Out of the eight billion people in the world today, 64% use the internet, double the rate from a decade ago. Internet access has disrupted consumer life, including how they shop. Euromonitor International forecasts that consumers will spend nearly USD11 trillion on goods and services bought online in 2024.

This growing digital base needs to be at the center of your retail strategy. At NRF 2024: Retail’s Big Show in January, I spoke about the digital shopper trends that will have the biggest impact on retailers and brands. Let’s break down three big ones to watch in 2024.

Intuitive E-Commerce

The rising influence of digital channels is putting pressure on companies to improve the online experience. This is becoming possible due to evolving data-gathering strategies and emerging technologies, from AR to IoT to generative AI. These advances have the potential to transform the online shopping experience, leading to one that is more intuitive.

Consumers have greater expectations. About half of digital consumers want one-of-a-kind offerings. A fifth note the desire for more personalized shopping experiences. In both cases, these sentiments are higher among the most digitally savvy population, according to Euromonitor’s consumer research. That is telling as this shift toward a more intuitive experience is playing out on digital channels where these consumers shop more frequently.

In part, this means ensuring the online channel is more akin to what a consumer might experience in person. While a variety of data and tech will be used, generative AI is poised to take on a central role in shaping the online experience. Generative AI can be leveraged in a variety of ways, from improving customer service to tailoring marketing messages to optimizing supply chains.

Virtual assistants powered by generative AI can create a more intuitive experience by using additional information sources for added context. Zalando’s new chatbot offers suggestions based on natural questions the shopper might ask, and in the future, could be combined with personal preferences, taking steps toward making the discovery experience feel more intuitive.

Almost half of industry professionals say they plan to invest in generative AI in the next five years

^{Source: Euromonitor’s Voice of the Industry Survey, 2023}

New technologies like generative AI could give brands a competitive advantage. The pioneers who can create a next-generation shopping experience using these advances will be the ones that fuel a new shopping behavior and usher in the next so-called “Uber moment.”

TikTok Economy

Digital consumers are flocking to TikTok and its Chinese sister platform, Douyin. Brands are striving to promote their products and services on these platforms known for their short-form video content, but some of the viral trends that are doing the most to boost brand sales are emerging organically from users on those platforms.

These ByteDance platforms are not only some of the most popular, but also the fastest growing. As of 2023, 43% of digital consumers globally report using them monthly, a 19-percentage-point jump in three years, according to Euromonitor’s Voice of the Consumer: Digital Survey. These short-form video platforms, also known for their endless scroll and advanced algorithms, are a hit with young consumers, especially Gen Z.

Although most marketing campaigns on TikTok are financed or initiated by brands, some of the most viral content is organic. In 2023, an Israeli TikTok influencer posted a video of herself wrapping a frozen Betty Crocker Fruit Roll-Up processed snack around ice cream to create a crunchy fruit-flavored ice cream cone. Almost overnight, Fruit Roll-Ups began flying off shelves, creating a black market.

ByteDance platforms are dabbling in retail. In 2020, Douyin pivoted from being a pure social media platform to a retailer, prioritizing smaller sellers with a low-fee structure with revenue supplemented by advertising. Douyin has seen massive e-commerce gains. Online sales of beauty and personal care products on Douyin’s marketplace surged 81% in the first nine months of 2023, as compared with the same period in 2022, according to Euromonitor’s new e-commerce research. As for TikTok, its TikTok Shop is finding success in Southeast Asia and set up shop in the US and UK in September.

Revamped Returns

Consumers have long wanted hassle-free returns but delivering on that expectation has not been without challenges. The convergence of trends, like the rise of e-commerce, closure of stores by some retail chains and boost in sustainable strategies, is moving returns up the industry agenda. New technologies and partnerships are paving the way to a happier return experience for shoppers.

Creating a hassle-free return experience is not without challenges. First, what is deemed hassle-free varies by consumer. Although 43% of digital consumers point to mail as the preferred channel for online purchase returns, preferences vary by generation. For example, baby boomers prefer to return by mail, while Gen Z prefer to return in-store. To solve the unhappy return experience, the industry needs to shift its mindset, viewing this as being about improving loyalty, rather than a revenue drain.

Retailers are deploying a variety of tactics to reduce returns or at least their impact on the bottom line. Electronics specialist Best Buy is opening 10 smaller outlets, specializing in selling used and refurbished electronics. The aim of these stores is to target budget-conscious shoppers and recoup more from open-box and return products. More and more retailers are outsourcing the return experience to companies like Happy Returns or Loop Returns, which provide merchants with a customizable online portal for returns and exchanges.

