100 Keyword Forecasts 2024 | New Retail (61-70): Frugal Economy, Community Retail and Happy Retail

The report "100 Future Trends 2024" released by Wunderman Intelligence is divided into ten sections, and our article today will tell you about one of the sections - the ten trends of new retail life. It is recommended for those who want to understand the retail industry.

In 2024, the Dragon's Journey begins! Every early spring, Wunderman Intelligence will once again release the "2024 Future Trends 100" report. This report is based on 10 sections, supported by 100 forward-looking keywords, and guided by nearly a thousand innovative cases, making it the world's most valuable annual trend forecast report.

The entire report consists of 10 sections: culture, technology and innovation, tourism and vacation, brand and marketing, food and beverages, beauty and skin care, retail and commerce, new luxury life, health, and work, with 100 keywords and 100,000 words.

Today, let’s take a look at the 10 trends in the seventh article “New Retail Life” .

1. Membership clubs of retail department stores

Department stores are going beyond the traditional shopping experience and introducing unique super membership clubs. At the end of 2023, Harrods launched a highly anticipated membership system in Shanghai, creating the "The Residence" membership club. Only 250 members are allowed to join, and the annual membership fee starts at RMB 150,000.

• According to WWD, the club's membership criteria are stricter than other clubs, with members screened based on lifestyle and interests.
• The club not only has a bar, luxury lounge, private rooms and open-air terrace, but also a top restaurant run by celebrity chef Gordon Ramsay.
• Members have access to premium services such as aviation, real estate, interior design and personalized shopping, as well as private events and masterclasses hosted by brand partners.
• Sarah Myler, international business development and communications director at Harrods, said: “ We want to build a community for our members who share their passions, whether that’s whisky collecting, entertainment or the arts. Our aim is to provide unparalleled customer service while also creating a specially designed space for like-minded people. ”

Another department store, Selfridges, launched its new loyalty membership program, Selfridges Unlocked, in July 2023. Although without a specific physical space, the program offers members similar privileges, such as access to community events such as dinner clubs, film premieres and beauty masterclasses.

Innovation inspiration: Shoppers are looking for more than just products from retailers. As Ashley Saxton, director of restaurants and kitchens at Harrods, said : “It’s not just about the product, it’s about a unique experience.”

2. Fantasy digital space - a fantasy store that breaks the boundaries of retail!

A new concept is taking retail stores beyond their physical boundaries and into a fantastical digital space. Benjamin Benichou, digital artist and founder of social commerce platform Drop, presents the most experimental interpretation of this idea yet.

• He designed a series of AI-generated Nike concept stores, spaces that Benicio calls “Impossible Stores” that push the boundaries of design.
• Some of the designs showcase futuristic touches within traditional Japanese architecture in Kyoto, another appears on Mars, and another imagines a geometric cube atop Mount Everest.
• Benicciu told VML Intelligence that he believes these unconventional ideas can inspire real-world retail design, pushing architects and designers to think beyond conventional thinking and explore new materials, shapes and structures that can enhance the retail experience.
• Furthermore, Benicio believes that by working with AI, we can reach new creative heights and push the limits of what’s possible.

Generative AI companies like Dalle-E and Midjourney are promising tools for boosting creativity and sparking imagination, and they are becoming increasingly accessible.

Adobe Firefly, which was released for commercial use in October 2023, allows users to easily generate their own AI visual effects through simple text prompts. Adobe calls Adobe Firefly "your new imagination partner."

Duffey also observed broader business opportunities, saying: “We are now beginning to see the second wave of generative AI’s impact on the creative industries, bringing new business models, reshaped strategies and innovative capabilities to creative agencies and companies.”

In addition to generative AI, brands are leveraging Metaverse tools to transport shoppers to new virtual destinations.

• Bloomingdale’s invites shoppers to enter a hyper-realistic chocolate factory inspired by Willy Wonka. Powered by Empire’s virtual reality platform, the Wonka Room lets visitors take part in treasure hunts, browse product collections, or simply immerse themselves in the giant chocolates.
• In the summer of 2023, Ralph Lauren launched the fantasy virtual store "House of 888" located in a desert landscape. David Lauren, Chief Brand and Innovation Officer of Ralph Lauren, said in an interview with Wallpaper Magazine: " Creative innovation is the core gene of Ralph Lauren. We are bringing the brand into real life in a whole new way to attract a new generation of luxury consumers who are increasingly realizing their dreams and lives in the digital space."

