Loss Prevention Research Council Weekly Series - Episode 175 - Deloitte Retail Predictions 2024 and Six Questions to Ask Mid-Career

With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan

February 10, 2024

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2024 US Retail Industry Outlook

https://www2.deloitte.com/us/en/pages/consumer-business/articles/retail-distribution-industry-outlook.html

Let me start this week with a new report from Deloitte on the state of the USA industry and the most important trends that they see this year.

First here is the economic outlook for the United States in 2024.

The US economy seems to have avoided a recession even as inflation has dropped. This is good news, especially at a time when geopolitical tensions are rising, growth in key US economic partners is slowing, and there is uncertainty over budget funding.

Consumers have benefitted from rising wages due to a strong labor market and declining inflation. They have also drawn down their pandemic-era savings to fund more purchases. This dip in personal savings, however, will weigh on consumer spending in 2024–2025. In addition, consumers face headwinds from high rents, rising house prices, and repayment of student loan debt.

Two key trends will shape the future business environment: tighter labor markets and higher long-term interest rates. First, slow labor force growth and continued high demand require companies to offer higher wages to lower-skilled workers and to be more imaginative about hiring.

Second, long-term interest rates are unlikely to return to the lows of the late 2010s. The slowing of China’s savings growth, a need for large investments (public or private) to address climate change, and efforts to build supply chain resiliency will likely keep capital demands strong.

Deloitte’s baseline forecast anticipates continued growth in consumer spending at a rate slightly below GDP growth due to falling inflation, low unemployment, and increasing productivity growth. The aftermath of the pandemic led to a shift in consumer spending patterns, with the dollar value of durable goods increasing 43% vs. a 24% rise in spending on services since Q4 2019. This is unlikely to continue, with the forecast suggesting a slower growth trajectory for durables spending relative to consumption and income over the next five years.

Interesting are the technologies that Deloitte believes are important in 2024. These include two technologies that enhance customer experiences.

• AI powered smart carts – these include computer vision and personalize shopping features and the benefits include instant checkout, real time analysis of carts and shelves
• Interactive AI smart displays – This features displays that recognize customer facial expressions to tailor content. The benefits include personalized customer interaction based on mood detection.

Four other technologies stand out for improving operations and management

• Intelligent tags – These provide continuous item level insights with real time tracking of product location, availability and performance.
• Optimized pricing and store design – This features systems that analyze and store data on instore behaviors, and external factors such as the weather.
• AI powered analytics – These include systems that analyze crucial data to highlight important KPIs. Through this data, tasks can be streamlined and prioritized ensuring product availability, reduce online returns, lower wait time, and improve cleanliness.
• Shrink management – These systems analyze customer behavior and emotions for security insights to deter theft and improve store security.

Retailers, restaurants look to grow, leverage technology in 2024

https://chainstoreage.com/retailers-restaurants-look-grow-leverage-technology-2024

Switching topics let me to Chain Store Age to explain how retailers and restaurants look to grow and leverage technology in 2024.

As they state, growth is top of mind for retailers with 61% saying they’re eager to expand in the coming year, though they are split on whether to prioritize brick-and-mortar (52%) or online offerings (48%). The report surveyed thousands of business owners and consumers in the U.S., Canada, the U.K. and Australia.

More than four-in-10 (42%) retailers surveyed said they planned to stay competitive this year by improving customer relationships through faster and easier communication channels. Thirty-nine percent said they planned on providing more payment options such as buy now, pay later, and 38% said they planned to offer more in-store events and shopping experiences, strengthen loyalty through a rewards program, and reach customers through a marketing program.

Over half (56%) of retailers said they would be taking a closer look at their marketing tactics for Gen Z in 2024 as the younger generations’ purchasing power continues to grow. This marks an increase from just 43% of retailers who focused on marketing to Gen Z in 2022.

Technology will play a key role for both retail and restaurants in 2024, with 100% of retail and restaurant owners surveyed stating that automation and technology have improved their businesses. 

Nearly half (45%) of retailers have seen greater employee retention and increased profits as a result of their automation investments, while 67% of restaurant owners say that automation tools have directly benefited customers, either through customer experience or communication.

Customers say they support businesses continuing to explore ways to automate, with 76% of restaurant customers and 67% of retail customers preferring that businesses use automation over live staff in at least one area, especially for tasks like making reservations or checking product inventory.

6 Questions to Ask Midpoint in your Career

https://hbr.org/2024/02/6-questions-to-ask-at-the-midpoint-of-your-career

Let me end this week by going to Harvard Business Review and telling you the six questions you need to ask at the midpoint of your career.

1. What will I regret not having done or learned 10 years from now?
2. How do I tap into my purpose to determine if I am in meaningful career?
3. What mastery or gift have I developed that I can offer to the world?
4. What do I want my days to look like?
5. What trade-offs am I willing to make or more importantly no longer willing to make?
6. What is getting better about my life?

Good questions to ask and I will confess I asked them too late. Some of this is reflected in my new book “Unleash Your Brand” where I reflect on the value of a personal brand and why it is better to start early to define clearly the value of you as an individual to the world.