2024: The Year of Accelerated Growth in Omnichannel Retail

Retail experts have long been observing the merging of traditional brick-and-mortar stores with digital commerce. Since the launch of Amazon’s online book sales in 1995, there has been a steady movement towards a more cohesive, omnichannel retail model.

The pandemic significantly accelerated this evolution, as consumers increasingly favoured services like buy-online, pick-up in-store. This surge in demand led to rapid advancements in technology, effectively bridging online orders with physical store operations. Even though this demand has normalised post-pandemic, the infrastructure and software developed during this time have paved the way for significant omnichannel progress.

Here’s why we expect omnichannel retail to expand in 2024:

Enhancing the Customer Experience

2024 is set to witness a significant blend of online and in-store retail, enriched by technologies that enhance the customer experience. For instance, augmented reality fitting rooms and interactive in-store displays are becoming more common. The global market for AR fitting rooms is projected to reach $3.17 billion in 2024 and could surpass $6 billion by 2027, according to Business Future Analysis.

The investment in technologies like virtual fitting rooms is showing positive results. A case study by Shopify Plus with UK-based fashion brand Rebecca Minkoff indicated that customers were 65% more likely to make a purchase after engaging with products through augmented reality.

Physical Presence of Online Brands

Aron Bohlig of ComCap notes that online-first brands are venturing into physical spaces through pop-up stores, experiential events, and collaborations with traditional retailers. This approach fosters direct customer relationships and gathers real-time feedback.

Notable examples in the UK include pop-up initiatives by eBay in London, Shein’s pop-up shops in major UK cities, and experiential events by brands like BarkShop in London’s fashion districts.

UK Consumer Economic Outlook

The economic outlook for UK consumers shows mixed sentiments. Although inflation has stabilised and consumer confidence has improved since mid-2023, a December 2023 survey by The Conference Board in the UK revealed diverse expectations regarding income. These perceptions are likely to influence retail strategies, from inventory management to tech investments.

For example, major retailers like Marks & Spencer are adapting their strategies, potentially shifting resources towards their growing ecommerce platforms.

Shopper Behaviour and Digital Integration

In the UK, a significant proportion of consumers use search engines for shopping research, often turning to platforms like Amazon UK and other retail websites. Ecommerce is expected to account for a substantial portion of total UK retail sales by 2027, suggesting a trend where most shopping experiences start online. Hence, physical retailers are likely to enhance their online presence in 2024.

Organisational Shifts towards Omnichannel

In the past, ecommerce operations in large retailers were often part of IT or marketing, separate from in-store operations. This is changing. Now, ecommerce and physical store managers typically report to the same executives, promoting daily collaboration and a unified retail channel. This is the essence of true omnichannel retailing.