A millennial born in the digital age, I grew up arrogantly thinking brick and mortar was on its last legs. Ecommerce was the way forward, and before we knew it, we’d be living in floating armchairs with everything we needed on a projected screen in front of us (think Wall-E).
Turns out, things don’t move so linearly. And while technology might evolve exactly as quickly as you expect, human nature doesn’t quite match up in rate of change. We don’t want to live isolated from others, married to a holographic screen, consuming limitlessly.
Maybe we don’t want mandated office days, but we do want to be in the office, around people, on our own terms. We want the option to shop online, but we also want to know we can head into the city to try those jeans on for size. We’ll make a day of it—see friends for coffee, go to the gym, or run some errands.
Over COVID, we hedged our bets on direct-to-consumer commerce. Big Tech like Amazon went all-in on hires during the pandemic, then made massive staff cuts when eCommerce transactions tapered off earlier than expected.
Retail giants also bet big on leisurewear—anticipating a pivot to work-from-home comfies to stick around. But it wasn’t long before they realized they’d over estimated demand. Shoppers reported seeing leisurewear littering Target shop floors, and sales abounded to move stock.
Looking ahead, what can we expect from 2024? More of the same, or a shift for the better?
Online Retail Sales: 2024 Outlook
2022 saw a contraction in online sales worldwide, but 2023 has been back to growth again—around 7%. Now, even with the possibility of recession still hanging thick in the air (will it happen? will it not?), the consumer appears to be resilient.
The Economist Intelligence Unit, EIU, is predicting online retail sales growth globally to head back into double-digit growth (10.5%).
But the US and Western Europe will still be playing catch up, with more sluggish single digit growth than the global average. We’ll be seeing profitability pressures continue to restrict growth in the DTC space, with investors seeking better returns.
Brick and Mortar Sales: 2024 Outlook
If you’ve been following retail news, you’ll have seen Kohl’s has been suffering in eCommerce sales. Following other big brands, Kohl’s has committed to modernizing its physical presence, as well as providing offers and promotions consistently across all channels.
Consumers want brick and mortar, but they’re voting with their wallets, demanding a slick, engaging experience. Think Mecca, IKEA, Apple and LEGO.
Where SMB and mid-market retail can provide a more personal touch, retail giants are under pressure to supplement a lack of personalization with expensive tech and impressive fitouts.
EIU forecasts that brick and mortar sales will make up a whopping 85% of total retail sales in 2024. The businesses that have made it through high interest rates and rising costs will enjoy recovering foot traffic and a sales boost.
“2024 will see the strongest pace of growth for offline retail since the post-pandemic rebound of 2021,” EIU predicts.
This trend will be global. Beyond Kohls, other large retailers like Nordstrom (US) and Primark (Ireland) are planning store expansion in the US in 2024.
Overall Outlook for Retail in 2024
While the online sales forecast is still overcast, the clouds are clearing and a growth surge is on the horizon for brick and mortar.
Black Friday / Cyber Monday 2023 proved that the consumer is ever-resilient. We also saw that loyal customers are a critical asset to retailers—brick and mortar in particular.
Marsello’s latest data shows around half of eCommerce shoppers were repeat customers, and half new shoppers.
For brick and mortar retailers, on the other hand, repeat customers made up 80% of BFCM sales. What’s more, physical retailers grew their customer databases by around 22% over Black Friday in 2023.
Loyalty programs and customer marketing will play a huge part in boosting 2024 brick and mortar sales.
Yes, that’s a pitch to start a free trial of Marsello, connect your eCommerce and POS platforms, and start syncing the last few months’ worth of sales!
In 2024, it’s time to put all that data into motion… change is coming.
Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program
Published Dec 1, 2023 5:03:55 PM
