app customer engagement and a 6x increase in purchase frequency for game participants versus non-participants in the first 12 months. Explore t he impact of gamification on loyalty strategies to learn more.

The shopping experience

The lines between online and in-store continue to blur as the consumer will navigate between the two becoming one cohesive and seamless experience that is consistent regardless of the format. The empowered consumer is now looking for the best product at the best prices and are willing to look and wait for the right time and place.

Strategy

How can retailers navigate this trend?

Supplement the online shopping experience with services provided by brick-and-mortar stores and vice versa

Provide personalization across all channels

Adapt store strategies at a moment’s notice as flexibility can create a distinctive customer experience

Customer story: Today’s customers expect highly relevant experiences across any channel. To deliver a more personalized shopping experience, The Warehouse Group, New Zealand’s largest general merchandise retailer, uses Dynamic Yield. Watch this video to hear how The Warehouse Group personalizes experiences with more relevant messaging.

Evolving ways to pay

As retailing environments evolve and choices in ways to pay expand, retailers and consumers are looking for more seamless, secure and innovative checkout experiences.

Strategy

How can retailers navigate this trend?

Turn to biometrics as a secure, engaging and convenient way for consumers to pay for purchases

Integrate loyalty programs into the checkout system for faster, more tailored offers at purchase

Reduce online cart abandonment by investing in online checkout solutions, such as Click to Pay

Customer story: Éxito, an innovative retail chain in Latin America, was exploring ways to improve the customer experience by introducing a new digital payment solution. Mastercard partnered with Éxito to examine the store ecosystem and segment stores by location, type and other elements. The segmentation identified 34 stores, which were used to pilot the payment solution. By using Test & Learn® insights from the pilot to strategically introduce the new payment solution, Éxito could drive a 19% return on investment.

To learn how Mastercard is helping brands and retailers with data and insights, personalization and loyalty solutions, and experimentation and consulting, contact your Mastercard representative here.

Want to read more? Our annual trends report details the 15 customer-centric and digitally driven retail industry trends paving the way for the year of the “empowered consumer” here.