Top 5 Strategies for Successful Retail 2024: Part 3, Invest wisely

In today's ever-evolving retail landscape, balancing immediate hurdles with future growth is crucial for success. High inflation, the lingering effects of the pandemic, and geopolitical tensions present retailers with soaring costs and consumers with financial strains.

However, some retailers have flourished amidst these adversities thanks to their agility, deep consumer insights, and strategic investments. The question is, how have these factors contributed to their success, and what are their plans for 2024? The latest Retail Report for 2024, featuring insights from 44 leaders of UK and international firms, sees these retailers share their strategies for the coming year. Marked by an overarching sense of optimism, here we share part three of five main takeaways for retailers looking to fine-tune their strategies for 2024.

#3 Choose wisely where to invest

It's no big secret that retailers have to constantly navigate a maze of potential investment opportunities. Retail leaders are always looking to strike the right balance between capitalizing on readily available opportunities while remaining attuned to future trends. As previously touched upon in part two, focus on new store openings or renovations remains crucial for retailers in 2024, despite the significant impact of online channels on consumer shopping behaviors.

Keeping the best retail workers

Over half of the retailers surveyed identified some form of store investment as a top three priority for the coming year, with many retailers highlighting the importance of creating an engaging physical, surprising, and educational space for consumers to discover their products. A key part of developing a successful shopping experience also lies in having the right employees with the best training. Retail workers remain the economic backbone of the nation's retail industry - in 2022, there were 9.2 million retail workers or salespersons, according to the Census Bureau’s American Community Survey (ACS). However, since 2010, retail workers' share of the total workforce has declined from 6.9 percent in 2010 to 5.6 percent in 2022, underscoring the number of workers leaving the industry following the pandemic. What's more, the Bureau of Labor Statistics projects employment within retail sales to decline by 2 percent between 2022 and 2032, highlighting the need to keep skilled retail workers motivated.

According to the report, retail leaders' questions are prioritizing worker development and training to help retain their best workers. Some retailers are training their in-store employees to handle online customer services, mitigating roles traditionally carried out in head offices, encouraging them to do more for the business, while others are offering product knowledge courses to help boost employees' skills and morale.

Getting the message out

A significant number of retailers also stated that marketing and investing in brand messaging were a key priority for 2024. Most retailers are investing heavily in SEO and email marketing (93 percent of those surveyed) followed by Facebook (90 percent), Instagram (85 percent) and PPC and affiliate marketing (both 83 percent). It's evident that digital marketing continues to be the main investment for most retailers, as it is easier for many to reach their target market. Fashion retailers continued to invest in tailored ads for each of their channels to best reach their target audiences, while other retailers were investing in full-funnel marketing, from television advertising to social media influencers and other channels. Many retailers cited leading social media platforms like Facebook, Instagram, and TikTok as potential hubs to drive a lot of conversions.

Although it is clear that digital remains a crucial marketing channel, retailers are also aware of this ever-shifting landscape. By the end of 2024, the depreciation of online cookies on Google Chrome will come into effect as Google introduces heightened privacy and user experiences, which means retailers will have to tweak their digital marketing once more. Some retailers are looking to paid search ads to help overcome these changes, although organic traffic will still be important. Overall, retailers are investing in creating a seamless and cohesive experience for consumers across all channels to strengthen their brand and meet consumer expectations on whatever platform they prefer to use.

The rise of AI

Following the rise of generative artificial intelligence (AI), retailers across the board have been using tools like ChatGPT to create web content and emails and aid with research and creative functions. Although AI has been used for years by IT companies to help automate tasks and analyze data, the launch of ChatGPT has seen the tech evolve into a more tangible solution for retailers. In 2024 and beyond, leading retailers are set to invest in AI to help with everything from product and data forecasting to inventory management, logistics, and customer service. Some retailers are looking at how AI can help their creative teams with designing, patterning, and samples and as a means to help reduce waste. However, other retailers remain cautious when it comes to implementing the technology and show restraint when it comes to becoming overly reliant on AI algorithms.

Overall, most of the retailers surveyed were confident about making large investments in new technology and infrastructures to support their businesses in 2024. Investments in innovations and emerging solutions, as well as employees, were the most important among retailers for 2024, as they aim to keep up with consumers' increasing demands.

Stay tuned for part 4 next week.