The Drum Awards Festival - Extended Deadline

-d -h -min -sec

Digital Transformation Media Ecommerce

These 6 trends will define retail and e-commerce in 2024


By Kendra Barnett, Associate Editor

November 14, 2023 | 15 min read

From new AI applications to a forthcoming clash between retail media networks and larger media players, the retail space is poised to see major disruption in 2024. Experts share their predictions as part of The Drum’s latest Deep Dive, The New Retail Landscape.

Hands shopping collage

Experts say 2024 will be the year of AI-retail integration / Adobe Stock

This year, consumers fretted about economic uncertainty, leading to a slowdown in sales growth. In the second quarter, total retail sales growth dipped to under 1% year-over-year – a rate so low that, aside from Q2 of 2020, has not been seen since 2009.

With what dollars consumers have opted to spend in 2023, the trend of hybrid shopping has continued, with nearly 60% of consumers across the globe preferring online to in-store shopping, according to GWI research.

Meanwhile, the world has continued to become more shoppable. Interactive ad formats such as QR codes have infiltrated streaming and premium video, while social giants such as TikTok are expanding their shopping tools, making it easier than ever for brands to drive conversions at speed.

At the same time, retailers have invested more in their own proprietary media networks, selling to brands directly, enticing them with the promise of first-party data as cookie deprecation looms on the horizon.

All the while, chatter about AI has reached a fever pitch.

With the new year just around the corner, what trends will shape the world of retail and e-commerce in 2024? Here’s what the experts are saying.

1. AI will find new applications in retail and e-commerce

While generative AI has been the talk of the town in 2023, new applications of machine learning and artificial intelligence will be a driving force in 2024, according to industry leaders.

“Right from discovery to the media supply chain, AI is going to be … one of the bigger drivers for retailers and brands for cost savings and optimizations,” says David MacDonald, managing director of Publicis Commerce, the commerce experience arm of the French advertising giant. “We’re going to be using AI to increase profitability and efficiencies [in many new ways]. AI is not just a thing; it’s everything, almost.”

As an example, MacDonald points to Chinese fast fashion giant Shein, which is employing AI to help it optimize product development. “It’ll put a product [on its site] before it has even created the product – and then, based on how people interact with it and buy it, adapt its product lifecycle.”

Brands will also use AI to ensure they’re reaching specific audiences in the right places – and adapting content dynamically across channels and touchpoints in the retail and e-commerce media ecosystem, says MacDonald.

Predictive machine learning tools will gain greater investment from advertisers that want to determine key signals around loyalty and buying habits. “In the past, it used to be reactionary,” says MacDonald. “Now, we’re working with retailers to ask, ‘How do we figure out what the signals are in the data?’ And we’ll use that to determine where we may run into loyalty risk.”

Agencies, including Publicis Commerce, however, could also face increasing scrutiny thanks to the proliferation of AI in retail and e-commerce. As Rachel Tipograph, founder and chief executive of e-commerce platform MikMak, explains, as AI improves operational and cost efficiencies for brands, “it will also continue to raise questions around how work is being done and how a provider charges for the work.” She predicts that brands will soon demand greater transparency from agencies about how they use AI – for example, was AI used in the ideation and production of creativity, or was it the product of human ingenuity alone? And they’ll want to re-evaluate cost structures to reflect agency practices.

Powered by AI

Explore frequently asked questions

2. The physical and digital worlds of retail will blend in new, unexpected ways

Experts estimate that the fusion of digital and physical will accelerate in 2024.

“Retailers [are looking to] provide more ways to reach shoppers by blending physical and digital elements of the shopping journey,” says Sarah Travis, a senior vice-president at Target and the president of the retailer’s media network, Roundel. “With guests increasingly using apps while shopping, embracing digital media in physical spaces to drive engagement and loyalty will be more important than ever before.”

It’s a trend with a lot of momentum behind it already. In the last two years or so, connected ‘smart’ screens with media capabilities such as those operated by Cooler Screens have taken brick-and-mortar stores by storm, with retailers including Kroger, Walgreens and Chevron installing the technology to sell ads and entice in-store shoppers.

But not everyone is betting big on the channel. Jeriad Zoghby, chief commerce strategy officer at IPG, for his part, believes the industry will soon shift away from digitized in-store displays toward more personalized digital-physical experiences. “There’s a lot of focus on retail media going into the physical store and there’s been a big focus on physical digital display in stores,” he says. “But by the time we get to about mid-next year, everyone’s going to realize that it’s not the right investment. Having digitized in-store displays is not actually new, nor is it really programmatic to the level that people expect from a personalized perspective. Also, the cost is enormous – Walmart just announced $9bn to refresh its stores.”

Instead, Zoghby predicts that retailers will build “engaging app experiences that can turn any physical store into a curated experience for the individual.” He adds: “The digital display in the middle of the aisle is going to look like garbage within two years from people banging into it and it’s going to look dated. And I can’t actually personalize it. But the idea of being able to walk through a grocery store and say, ‘I’m on a Whole30 diet and I’m gluten-free – show me what’s on the shelf that I can eat,’ is something that everybody wants. It’s also a perfect opportunity for advertisers to say, ‘I’ll give you promotions for products that really matter to you and are more valuable to me [when it comes to selling].’ It’s a much more targeted, programmatic [approach] if the investment goes into the apps and it’s also smarter from a cost perspective.”

