Looking to 2024
Luxury goods brands have been sounding alarm bells over the last few weeks regarding consumer resiliency. The worry is that even the 1% is now pulling back on their shopping sprees. When the biggest spenders become cautious consumers, the entire industry – from luxury down to aspirational brands – becomes concerned.
All this spells a tougher business environment for everyone going into 2024, especially as brands continue to struggle with visibility, coherent and consistent brand messaging, product design and quality, and skyrocketing client acquisition costs. While many business owners tend to pull back on investing in their brand during a tough economy, the opposite is a better strategy; recessions and slowdowns provide opportunities to find new ways to tell an authentic and compelling brand story, consistently engage customers, and drive product innovation.
Looking forward to 2024, here are five trends that will define the business landscape:
Generative AI. Generative AI will be embraced by more companies as they see the benefit of designing product and/or creating custom images and graphics with AI-generated ones. Not only will brands save time and money, but they will also streamline the design process from concept to generating samples or design variations.
Personalization. Brands will continue to find new ways to improve and personalize every touchstone of the customer shopping journey. In-store, this means improved staff training, while online it’s about providing customers with a unique experience in real time based on their browsing and purchasing data. The trick is to personalize the customer journey without being creepy or overwhelming the consumer.
Brand-Building. Performance marketing is expected to take a back seat to brand marketing next year, as consumers continue to seek emotional connection to brands. This means brand-building opportunities and storytelling will be more important than paid ads. And if you are relying on social media to get the word out about your brand, according to Shopify, social media engagement rates for global fashion brands are abysmal:
• Instagram: 0.68%
• Facebook: 0.03%
• Twitter: 0.03%
Brands will need to rethink their marketing strategies and employ tactics that build long-term brand awareness and engage the consumer, like crafting higher quality brand stories, instead of looking for a quick social media hit using an influencer or marketing gimmick.
E-tail vs. Brick-and-Mortar. As much as livestream shopping is having a moment, physical stores are back in a big way, especially for younger clients (be sure to read the story on physical versus e-tail trends in this month’s news roundup). Shopify points out that 22% of online returns happen because the product ordered online looks different in person, which is why many fashion brands are opting to go back into traditional retail. Bottom line: Every brand needs to figure out how to integrate and maximize both channels for business.
Sustainability. We all know that fashion is responsible for about 10 percent of total greenhouse gas emissions. But governments around the world are aiming to change that, as “the era of the fashion industry self-regulating sustainability is drawing to a close,” says Business of Fashion. New rules around the world, including ones passed by the EU and US, will attempt to cut greenhouse gas emissions and waste by mandating everything from textile production to recycling. Though these regulations will predominately affect global brands, hopefully any technologies and processes developed to meet these rules will eventually pass downstream to help smaller brands.
Image courtesy of Kovalov Anatolii / Shutterstock
