Retailers continue to experiment with generative AI and are seeing that the technology holds great promise for reigniting growth—if they move quickly to seize the opportunity. Once generative AI (gen AI) hit the mainstream, in late 2022, it took little time for retail executives to realize the potential in front of them. Mentions of artificial intelligence (AI) in retailers’ earnings calls soared last year—which was no surprise, given that gen AI is poised to unlock between $240 billion to $390 billion in economic value for retailers, equivalent to a margin increase across the industry of 1.2 to 1.9 percentage points. This, combined with the value of nongenerative AI and analytics, could turn billions of dollars in value into trillions.

We’ve enjoyed a front row seat in retail for years, thanks to our partnerships with Nordstrom, The Bay, Bloomingdale’s, and others. These relationships inspired us to survey Global Merchandising, Planning, and Buying leaders to bring you timely retail benchmarks, operational insights, and actionable takeaways.

There are undeniable challenges, but retailers are savvy…

Strategic storefronts and partnerships

In today’s competitive retail landscape, where 84% of retail sales continue to occur in-store, engaging consumers at the point of purchase is more critical than ever (Emarketer, May 2024). Vibenomics recognizes that in-store advertising gives brands and advertisers a unique opportunity to influence shopper behavior at the moment of purchase decisions.

To better understand this dynamic, Vibenomics conducted a comprehensive survey with Suzy Market Research that gathered insights from 1,070 shoppers between the ages of 18 and 73. These participants, all of whom identified as primary or shared shoppers of their household, provided valuable perspectives on the shopping journey and the impact of in-store advertising on purchase decisions. The findings of this survey offer a deep dive into the power of in-store advertising and its pivotal role in influencing shopper behavior in today’s retail environment.

Despite e-commerce growth, consumers still prefer in-store shopping across all retail sectors. Vibenomics’ In-Store Data Report, which surveyed 1,000-plus household shoppers, uncovered this and several other trends to help guide retailers in optimizing in-store experiences during the upcoming holiday season.

Brick-and-mortar stores provide a space for customers to discover new products and connect with them, driving both planned purchases and impulse buys. To capitalize on this opportunity, retailers should focus on enhancing in-store experiences, implementing personalized marketing (without compromising privacy), and leveraging digital in-store advertising. Addressing these areas sets retailers up for creating a positive experience that inspires spontaneous purchases and complements the holiday spirit.

As the 2024 holiday season draws near, uncertainty looms large in the retail sector. From fluctuating consumer demands to unpredictable economic pressures, navigating the upcoming holiday season is more challenging than ever. Gain exclusive insights into how top retailers from department stores to specialty shops are strategizing for holiday 2024.

In-store shopping sentiment is up 21%, according to a Ryder System Inc. annual e-commerce study, and while consumers have a robust appetite for online shopping they are embracing in-person shopping. The fact consumers want a blend of physical and digital convenience underscores the important of retailers having an omnichannel strategy, according to a press release on the findings.

“Retail and e-commerce continue to evolve,” Jeff Wolpov, senior vice president of e-commerce for Ryder, said in the release. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.”

Luxury goods houses are exploring new ways of using the latest technology in their boutiques, integrating it into the high-end human interaction and expertise that is at the heart of their brands, according to a new report by Bain & Company for the Comité Colbert, the trade association for the French luxury industry. Scaling up this deployment will require a deep cultural transformation of these maisons.

Retailers are increasingly integrating digital innovations into physical stores to enhance customer interactions and streamline operations. Modern retail demands swift adaptation to manage the increased diversity and complexity of interactions across multiple platforms. Real-time data computing has become essential for efficiently meeting the demands of today’s fast-paced, data-driven retail environment.