To date, many retailers have struggled to grasp the pivotal role returns play in shaping customer loyalty and, as such, have sidelined this moment. That’s changing.

Two-thirds of retail professionals said they plan to continue or even accelerate investment in product returns

^{Source: Euromonitor International’s Voice of the Industry: Retail Survey}

Looking ahead

These trends demonstrate how online shopping continues to mature, improving the customer experience from the moment of discovery to potential product return. A second, prominent theme is how consumers desire more power in their relationship with brands. TikTok Economy is rooted in how consumers are using social media to gain power in the value exchange. This power has led to more authentic messaging, which resonates with younger consumers like Gen Z.

As you begin to execute your 2024 strategy, use these insights to guide your campaigns, decisions and growth plans with the most digitally savvy consumers.

Original Article: https://www.euromonitor.com/article/three-digital-shopping-trends-to-watch-in-2024

Original Article: https://www.euromonitor.com/article/what-are-the-top-consumer-trends-in-2024

Global e-commerce spending will be led by millennials this year and they prefer online versus in-store when it comes to shopping.

Those are top findings from an ESW Global Voice survey that revealed more than 25% of millennials will spend more online this year when it comes to health, beauty, apparel, consumer electronics and luxury items.

The study also revealed nearly 73% of millennial shoppers plan to spend the same or more online in 2023, which will make this cohort the leader in global e-commerce spending this year, according to a press release on the findings..

“The millennial consumer remains fully committed to their preference for online shopping over physical retail,” Patrick Bousquet-Chavanne, president and CEO, ESW Americas, said in the release. “Millennials’ spending power has grown to $2.5 trillion, and they are not yet even in their prime earning years. They are spending more online than in-store across several categories, and these results indicate that brands must continue to evolve, improve, and optimize their e-commerce to attract and retain this increasingly powerful demographic.”

The survey’s polled more than 16,000 respondents across 16 countries comprised international shoppers across all demographics.

Additional findings include:

• Nearly 50% more millennials will increase their online spending for health and beauty products compared to Gen Z, and 42% more than Gen X and Baby Boomers.
• 27% of millennials will spend more for luxury goods online in 2023, compared to 20% of Gen Z, 22% of Gen X, and 21% of Baby Boomers.
• 77% more millennials will increase their online spending for apparel and footwear versus Baby Boomers.
• 25% of millennials will spend more for consumer electronics, such as phones, games and software, compared to 19% of Gen Z and Gen X respondents, and just 13% of Baby Boomers.

See the full report of ESW: https://esw.com/wp-content/uploads/2022/01/global_voices_2022.pdf

Original Article: https://www.retailcustomerexperience.com/news/millennials-are-the-big-retail-spenders-this-year/

Enhanced Instacart Pickup service now live at 1,500 supermarkets in 30 states Instacart is doubling down on click-and-collect online grocery service with an upgraded Instacart Pickup product and a nationwide rollout to retailers by the year’s end.

To support the expanded grocery pickup business, San Francisco-based Instacart on Tuesday named company veteran Sarah Mastrorocco as general manager of Instacart Pickup, a newly created position.

Currently, Instacart Pickup is available at more than 1,500 stores in 30 states through over 50 grocery retailers, including Albertsons, Publix Super Markets, Wegmans Food Markets, Schnucks Market, Price Chopper, Gelson’s Markets, Shop ‘n Save and The Fresh Market. Plans call for the service to be live at supermarkets in all 50 states by the end of 2020, Instacart said.

“2020 is the year of pickup. For our retail partners, we’ve seen Instacart Pickup become a gateway to growth in a margin-thin industry,” Instacart President Nilam Ganenthiran said in a statement. “Our pickup product is also becoming a significant revenue contributor for our retail partners, growing customer basket size by an average of 15% and accounting for an average of 20% of a retailer’s total Instacart store sales.”

Instacart said its “reimagined” pickup product has launched gradually at grocery retailers in recent months and is now available across the United States and Canada. Among the key new features is Smart Storefronts, which enables customers to view
delivery and pickup options from one digital storefront for each of the grocers they shop on the Instacart platform. As a result, users can now toggle between delivery and pickup options to see the latest inventory by store and compare time windows for both.

