What you need to know about retail trends in 2024

Future of the Consumer industry

As the world changes, consumers’ behavior is also changing, with major ramifications for the retail sector in 2024 and beyond. While the outlook for consumer spending remains uncertain, there are reasons for optimism¹ : inflation is in retreat, the economy is recovering and technological advances are reducing costs, improving productivity and enhancing the customer experience. 

Yet, the ongoing geopolitical instability means consumers (and their employers) are set to remain both cautious and selective. This article highlights five major trends in the retail sector, which need to be reflected in your strategy. 

But first, let’s consider the context. Through an extensive, year-long effort studying the future of the consumer industry, we have identified six forces that are critical to understanding the next decade: 

1. The changing consumer: Consumers in developed markets are increasingly diverse, as inequality continues to rise, while the population ages and becomes less white and more gender-fluid. 
2. An evolving society and culture: Young people are less likely to go to church, get married or buy a home than their predecessors. 
3. Exponential xTech: Breakthroughs in high-cognitive and creative fields, fuelled by a doubling in the computational power of AI every three months, are driving further digitization and automation. Meanwhile, augmented reality, health and wellness tech, materials and bioscience are advancing rapidly.
4. Radical industry upheaval: New categories of goods and services, particularly in the digital domain, are increasingly vying for market share: 12% of discretionary spending is now on digital goods and services.
5. Extreme climate change: Changes in consumerism, together with the energy transition, are pivotal to combatting climate change: about 60% of all greenhouse gases are produced by consumers and the consumer industry.
6. Shifting economics, policy and power:  Rising geopolitical risks and changing policies call for new management approaches. For example, tax incentives are fuelling reshoring of manufacturing and investments in renewable energy infrastructure.

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Retail Trends 2024

As these six forces converge, retailers (like other businesses) need to leverage new markets, explore new business models, and change the mechanics of the way they do things. In particular, retailers need to get ahead of the following five trends, which are set to shape both 2024 and the rest of this decade:

• Demand-driven retail: In response to the growing diversity among consumers, and within society and culture, the retail industry will become ever more demand-driven. This year, we will see the development of products specifically designed for and targeted at previously under-represented consumer groups, including ethnic minorities, seniors and people with disabilities. For example, Kimeze is selling high-end glasses specifically designed for people of Afro-Caribbean origin, filling a gap in the market.
  
  
• Hybrid retail: The exponential advances in digital tech are going to accelerate the merger of traditional products and channels with the digital world to open up new consumer experiences. In the year ahead, retailers will increasingly blend digital and physical formats to appeal to consumers who prioritize quality, value, choice and convenience differently. Gaming will be a particularly attractive channel for retailers and brands looking to create digital products, as exemplified by the partnership between Lego and Epic Games, maker of Fortnite.
  
  
• Responsibility as a requisite: Extreme climate change, together with the changing consumer mix, will further pressure retailers to focus on ethics and sustainability. The European Corporate Sustainability Reporting Directive (CSRD) will force retailers to put responsibility at the top of the agenda. Regulations will add complexity and costs to doing business, but there are also growth opportunities. For example, there is likely to be massive growth in the resale market, with the luxury sector, in particular, poised to capitalize on this. A great example is the expansion of second-hand clothes market, Vinted, which now has 800 million items listed for sale on the platform. Elsewhere, ultra processed foods will come under the spotlight, as new products are developed to meet demand for healthier foods.
  
  
• When industries collide: The radical upheaval of industries will open up opportunities and present challenges for retailers.  For example, info-tech and bio-tech are on a collision course with retail this year. As a result, rising demand for personalized nutrition and weight loss drugs will further deepen the ties between retail and healthcare. At the same time, social commerce will finally mature, disintermediating the relationship between brands and retailers as Meta, TikTok and other social media players develop the capabilities to operate a retail ecosystem within their own four walls. 
  
  
• Seismic supply shift: Shifting economics, policy and power mean supply chains will undergo substantial changes in the coming decade, becoming more diversified and complex, moving closer to the consumer, with increased last-mile expectations. In addition, safety, responsibility, ecological impact and transparency will all be thrust to the forefront. In 2024, one focal area will be greater collaboration between competitors to become more sustainable. For example, American Eagle has implemented a shared services approach to it supply chain, meaning its competitors can tap any spare capacity.  

To dig deeper into how the retail sector is changing, please see our new report here: Retail Trends 2024. Please contact Deloitte's Retail lead Adgild Hop if you would like to discuss what the key trends in retail could mean for your business.

Consumer Insights

To better understand changing consumer trends, sentiment and behaviour, Deloitte monitors the attitudes of over 20,000 consumers across 20 countries. Deloitte’s monthly ConsumerSignals pulses consumers on financial wellbeing, price perception and spending intentions. We offer insights into how and where consumers shop, how they deal with rising prices and which choices they make. 

Visit the interactive dashboard to discover the latest findings on the current consumer mindset and filter the data by country, age and month. 

 1. At the start of the year, Deloitte’s Consumer Signals platform – which tracks the sentiment of tens of thousands of shoppers across the globe – showed a decline in concern about inflation, an increase in spending intention and modest improvement in consumers’ financial wellbeing.