Innovation inspiration: 57% of millennials have tried or intend to try stores in the virtual world, and 63% of millennials are interested in virtual reality commerce. In response,
Brands are creating immersive, imaginative spaces that allow consumers to step into the company’s world, showcasing creative flair and previewing the future of e-commerce.

3. A new generation of luxury goods custodians/collectors

Don’t call them luxury consumers, call them luxury custodians/collectors.

The concept of luxury goods is changing. Zhang Jing, global editor-in-chief of Jingbao, told VML Intelligence: " Scarcity may replace price as the hallmark of luxury goods, as more and more high-net-worth consumers want to become collectors."

Zhang Jing said: "The importance of experience will surpass the past pursuit of must-have 'things', because China's retail, luxury and commercial sectors all carry more texture, cultural differences and ideological connotations."

Fashion designer Phoebe Philo took this to heart and brought a whole new model to the luxury fashion house, combining extreme rarity with deep tradition.

• The first collection was launched in October 2023 and caused a huge response. The brand abandoned the traditional rules of luxury fashion and did not hold fashion shows or release products according to seasons. Instead, it released limited and unpredictable items that were constantly updated over time, avoiding the shopping method of pursuing the latest designs every season.
• Philo said: Our goal is to create products with long-lasting quality. Phoebe Philo's business model is to establish a responsible balance between production and demand. For us, this means producing far less than the expected demand.

Other luxury brands are also embracing the trend of “museum-ization” consumption.

• According to an August 2023 report by Business of Fashion, designer brands are turning disposable beauty products into collectibles. Guerlain released a traditional collectible perfume bottle in November 2023. The perfume bottle, called the "Black Bee Prestige Edition", was created by French jeweler Lorenz Bäumer and crystal manufacturer Baccarat. It is limited to 22 bottles, each priced at 25,000 euros (about 27,380 US dollars).
• Gucci is entering the world of curation with a digital art auction in partnership with Christie's. The auction, called Future Frequencies, features 21 NFTs and will go on sale in July 2023. Artist Claire Silver, who presented two works at the auction, said her work celebrates the advent of the age of artificial intelligence, including "the depth of cultural heritage and the light of the future."

Innovation inspiration: The role of luxury brands is changing. Fiona Harkin, the foresight editor of Future Lab, told the Luxury Association: "Luxury brands need to become guardians of craftsmanship and origin. The next era of luxury will be defined by collection rather than consumption, and both brands and consumers will become curators and managers of luxury goods."

4. Community-centric retail – A sense of community is helping shopping thrive

According to a report by Coresight Research in the United States, foot traffic in physical shopping areas has been low, especially in ground-floor shopping areas. However, community-centric strategies are helping to reverse this situation. One strategy is for developers to strongly support local independent retailers to create a sense of community. In Poole, UK, a creative project is transforming Kingland Crescent.

• This once run-down high street is now home to 10 thriving local independent retailers, including a record store, coffee roaster, fishmonger and jewellery shop.
• The project, initiated by LGIM Real Estate Assets, a subsidiary of financial services company Legal & General, has provided rent- and rates-free units to emerging local businesses over the past two years.
• Denz Ibrahim, head of retail and future development at LGIM Real Assets, told VML Intelligence that the key to meeting consumer demand is to deliver “a location-based, meaningful approach.” These locations can become the heart of a community while integrating key local service anchors such as healthcare, education and workplaces.
• Legal & General also offers guidance and legal advice to tenants, hoping that this approach can become a blueprint for other struggling towns. Ibrahim explains: “Since launching Kingland, our tenants have had great success, learning, growing and scaling up here. In the first year, Kingland brought in an additional £2.2 million of spend and we saw turnover increase by more than 35% year-on-year.”

In the United States, shopping malls that cater to Asian customers are bucking a decline, also thanks to their sense of community.

