Retail in 2024 – Are we on the road to recovery, enabled by AI ofc?

Retailers continued to face many challenges in 2023, the most significant being slow economic recovery down to high inflation rates and consumer caution. However, could brighter times be on the horizon?

Technological advances are hoped to introduce efficiencies and a new government could be the ticket to upturn consumer confidence. However, much like for Starmer and his Labour government, it’s early days. The practical implications of AI and generative learning technologies haven’t been fully explored yet. Many will also no doubt take a “follow the leader” approach – letting the bold players (typically with deeper pockets) make the first moves, after which they will follow suit. Still, there is hope. Inflation is falling, household finances seem to be over the worst and, with time, it’s hoped that this will impact consumer sentiment for the better.

Taking Manchester as an example, its economy is reportedly set to grow by £71bn GVA annually by the end of the year. CBRE’s Which City? Which Sector? Report in June placed Manchester third among its top five growth cities for retail, behind Birmingham and Bristol, a point that doesn’t seem to be lost on the retailers and brands choosing to set up shop in the city. Sportswear brand REPRESENT has chosen Manchester as the location of its first store. SPACE.NK has expanded in to the Arndale and B&M has taken WILKOS spot in the centre.

As for e-commerce, the many ways that we are enticed to shop online – via apps, socials, e-commerce platforms and search engines – has seen the best of us down a 30 minute long rabbit hole about to purchase something, when we think about it, do we actually need? Consumers may be becoming more inclined to part with their cash but retailers have a tricky balance to strike between promoting their goods (as they should and have always done) and being conscious in their comms. AI certainly has its place in making shopping slicker, improving the experience for the consumer and cutting unnecessary cost for the retailer but, as always, technology needs to be used for the good. If it can help companies with their CRS efforts too, all the better.

So the outlook for the remainder of 2024 and in to 2025 may be described as cautious optimism. Against this backdrop, to stay in consumers favour and keep their custom, many retailers have worked on personifying their brands. By fostering a positive emotional connection with their customers via their brands, retailers can forge lasting relationships, increase loyalty and improve advocacy within their existing customer base to attract new followers.

As we’ve seen in recent years, brands that are considered authentic and have a personality that resonates with their target consumers seem to thrive. Brands such as PATAGONIA and its commitment to saving the planet and DOVE with its mission to improve the self esteem of women and girls, are just two examples of retailers breathing life in to their branding. Personified brands and emotional connections seem quite the contrast to AI and machine learning, but aren’t we all used to the hybrid life by now?

The pro-manchester Annual Retail Lunch will take place on Thursday 8^th August 2024. I look forward to speaking about all of the above and more with the excellent line up of speakers. See here for more details and to sign up.

Lauren Somers, Partner & Chartered Trade Mark Attorney – HGF