The updated Instacart Pickup also facilitates collecting after clicking. Pick Your Pickup Mapping functionality allows customers to view and choose the pickup location most convenient to their route that day, such as when coming from home, work, soccer
practice and elsewhere. In addition, customers can now enable location-based notifications, known as On The Way Alerts, to let their store know when they’re on the way and getting close. That allows in-store shoppers to be ready and waiting for
Gelson’s has expanded its partnership with Instacart to add pickup to all of its store locations.

“At Gelson’s, Instacart Pickup is an integral part of the way we’re evolving to meet the changing needs of our customers, who appreciate the flexibility and affordability that comes with a curbside offering. We recently expanded our partnership with Instacart to add pickup, in addition to delivery, across 100% of our store locations,” said John Bagan, chief merchandising officer at Encino, Calif.-based Gelson’s Markets. “With this new partnership, customers can now have groceries and household essentials as well as beer, wine and spirits ready for same-day pickup. While still early days, Instacart Pickup is growing double-digits for us quarter over quarter, making it clear how much our customers value — and have come to rely on — this new experience.”

Other new Instacart Pickup features include customized navigation, which sends customers to the mapping app of their choice to automatically direct drivers from their current location to the store. Users, too, can now share their order details with friends
and family to designate another driver for an order pickup. Instacart added that it’s also continuing to expand alcohol pickup service, currently offered via 20-plus retail partners, including Aldi, BevMo!, Publix, Save Mart, Sprouts Farmers Market and Wegmans.

“We first partnered with Instacart to bring Cub stores online with delivery in 2015 and, based on the overwhelmingly positive customer response, last year we expanded ourInstacart partnership to include pickup across nearly 100% of the Cub store footprint,” according to Darren Caudill, senior vice president of sales, merchandising and marketing at Minneapolis-based Cub Foods. “Cub Foods customers are shopping online more than ever before, and having a seamless pickup experience is an important part of the digital offering we’re building for those loyal customers. It’s also been a boon for our business. We’ve seen our pickup business double in the last three months alone.”

Instacart said it’s launching pickup service at hundreds of stores monthly and expects to more than double the number of locations offering the service this year.

“Instacart’s broader business continues to grow at an incredible clip, with pickup as our fastest-growing product,” noted Ganenthiran. “With the completed rollout of the new Instacart Pickup and the appointment of Sarah as our new GM, we’re laying the groundwork now to prepare for another year of triple-digit growth. By year-end, we expect to have the largest pickup retail footprint in North America and, in the coming years, to grow Instacart Pickup into a multibillion-dollar business.”

In her new role, Mastrorocco (left) will work with partners across the Instacart organization to oversee and scale the fast-growing pickup operation, the company said. She joined Instacart nearly six years ago as the first member of the business
development team and then served in various leadership posts in such areas as catalog and account management. Most recently, she was vice president of business development. Before coming to Instacart, Mastrorocco was a member of PepsiCo’s
Global Operations Group, working on direct-store delivery operations in North and South America, and served on Frito-Lay North America’s strategy and M&A team.

“As we’ve come to understand the massive growth opportunity ahead for this product, it made sense to deepen our commitment to Instacart Pickup and grow our team to prepare for a year of expansion and innovation in the space,” Mastrorocco told
Supermarket News. “I’m thrilled to have the opportunity to lead this work — which is powered by a very talented group of people, including product managers, machine learning engineers, data scientists and operations researchers — to better serve the pickup business and deliver more innovative products for customers.”

Instacart Pickup debuted at a handful of retail partners in 2018, and last year Instacart doubled the number of retailers and tripled the number of states offering the service. Mastrorocco reported that pickup accounts for 20% of a store’s overall Instacart sales within four to eight weeks of the service’s launch.

“Today, we have more than 350 grocery and retail partners on our marketplace, and more than 50 of those now offer pickup as an option. That’s a lot of green pasture to power pickup for our industry,” she said.

For consumers, online grocery pickup is a natural evolution from home delivery, Mastrorocco added. “The growth we’re seeing is rooted in what we’re hearing from our customers. Consumers are in the driver’s seat more so than ever, and pickup gives
them one more highly flexible and affordable option to choose from,” she said. “Whether they’re doing their weekly shop, stocking up with pantry essentials, or shopping for a special recipe, people love being able to choose how to get what they want.”

On the delivery side, Instacart’s service is available at nearly 25,000 stores in more than 5,500 cities in the U.S. and Canada, serving over 85% of households in the U.S. and more than 70% of households in Canada.

Read original article: https://www.supermarketnews.com/online-retail/instacart-sees-2020-year-grocery-pickup