By The Forbes
The retail landscape has shifted and changed so much over the past year with the emergence of AI, the growth of the creator economy, and the increasing importance of employee well-being. Retailers are scrambling to become more attractive to a diverse younger consumer and retain talented employees during their busiest times, and that is only expected to grow in 2024.
Here are five trends that will shape retail this year:
- New General Market Redefined
Historically, there have been two market segments: the general market and the multicultural market. The general market represents non-Hispanic whites, and the multicultural market includes Black, Hispanic, Asian, and other racial groups. However, by 2050, a pivotal shift will occur: non-Hispanic whites will be the minority in the U.S., marking the multicultural market as the new general market. Gen Z consumers will mark the final era where multicultural individuals are in the minority.
By 2060, the distribution of non-Hispanic whites as a percentage of the total population is expected to fall from 60.1% to 44.3% of Americans. “The significance is tapping into intelligence on today’s multicultural consumers, ages 18+. This insight is crucial for unraveling the intricacies of tomorrow’s influential consumer powerhouse—Gen Alpha,” explains Imani Laners, vice president of multicultural partnerships at Zeta Global, “As the inaugural majority-minority generation currently under age 13, they will emerge as the focal point in the next 5-10 years, reshaping the consumer landscape,” said Laners.
However, if looking beyond simple demographics, retailers and brands are recognizing that while people may be categorized in certain groups, they may affiliate themselves with another group. For example, non-Hispanic white people who grew up in Japan may affiliate more with Japanese culture. If marketers can capture these consumer preferences, the whole idea of market segmentation will change.
“Retailers and brands recognize that multicultural audiences aren’t monolithic, meaning that there are diverse cultural or ethnic groups, and within those groups exists a variety of perspectives, beliefs, preferences, behaviors, and characteristics. Understanding the intricate ethnic composition of these audiences becomes a linchpin in establishing robust audience segmentation,” said Laners.
A staggering 70% of Gen Z and Millennials express a penchant for brands committed to diversity and inclusion. This attitude underscores the significance of authentic engagement in multicultural advertising, culminating in a remarkable 60% higher retention rate among these discerning consumers. “Retail marketers should adopt a proactive approach, recognizing that leveraging multicultural intelligence isn’t just pivotal for thriving today; it’s the key to acquiring, growing, and nurturing lasting connections with the evolving New General Market consumer of tomorrow,” said Laners.
- Creator Commerce
The high growth of social media and digital commerce has propelled consumers to look at community experts to help find relevant products and services. Content creators are the cultural leaders of the 21st Century. “Ask a friend what compelled them to purchase their last product online, and most likely they will say they discovered it from social media, specifically a content creator,” exclaimed Julian Greene, Head of Creator Partnerships at Flagship.
The organic evolution of online media sharing has democratized how consumers learn about products, goods, and services. Content creation is a natural evolution of online media. Retailers should embrace these creators and treat them as part of the community for the brand. Content creators provide a new way to introduce products with authentic recommendations, and they help connect people with products they’ll love based on their shared tastes or expertise.
Wildly easy access to the internet and social media has provided the ability for anyone to create and share content around the world. “Shopping from creators makes things easier for consumers. In a world of infinite products, endless options, and endless scrolling, consumers have fallen in love with the idea of shopping from influencers because, plain and simple, content creators make shopping easier,” said Greene. Explaining why creators are the future of commerce, Greene noted that consumers are looking to their favorite influencers and friends, as they have always done since the dawn of time. “People are tired of the conformist approach to shopping where everyone is fed the algorithms. They want products that fit them and that tell their story. Creators are a vector to connect them with those products,” said Youssef Ahres, CEO of Flagship. The creator economy market is projected to double in size over the next five years to $480 billion by 2027, according to Goldman Sachs.
- AI’s Influence on Retail
AI has been and will continue to be the most significant disruptor in retail since the advent of online shopping. Retailers will use generative AI to help improve the pre-purchase shopping experience, enabling more sophisticated chatbots in online environments to aid with service requests and create better efficiencies throughout the organization regarding content creation. AI technologies and solutions will drive innovation faster, improve the shopper journey, deepen loyalty, and elevate the overall brand. Retailers have already jumped into using AI to foster more profound levels of personalization in marketing efforts. Micro-segmentation and building robust communities are two ways marketers build brand assets to grow customer loyalty. Brands are figuring out how to deliver hyper-personalization in a relevant and non-creepy way.
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