• NBC reported on vibrant Asian shopping malls that have become social gathering places offering entertainment, activities and a buzzing atmosphere, with diverse content such as night market dining, maternity and baby stalls, dancing and K-pop merchandise.
• New shopping districts are also increasingly being designed with a focus on community connection. Nan Fung Group has proposed a concept of “wholeness” in its new Hong Kong development, Airport Town, designed by Snøhetta, inviting people from all walks of life to come together in this place and build connections with each other and nature.

As Ibrahim said, appealing to the local crowd and offering complementary products has also proven its value.

• UK startup Patch is building neighbourhood shared spaces to increase foot traffic to retail stores. These spaces are inspired by the idea of ​​working close to home, without the dreaded commute, and improving work-life balance.
• Founder Freddie Fforde told VML Intelligence the brand's mission is to "create opportunities for people, jobs and communities on every street in the UK".

In China, this phenomenon is called “community aesthetics of the smallest vitality unit.”

Innovation inspiration : In the UK, US and China, 56% of people say they have “no sense of community”. It would be very attractive if retail areas could find innovative ways to help people reconnect and fill the gap left by the disappearance of shared public spaces.

5. Frugal Economy : A New Trend to Meet Consumption Downgrade

As inflation rises, retailers must adapt to the rise of frugal habits.

According to VML Intelligence, the cost of living is one of the top concerns for people today, with 64% of people globally listing it as one of the most pressing issues facing society.

Although the long-term economic outlook looks positive, consumers will still feel the pinch through 2024. According to the International Monetary Fund (IMF), the global economy is struggling rather than recovering quickly in the short term, and most countries are unlikely to return inflation to target levels before 2025.

Consumers around the world are demonstrating their resilience by adjusting their attitudes toward frugality and revitalizing their shopping habits.

According to McKinsey, 80% of U.S. consumers, including 88% of Gen Z and Millennials, are seeking better value by purchasing different products.

This shopping behavior will continue in 2024, and brands and retailers will need to leverage low-price strategies to support these savvy shoppers.

• Canadian food delivery app SkipTheDishes does just that with its “Inflation Recipes” grocery shopping tool, which predicts the biggest price drops on 400 popular ingredients at 100 grocery stores and uses that data to create affordable “chef-inspired” shopping recipes.
• In France, supermarket giant Carrefour has positioned itself as an ally of consumers in the fight against “shrinkflation” – the practice of reducing the size or quantity of products while keeping prices stable. In-store signs directly name and shame brands that adopt this strategy until they agree to lower prices.
• Pet care brand Wilder Harrier isn’t just about low prices, it’s also about supporting its customers. The company is building a network of community pet food pantries where families in need can pick up donated pet food.

In China, "downgrade consumption" has become one of the hot topics on social platforms. Pinduoduo, Pingdai, special forces travel, and various discount stores near expiration and Hema's mountain-moving prices are the best examples.

Innovation implications: Despite the positive long-term economic outlook, consumers in global markets will continue to feel the pinch of the cost of living crisis by 2024. By adapting to new frugal consumption concepts, retailers can meet consumers' growing demand for value-for-money products while positioning themselves as solid allies of consumers.

6. Virtual Shopping: A New Experience Connecting Virtual and Physical

Now virtual shoppers can buy real items!

Amazon is launching a new service that will allow customers to buy real items in virtual store environments, including games, mobile apps and augmented reality.

• The service, called Amazon Anywhere, will be launched in May 2023 and will be invitation-only for developers. Ultimately, the service will provide merchants with a new revenue stream, allowing shoppers to connect their Amazon accounts and make purchases without leaving the virtual experience. Brands only need to display products in their experience, and Amazon will take care of ordering, fulfillment, and after-sales service.
• To launch the platform, Amazon partnered with Niantic Labs to promote the latter's augmented reality game Peridot. Gamers can stock up on themed items such as T-shirts and pillows in the game, specify the size they want, and buy them without leaving the game.
• Amazon is expanding its meta-shopping service by adding a virtual 360-degree shopping experience. This time, they created an experience for fans to buy merchandise from Prime Video series and movies. For the first time, the brand created an immersive tour of Godolphin University, a key location in the series "The Fifth Generation", which tells the story of freshmen at the American superhero university. The tour ends at the campus store, where American visitors can buy 150 replicas.

