Connexity kicked off the new year by attending the National Retail Federation’s flagship event in New York City. Known as retail’s biggest event of the year, NRF brings together more than 6,200 brands from across the globe for three days of learning, collaboration and discovery.
In addition to connecting with some of retail’s most innovative leaders, our team had the opportunity to sit in on some keynote sessions, including BÉIS Travel Founder and Chief Brand Officer Shay Mitchell, Glossier CEO Kyle Leahy, and Shopify President Harley Finkelstein who led an engaging conversation on disrupting retail, creating an iconic brand and what’s in store for them next.
Despite sustained macroeconomic pressure, retail sales growth is expected to accelerate over the next five years, according to Rachel Dalton, Head of Retailer Insights at Kantar. As the largest independent retail performance marketing company, we were stoked to see an optimistic future was a common takeaway throughout several sessions.
Navigating the retailer landscape in 2024 and beyond
In a session hosted by Jamie Clarke, Head of North American Retail at NielsenIQ, transformational shifts to the retailer landscape were highlighted:
- From 2009 to 2022, physical stores such as supercenters, supermarkets, dollar stores and drug stores have seen decreasing square footage
- In Q3 2023, e-commerce sales accounted for 15.6% of total U.S. sales
- Last year, out-of-stock issues cost the U.S. retail industry $48B
These insights show us the way consumers shop is changing — but how can retailers keep up?
- The first step in keeping up with these shifts is understanding the constrained consumer. While consumers are spending more, they are purchasing less. In fact, 90% of U.S. consumers have adopted a range of cost-saving strategies to manage their spending of fast-moving consumer goods (FMCG). Additionally, in 2023, shoppers’ assessment of their ability to afford everyday essentials hit a historical low four times.
- This year (and beyond), retailers will need to balance value and volume. External factors that have contributed to a decline in volume of sales include increased cost of living, sticking to essential purchases, SNAP program reductions, shifting meal occasions, food bank usage on the rise, and sales growing in untraditional retail. This led to increased online shopping with value retailers, such as Walmart and Sam’s Club, who are seeing rapid annual growth and are especially popular among Gen Z shoppers who tend to be thrifty and value these memberships for saving them money and time.
- One way for retailers to win back consumers is through promotions but retailers need to be more strategic in order to drive incremental growth. In 2023, 49% of consumers stocked up when items were on sale to manage price increases, and 26% of sales were promotional
- Let’s not forget convenience is the name of the game! In a separate session led by Kantar, it was revealed that shoppers are utilizing same-day or next-day delivery and in-store pickup more often when making online purchases. Keeping fulfillment innovation as a top priority is going to be key in order to win and retain shoppers especially ahead of major shopping events like Valentine’s Day and Cyber Five.
- Last but not least it’s critical to meet consumers where they are. With Connexity, retailers can expect incremental opportunity across shopper touchpoints:
Discovery: Audiences find brands and products through exposure across premium content sites
Search: Users search for products and compare prices using major search engines like Bing Shopping
Consideration: Consumers increasingly use online marketplaces to compare or review products before making a purchase and to fund new purchases
Influence: Social media users are motivated to shop by the influence of strong content creators
Overall, NRF was a great success and the team looks forward to connecting with leaders across the retail industry at future events. Didn’t get a chance to meet the Connexity team at NRF? Message us on LinkedIn.
