2024 Retail Predictions

Given the massive year 2023 was for the proliferation of various industry trends such as retail media, generative AI, connected TV (CTV), shoppable content and digitally enabled stores, 2024 is well-positioned to go even further and pave the way for more disruption. But, is it possible some trends have neared their peak? Some experts and research suggest so. Read on to see what industry leaders are flagging as the next big things in retail.

Artificial Intelligence

Generative AI is expected to disrupt the industry further in 2024, perhaps even more rapidly than it did after ChatGPT hit the scene in late 2022. 

Location-based advertising agency InMarket fielded a 2024 predictions survey to marketing professionals in October, which pointed to AI becoming the backbone of marketing operations and helping create real-time interactions with consumers. The forecasted generative AI market size of $1.3 trillion by 2032 underscores this potential. 

Advancements in AI and data analytics are also expected to make personalized shopping experiences more sophisticated.

“Tactically, I expect AI and predictive analytics to continue to drive optimizations like dynamic pricing, fraud prevention, and supply chain management,” Meghana Dhar, e-commerce expert and former global head of brand partnerships at Snapchat, recently said during Agora’s RTE Live Shopping event. “But more transformatively, I foresee new applications; for example, the rise of the personal AI shopping agents trained on individual consumer tastes and favorite influencers to act as virtual stylists and shoppers. These agents could suggest products matched to our needs and style, identify wardrobe gaps, notify us of relevant sales and deals, and even place orders on our behalf. This shift from incremental efficiencies to disruptive, personalized experiences represents AI's potential to fundamentally alter shopping behavior and redefine retail. Instead of simple optimizations, these AI agents/personalized GPTs may become trusted advisors and purchasing partners. 2024 and beyond will likely see these applications of AI emerge.”

Retail Media

While U.S. retail media spending is on the rise — with projections to increase from $31 billion in 2021 to $61 billion by 2024, according to eMarketer — could retailer media networks be close to “hitting the ceiling?” Patrick Gut, vice president of media technology company Adlook, thinks so, and he believes brands may need to pull back on targeting. 

In an email to P2PI, Gut said: “Spending on retail media continues to surge. But at a certain point in 2024, these platforms will likely run out of room, so to speak, given that inventory on their owned-and-operated sites and apps is finite. Expect many of these companies to shift more budgets to off-platform targeting (i.e., letting brands use their data to target consumers on the open web). This will have an unexpected side effect – driving up the demand and prices for ID-based ad targeting overall. As a result, it’s likely that some categories that don’t rely on e-commerce (such as CPGs) will be priced out and forced to shift spend away from ID solutions. The question is, where do these dollars go? Walled gardens? ‘ID-less’ solutions such as contextual?”

Additionally, Skye Frontier, senior vice president of growth at retail media measurement company Incremental, believes that the integration of retail media and traditional media planning will continue to emerge within the retail space in 2024. 

“Historically, the ownership of retail media has remained an open question. Sometimes it reports in revenue, and other times it reports in marketing,” Frontier said in an email to P2PI. “For the most part, retail media has remained siloed from the rest of media buying despite retail media moving beyond just shoppable media to brand building as it moves to power CTV.  There is also limited overlap in the technology used to plan, optimize and measure retail media vs. digital media, let alone traditional media.”

Frontier says 2024 will likely be the year that this all changes, as the people, processes and technology surrounding retail media will integrate with traditional media planning. 

“Omnicom’s purchase of Flywheel is a major indication that this will be an area of focus across the industry. This purchase highlights the need to bring people, expertly designed processes and technology for managing retail media into traditional media planning. Industry leaders should monitor the acquisition of endemic agencies to bring their people and processes into holding companies and watch the technology side as well – platforms and tools that support the buying, planning and measurement of retail media will be folded into or at least integrated with traditional media platforms.”

Shoppable Content & Live Commerce

As the digital media landscape continues to evolve, the fusion of content and commerce has emerged as a crucial paradigm. Walmart’s recent move to expand its shoppable TV footprint via a partnership with NBCUniversal's Peacock platform is just one indication that the era of shoppable ads has only just begun. In 2024, the convergence of content and commerce is set to redefine consumer engagement and drive advancements in interactive advertising.

Also notable, live commerce is seeing rapid adoption and stands poised for significant growth in broader categories in the coming years.

Joe Kwong, head of business development, e-commerce at Agora, said during Agora’s RTE Live Shopping event that, “In 2024, we will see continued investments from large social platforms, adding new multi-functions to become ‘super apps’ that include live shopping functionality. For example, in 2023, we saw X announce the live shopping partnership with Taylor Swift. Pinterest also hired a new CEO, Bill Ready, former president of commerce at Google. Pinterest’s recent changes have increased its [monthly active users (MAU)] and revenue by 11% year-over-year. We will likely see more new start-ups with innovative ideas to disrupt retail media and bring live commerce to the front and center of super apps for Western markets.”

In addition, other notable trends and shifts to keep an eye on in 2024 include:

• CTV will overtake traditional TV: The expected 22.4% growth in CTV ad spending to $30.10 billion signals a shift to where advertising dollars are landing, per eMarketer. Further, InMarket’s 2024 predictions research relayed that nearly 10% of marketers surveyed mentioned CTV in their 2024 predictions.
• Social media will continue to grow: By 2027, e-commerce will account for 23% of global retail sales, according to Statista. Top retailers will continue collaborating with leading platforms and creators to craft seamless, personalized experiences. 
• First-party data: 75% of marketers heavily relied on third-party cookies in 2023. Google's upcoming deprecation of third-party cookies means that the ability to access first-party data will become a large priority. 
• Consumers to increase online shopping: While consumers will continue to shift fluidly between the in-store and online shopping, 27% of shoppers say they’ll be increasing the amount of online grocery shopping they do in 2024, while 9% will do less online, according to 84.51’s “2023 Year in Review” special report.