By Joel Percy
Competing in today’s retail market demands innovation and responsiveness. From new technologies to evolving customer habits and expectations, retailers must adapt to these demands and push boundaries to stay ahead in 2024.
The trend that dominated business’ attention last year was AI. But according to Bloomberg, only 4% of Canadian companies have actually integrated AI in any capacity. This adoption gap could put the Canadian grocery and retail sectors at risk of falling behind global trends.
Of course, AI isn’t the only development shaping the retail industry this year. Looking ahead, what does the rest of 2024 foretell? Understanding and leveraging emerging trends will be crucial for Canadian retailers this year to remain competitive and capitalize on new opportunities.
Retail Trend #1 – Powering Personalization at Scale With AI
Value is paramount for Canadian consumers. A Google-commissioned Ipsos survey showed 57% of respondents cited deals and promotions as the most beneficial communication from brands. This trend isn’t solely about general savings, it also reflects a specific response to economic pressures. Our 2023 Grocery’s Great Loyalty Opportunity report found that 59% of North American consumers have or are cutting back on dining out due to economic pressures. Globally, 84% of consumers believe personalized recommendations could help them save at the shelf, underscoring the importance of hyper-personalized marketing strategies.
Canadian retailers must focus on delivering highly personalized experiences to influence consumer decision-making, as underscored by Dalhousie University’s 14th annual food report, which finds that a family of four will now spend an additional $700 on groceries due to price increases.
Presenting offers that resonate with customers’ needs will not only meet their search for value but also build loyalty. By leveraging AI for personalization at scale, retailers can engage shoppers in a true one-to-one mode, aligning with evolving consumer trends.
Loblaws’ PC Optimum is an example of one leading Canadian loyalty program already delivering on hyper-personalization. With nearly 16 million active members, shoppers receive personalized offers weekly based on their preferences and where they shop. In 2022, approximately $1 billion in points were earned through the program, and in 2023, Ipsos named PC Optimum one of Canada’s ten most influential brands.
The success of PC Optimum highlights how retailers can provide a highly individualized shopping experience. AI can take these capabilities to the next level.
Retail Trend #2 – More Phone-Out Shopping in 2024
The death of brick-and-mortar has been prophesied for years, but according to the Canadian National Statistics Office, ecommerce accounts for only 5.8% of total retail trade. Meanwhile, 1WorldSync reports that 87% of shoppers use their smartphone to research a product while in-store at least some of the time. This is prompting retailers to consider how to create more “phone-out” shopping experiences.
In the second edition of Omnichannel Retail: How to Build Winning Stores in a Digital World, Eagle Eye CEO Tim Mason spotlights Nike’s innovative in-store strategies and approach to customer self-service via their app that includes digital try-ons through augmented reality and dynamic, real-time in-store promotion – both illustrating a mix of digital and physical retail realms, and the importance of phone-out approaches.
Nike’s success should encourage Canadian retailers to rethink how they see the role of phone-out shopping, and how it can connect online and offline shopping experiences.
Retail Trend #3 – Further Channel Convergence in Marketing
Canadian grocer Metro recently launched a personalized rewards program, partnering with the Royal Bank of Canada for a co-branded credit card to provide consumers with more savings opportunities.
However, the success of such programs can only happen when channels and customer data are converged instead of isolated. In 2024, expect retailers to unify their channels for a deeper understanding of customer behaviors, moving beyond traditional data silos.
This will result in forward-thinking retailers providing fewer online and offline experiences and more “joined-up” experiences that combine multiple channels to perform functions like predictive recommendations, dynamic content and more engaging functions, all powered by live, real-time data. This evolution is part of improving the shopping experience by effectively harnessing technology and the wealth of data retailers already possess.
2024 is shaping up to be the year when retailers switch to hyper-personalization – driven in part by AI – to deliver unique experiences for every shopper. Expect to see online and offline experiences coming together as part of the omnichannel retail model, with consumers now expecting this integrated approach.
Brands that embrace and invest in these trends will be best placed to emerge as leaders in the Canadian retail landscape.
Joel Percy is Eagle Eye’s director of North America. He’s an experienced loyalty and CRM executive who helped design, launch and run PC Plus at Loblaw Companies, and has consulted retailers globally on designing personalized marketing programs.
