US Retail Trends to Watch

US Retail Trends to Watch

February 6, 2024

Retail, like all other industries, has had to respond swiftly to societal developments and changing attitudes of the US public. With the explosion of AI, a new door has opened for retail marketing and advertising, which will break through boundaries and expand the limits of consumers’ imagination. This article discusses key trends driven by technological advancements and changing consumer attitudes which we’ve seen throughout 2023.

AI Takes Off

Already, brands have begun experimenting with AI capabilities in their marketing ventures. Notably, Amazon is using Generative AI to improve a product’s purchase journey by summarizing the overall consensus on a product based on previous customer feedback. This feature will help shoppers more quickly and easily decide; by not needing to scroll through dozens of reviews. 

It is generally agreed that brands need to decide on a stance towards AI because it is not going anywhere. Many brands have chosen to embrace the innovation, stating that moving with the times is crucial for growth in the industry. On the other hand, many have folded their rejection of AI into their marketing strategy, agreeing with the many consumers who worry about the loss of creativity and independent thinking. Travel brand, Away, took out a full page spread in the New York Times to spread an anti-AI message, intending to emphasize that AI can’t replace the real world and real lived experiences. The success of this campaign highlights that customers appreciate a brand sticking to their values.

There is mounting distrust towards the use of AI in customer service, with over 50% of consumers agreeing that it’s something they worry about negatively affecting their online shopping experience. In our Evolution of the Customer Service Experience report, we found that over half of those asked had positive feedback about the customer service they had received because they were able to speak to an actual human. Almost 70% of consumers agreed that chatbots are only suitable for very basic inquiries. AI has the potential to bring us closer to interactions that feel more human and organic, however, it could easily go the opposite way, distancing users from the personalized experience they seek.

Entering the Metaverse

The popularity of AI has mostly overshadowed any hype surrounding the metaverse, especially as development in this industry has been slower. However, instead of abandoning the metaverse, brands have found innovative ways to combine the two technologies. AI can be used to efficiently ensure all languages are available in the metaverse, design more realistic and interesting avatars and power chatbots, among other applications. While the metaverse is still a developing technology, we found in our Retailing in the Metaverse report that two-thirds of adults agree that it has the potential to improve online shopping. The metaverse presents an opportunity to turn e-commerce into an immersive experience that exceeds in-person shopping. There will be no more sweaty and stressful changing room sessions, instead, e-commerce websites will allow customers to create an avatar with their exact measurements that they can use to try on clothes in seconds. 

The Growth of Social Commerce

One area of constant growth in the retail industry is social commerce. A new avenue for shopping has opened up to consumers. However, we found in our Social Commerce report that people are still wary of submitting their payment information on social media. Over 40% of those asked reported being more comfortable shopping on a brand’s website and roughly the same amount told us they have a lack of trust in the security of their payment information when shopping on social media. While trust in shoppable posts is low, we predict that technological advancements will cause consumer attitudes to change.

To help consumers feel safer in making purchases on social media brands are taking several different actions. One example is the use of credit instead of dollars for first-time shoppers. Additionally, brands can look to market themselves on new social media platforms. One shining example is BeReal, an image-sharing platform that has exploded in 2022 and 2023 which focuses on capturing the moment wherever you are and however you look. BeReal is a great way to inspire trust in consumers because it’s a much more natural and organic way to market. This is also a great opportunity to target a younger market, who are much more inclined to shop over social media

Sustainability is still a Priority

We found in our Sustainability in Retail report that shoppers are paying attention to brands’ ethics and actions on sustainability. Additionally, there has been a rise in awareness over greenwashing; meaning brands must not attempt to hoodwink their customers into believing false stories about ethical manufacturing processes. In response to a greater demand for transparency and sustainability, the resale market has boomed. Over the years, more brands, such as Urban Outfitters and Patagonia, have successfully based entire departments of their website and stores on resale. When big brands enter the resale market, it helps spread the message that secondhand items can be just as good, and often better, than new items. 

As it stands, dipping your toes into the resale market can seem quite intimidating but some organizations are looking to make the process smoother for brands. Archive is a start-up with a mission to guide retailers in setting up their own resale space. In doing so, they hope to make the sustainable shopping market more accessible for consumers.

Looking Ahead with Mintel

The transformation of the retail market over the last few years has been almost unbelievable. From setbacks like the COVID-19 pandemic and historically high prices to technological advancements like AI and the metaverse, society seems to never settle! Looking to the future, brands should focus on building consumer trust, particularly since progression can be daunting, especially with older customers who are used to shopping in a certain way. Proving to customers that they can trust AI, the metaverse or social media shopping will be the key to success in retail over the coming years.

Take advantage of Mintel’s in-depth market research to sharpen your strategies and align with the latest trends in consumer behaviour. Explore our extensive Retail Market Research today.

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