Innovation inspiration: According to VML's "Future Shopper 2023" report, 11% of shoppers worldwide said they actively shop in the metaverse, but this most likely refers to virtual items such as NFTs, game skins, and accessories. Now, Amazon's key innovation is that they provide shoppers with the ability to shop in the virtual space and get real physical goods. By expanding this service to other merchants, Amazon is laying the foundation for a whole new era of meta-virtual shopping.

7. Luxury brand giant flagship stores

Luxury brands are creating giant flagship stores that fully immerse shoppers in the brand’s world.

According to Delphine Vitry, founding partner of Paris-based luxury consultancy MAD, in WWD: “You don’t want Louis Vuitton to have as many stores as Starbucks. You want giant stores.”

Luxury retailers are scrambling for space in the U.S. According to an October 2023 report in The Wall Street Journal, Gucci, Chanel and other luxury retailers are investing heavily in the U.S. real estate market.

Chanel opened its largest store in the United States in May 2023.

• The flagship store in Beverly Hills has four floors and covers an area of ​​30,000 square feet, more than double the area of ​​the previous Beverly Hills store. The top floor features a celebrity VVIP penthouse and a 2,690-square-foot rooftop terrace overlooking the iconic Hollywood landscape.
• “For me, it’s not just a question of return on investment, it’s also a question of image,” said Bruno Pavlovsky, president of Chanel’s fashion division. “We will continue to be active on all digital networks, but ultimately, the experience in the boutique is more important than ever.”

After four years of renovation, Tiffany & Co unveiled its new New York flagship store in April 2023. The new flagship store has 10 floors and covers an area of ​​100,000 square feet, making it one of the largest retail spaces in New York City. The top floor is a mezzanine floor exclusively for VVIP shoppers.

This trend toward giant flagship stores isn't limited to the United States.

• In London, Gucci opened a five-story, 15,000-square-foot store in September 2023.
• Burberry opened its remodeled three-storey New Bond Street flagship store in June 2023, covering nearly 22,000 square feet.
• In March 2022, Dior reopened its flagship store on Avenue Montaigne in Paris, covering an area of ​​more than 107,000 square feet and featuring a restaurant, museum and hotel suites in addition to a retail store.

Luxury brands are working hard to create world-class flagship stores and deliver an all-encompassing experience.

8. New paid membership plan - old tricks with new twists

Paid membership programs are beginning to spread. Although the methods are old-fashioned, they keep users activated and loyal because of various innovative ways of playing and scenarios. A survey conducted by customer loyalty expert Clarus Commerce found that 95% of US retailers with traditional loyalty programs are considering launching paid membership programs. This shows that more and more people are aware that premium membership programs can bring huge benefits to consumers and retailers. Paid membership programs are nothing new, that is, consumers pay regularly in exchange for discounts and exclusive offers. In fact, according to a report by e-commerce data expert Yaguara, 63% of Americans have Amazon Prime accounts. However, paid membership is still a very underused strategy, with less than 5% of online retailers offering this service. However, some DTC brands continue to activate their users with a unique payment system.

• Los Angeles-based wellness brand Liquid IV is one of the latest companies to offer a paid membership in addition to its existing subscription service, betting that flexibility is the biggest selling point for consumers, as they are no longer restricted to a curated selection of items but have more freedom to use discounts on a wider range of products, can shop whenever they want and have access to exclusive items.
• The CarePass program at U.S. pharmacy retailer CVS costs $5 per month but includes $10 in points as a loss-guiding mechanism to build loyalty. Adam Volin, general manager of CarePass, told Retail Touchpoints that members "shop more often and have larger baskets." McKinsey research supports this strategy, showing that members of paid loyalty programs are 60% more likely to spend more on brands.

Another benefit for retailers is the revenue stability that membership fees bring.

• Singular Society, a membership brand owned by H&M, said membership fees "keep the brand alive" and enable it to produce around quality and sustainability.
• “This shift has allowed us to develop and craft products of the highest quality and sell them at price points that would not have been possible traditionally,” Erik Zetterberg, creative director and co-founder of Singular Society, told VML Intelligence. “Our philosophy is to empower people to buy better, thereby helping them buy less.”

