Retail Buying and Merchandising Trends in 2024
In 2024, the landscape of buying and merchandising is witnessing significant transformations driven by evolving consumer preferences, technological advancements, and socio-economic shifts.
Let’s dive into four key trends reshaping the retail industry this year.
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Embracing Sustainable Partnerships:
Sustainability has transcended from a buzzword to a fundamental expectation among consumers. With an increasing awareness of environmental and social issues, shoppers are scrutinising brands’ eco-credentials more than ever before. As sustainability climbs the agenda, retailers are forging partnerships with like-minded suppliers and manufacturers committed to reducing waste, prioritising sustainable materials, and ensuring transparent and ethical practices throughout the supply chain.
Buyers and merchandisers play a pivotal role in promoting sustainability by championing waste reduction, sustainable material sourcing, and fostering collaboration across design and supply chain teams. To gain further insights into the challenges and opportunities of sustainability in retail, we spoke with the Head of Buying at The Perfume Shop, who shared their perspective on ensuring suppliers align with AS Watson’s environmental and sustainability goals. You can read the full interview with Karla here.
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Leveraging AI Across Retail Merchandising:
Artificial Intelligence (AI) is revolutionising the landscape of retail merchandising, extending its transformative influence across various facets of operations. From planning to inventory management, price optimisation, and visual merchandising, AI is reshaping how retailers strategise, execute, and enhance customer experiences.
Merchandise Planning: AI algorithms empower retailers with advanced forecasting capabilities, allowing them to anticipate demand trends, analyse historical data, and make informed decisions regarding product assortments, pricing strategies, and promotional activities. By harnessing AI-driven insights, retailers can optimise their merchandise planning processes, aligning inventory levels with consumer demand and market trends.
Inventory Management: AI plays a crucial role in optimising inventory management processes, enabling retailers to maintain optimal stock levels while minimising the risk of stockouts or overstock situations. By leveraging AI algorithms to analyse real-time data, retailers can accurately forecast demand, identify inventory gaps, and streamline replenishment processes, ensuring efficient inventory turnover and maximising profitability.
Price Optimisation: AI-driven pricing solutions empower retailers to dynamically adjust prices based on market dynamics, competitor pricing, and customer behavior. By leveraging AI algorithms to analyse vast amounts of data, retailers can identify pricing opportunities, optimise price points, and implement targeted pricing strategies to maximise revenue and profit margins while remaining competitive in the market.
Visual Merchandising: AI-powered visual recognition technology enables retailers to optimise visual merchandising strategies by analysing customer behavior and preferences. By leveraging AI algorithms to analyse store layouts, product placements, and visual displays, retailers can enhance the overall shopping experience, drive engagement, and increase sales by delivering personalised and compelling visual experiences tailored to individual customer preferences.
Incorporating AI across merchandise planning, inventory management, price optimisation, and visual merchandising allows retailers to gain a competitive edge, drive efficiency, and deliver superior customer experiences in today’s dynamic retail landscape.
Charlotte Broadbent, UK General Manager at online wholesale marketplace Faire, underscores this point by stating, “We are harnessing the power of AI to get even smarter on making product recommendations to our independent retailers so that they can stock their shops with confidence when buying with us.”
This exemplifies how AI-powered systems not only enhance traditional merchandise planning processes but also facilitate personalised marketing efforts tailored to the needs and preferences of individual retailers.
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Meeting Consumer Demands for Newness and Storytelling:
In an era where consumers seek authenticity and connection, storytelling has emerged as a powerful tool for brands to engage with their audience.
Charlotte Broadbent, UK General Manager at online wholesale marketplace Faire, notes, “Customers will be more selective about what they buy. As prices remain high, customers will be even more selective about what they buy. Retailers will need to provide high quality and unique products that resonate with their values to move reluctant shoppers to reach for their wallets. ‘Not on Amazon’ was the most popular filter for independent retailers shopping on Faire in 2023, which reflects the mood of their customers.”
Retailers are responding to this demand by weaving compelling narratives into their brand identity, accelerating product cycles, and fostering emotional connections with customers. Through captivating visual merchandising, retailers like Lululemon and Patagonia have set exemplary standards in leveraging storytelling to drive brand loyalty and engagement.
Lululemon, renowned for its athleisure offerings, has mastered the art of storytelling to inspire its audience. The brand’s emphasis on community-building and personal growth resonates deeply with its customers. By creating experiential retail spaces and hosting fitness events, Lululemon goes beyond selling products to curate immersive experiences aligned with its customers’ lifestyles.
Similarly, Patagonia, an outdoor clothing company, has embedded storytelling into its brand ethos, particularly highlighting sustainability. Through initiatives like Worn Wear, which supports the resale of unwanted items, Patagonia not only promotes environmental consciousness but also fosters a sense of community among its customers. By sharing customer stories and images on social media, Patagonia engages with its audience authentically, standing out amidst the noise of traditional marketing approaches.
Karen Eber, a keynote and TED speaker, underscores the power of storytelling in marketing, stating, “When you watch a story, your entire brain lights up—each of your lobes will light up as your senses and emotions are engaged. Your brain mirrors the activity of the story as though you’re actually experiencing it in real life. In a way, storytelling gives you a sense of artificial reality.”
As consumers increasingly seek meaningful connections with brands, storytelling emerges as a potent strategy for retailers to create lasting impressions, foster brand loyalty, and drive business growth. By harnessing the emotional resonance of storytelling, retailers can elevate their brand narratives and cultivate deeper relationships with their audience in an ever-evolving retail landscape.
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Strengthening Customer Connections Through Experiential Retail:
Despite the rise of e-commerce, brick-and-mortar stores remain a cornerstone of retail success. Retailers are leveraging the unique advantages of physical stores to create immersive experiences, foster community engagement, and differentiate their brand. By hosting store events, offering personalised shopping experiences, and integrating digital innovations, retailers can deepen their connections with customers and drive foot traffic in an increasingly digital world.
For instance, a recent Aptos white paper highlights how store events can significantly impact retail success by driving traffic, increasing conversions, and fostering deeper customer connections. Examples from retailers such as John Lewis, SpaceNK, and Sweaty Betty demonstrate the power of experiential retail in creating memorable moments and building lasting relationships with customers.
Conclusion
As we navigate the winds of change in retail buying and merchandising, one thing remains clear: adaptability and innovation are paramount. By embracing sustainability, leveraging AI-driven insights, embracing storytelling, and enhancing experiential retail, retailers can stay ahead of the curve, meet evolving consumer demands, and thrive in an increasingly competitive marketplace.
As we reflect on the trends shaping the retail landscape in 2024, one thing is certain: the future of retail lies in the hands of those willing to embrace change, harness innovation, and prioritise the evolving needs of their customers.