Innovation Implications: While paid membership programs are potentially rewarding for both consumers and retailers, they remain a niche product. Since consumers are likely to purchase only a few paid membership cards, now is a good time for retailers to seize this limited opportunity.

9. Happy Retail: An Era of Injecting Fun into Shoppers

As retailers enrich shoppers’ lives through happiness, the joy of shopping increases.

• Ulta Beauty and author Mel Robbins launched the Joy Project in September 2023. The goal of this long-term program is to help people connect more deeply with beauty and have a positive experience. "We knew we could build a movement to help people around the world live more authentic, happier lives," said Michelle Crossan-Matos, Ulta Beauty's chief marketing officer.
• Liberty London’s ongoing ‘Find the Joy Within’ campaign has seen the Regent Street store take over with colourful smiling faces. The collection, which will first launch in early 2023, includes ‘feel-good fashion’ and colourful, mood-boosting jewellery, offering people a dose of joyful colour therapy.
• Ruby Beales, jewelry buyer at Liberty, says: “Wearing jewelry is an act of self-expression and, for me, it’s the perfect way to add some mood-boosting pops of color to your outfit. Think candy shades of enamel, neon beaded bracelets and juicy gemstone combinations. There are no rules: match or stack contrasting colors as you like. That’s the fun of it.”
• This fall, e-commerce retailer Terez opened its first physical store in New York. Upon entering, visitors are immediately impressed by the bright pink walls, whimsical balloon chandeliers, and the brand’s colorful fashion collections. Terez’s mission is to “celebrate the beauty of life.”

Innovation inspiration: Brands inject fun and excitement into shoppers through design, product planning and encouraging customers to find inner joy. This retail trend that focuses on consumer experience has attracted people's attention, making shopping no longer just a simple purchase behavior, but a pleasant experience.

10. AI Fitting: The Era of Virtual Fitting

Advances in technology have transformed virtual fitting from a gimmick into a hyper-realistic experience.

Technology pioneers are developing tools that allow shoppers to try on clothes through virtual avatars that better reflect their own image and even simulate how clothes would drape in real life.

Los Angeles-based Bods is developing computer game-like avatars as a virtual try-on tool.

• The company, whose AI can extract information from photos or key measurements, can then be adjusted by consumers to perfectly fit their body type. The company raised $5.6 million in a seed round in early 2022.
• In November 2023, Bods announced a partnership with French fashion house Balmain to offer visitors “bespoke virtual try-ons” on the Balmain website. Shoppers can dress their own custom avatars with “accurate digital reproductions of Balmain brand logos and catwalk designs.” The digital reproductions of these garments “faithfully reproduce luxurious fabrics and tones, as well as the Balmain ateliers’ expertise in hand-construction, embellishment and tailoring.”
• Simon Cottigny, chief digital officer at Balmain, believes the technology will benefit both the brand and the consumer, saying it will "significantly help our Balmain customers make more confident decisions," thereby increasing conversion rates and ultimately reducing return rates.

Google first launched the virtual clothing try-on feature in June 2023, which shows users what clothes look like on real models of different body shapes and sizes. Through a diffusion-based AI model, Google creates images that can realistically reproduce the drape, wrinkles and creases of clothing. Brands such as Anthropologie, Loft, H&M and Everlane have launched the tool in the United States.

Anthropics Technology, a UK company, has developed an AI-powered virtual try-on service, Zyler, for photographers and retailers. The company says the service can increase conversion rates by 18% and is available on brand websites and on screens in physical stores. John Lewis Rental and Marks & Spencer stores in the UK are using the service.

Innovation inspiration: AI-driven virtual try-ons are becoming more sophisticated, allowing consumers to visually see designs, improve brand conversion rates, and minimize return waste. Technological advances in this area have brought new opportunities and innovations to the retail industry, making it easier for consumers to choose and buy clothes that suit them.

Author: Brand Ape

Source: WeChat public account: Brand Yuanchuang (ID: brand-yuan)