In Zoghby’s estimation, retailers will soon realize this potential and will repurpose and augment much of the tech they’ve built out to support hybrid shopping, delivery and curbside pickup to create new “digital overlay” experiences.

3. CTV and streaming will take center stage

In 2023, streaming surpassed cable in terms of viewership for the first time ever – streaming now accounts for 38% of all TV viewing, compared with cable’s 31%, according to recent Nielsen data. In the coming year, connected television (CTV) and online streaming will continue to eat up a greater share of the market. And with this shift will come a change in media habits, experts say.

“Media planning practices will finally catch up to consumers in 2024,” says Cara Pratt, senior vice-president at Kroger Precision Marketing at 84.51°, the retailer’s media network. “We’re close to the tipping point where addressable media will be the first step brands take in planning. Blunt-force, untargeted media will be used secondarily to fill in gaps.”

Target’s Travis agrees that CTV will offer unique value both for advertisers and consumers in the coming year. “CTV ads allow guests to quickly add products directly to their shopping carts, offering opportunities to deepen interest and generate commerce.”

For example, Travis explains, shoppers can now scan a QR code in a Target ad they see on their TV screen at home and seamlessly add products directly to their card for in-store pickup. The broader trend, in Travis’ eyes, is leaning into consumers’ demand for greater convenience in all aspects of their lives.

4. Margin compression will continue to prove challenging for retailers and brands alike

Consumer demand for convenience has skyrocketed – accelerated by the Covid-19 pandemic, which necessitated and normalized hybrid shopping. As IPG’s Zoghby puts it: “Now, I can walk through the store, I can do curbside, Instacart can bring an order to my home, Walmart can ship it to my house.”

However, the proliferation of shopping and delivery avenues has wrought new challenges both for retailers and consumer goods brands. “Three of those options are the same [as shopping at the] local Walmart, so Walmart’s not selling more [product] – the market is the same,” says Zoghby. “But as a brand, I’ve now got to create more content and put the technologies into syndicated because every retailer has different rules. And as a retailer, I’ve got to put in technologies to handle things such as curbside. So what’s happened is a lot of margin pressure.”

It’s a phenomenon that’s only going to be exacerbated in the new year, creating new hurdles for all players in the ecosystem.

“Brand manufacturers’ margins compression will continue into 2024,” says MikMak’s Tipograph. “As a result, brands will need to effectively play with pricing elasticity, get better at marrying consumer demand to where inventory is available and be more selective with their advertising dollars to ensure their investments drive profitable growth.”

The total value of online shopping orders has decreased over the past year, according to MikMak’s research, “indicating an urgent need for brands to be more strategic to capture consumers who will likely continue spending more cautiously in the year ahead,” says Tipograph.

5. Simplified buying and selling will pave the way for measurement standardization

Across the retail media ecosystem, measurement standardization has been a hot-button issue for some time. The proliferation of retail media networks has only worsened the issue – today, 62% of retail media buyers see a lack of measurement standards as a top issue inhibiting continued growth, according to recent data from the Interactive Advertising Bureau (IAB).

In September, the IAB teamed up with the Media Rating Council to release a new set of proposed retail media measurement standardization guidelines, which could help solve cross-network buying and performance measurement challenges.

In any case, experts say 2024 will be a critical year for cross-network measurement. “With growing calls for standardization in the retail media industry, operational transparency will be critical in the year ahead,” predicts Target’s Travis. “Brands will likely advocate for more open, flexible and streamlined ways to buy media with retail media network-created tools – creating uniformity for brands of all sizes when advertising via retailers.”

However, some believe that the complexity of the buying process itself will need to be resolved before the industry can make headway on standardized measurement.

“While standardization of ad sizes, targeting parameters and measurement is important, it’s being pushed too early in the development of retail media,” says Greg Stevens, president of Turbyne, a retail media supply-side platform. “Fundamentally, the buying and selling process is too complicated, partially evidenced by brands typically buying media from only five to six retailers on average. Centralization of the buying and selling process in new retail media management platforms … is a needed innovation that provides the foundation for standardization.”

Suggested newsletters for you

Daily Briefing


Catch up on the most important stories of the day, curated by our editorial team.

Ads of the Week


See the best ads of the last week - all in one place.

The Drum Insider

Once a month

Learn how to pitch to our editors and get published on The Drum.

6. Retail media networks will proliferate – but may be threatened by bigger media ecosystems

In 2024, retail media network proliferation will continue, especially amid smaller players, predict experts. As Turbyne’s Stevens puts it: “A digital ad network of small and mid-sized retailers will launch in 2024. Retailers not in the top six [which includes Walmart, Target and Kroger] lack the national scale to attract top advertising dollars. Similar to how programmatic media developed, retail media ad networks will arise to make the buying of smaller retailers worth the time of brands and allow the whole to exceed the sum of the parts.”

Similarly, it’s likely retail media networks will increasingly move beyond grocery and burgeon among specialized retailers, including insurance, automotive and B2B companies, says Publicis Commerce’s MacDonald. “From a brand’s perspective, this is great because it’s like, ‘Now I have more places to go to communicate with customers,’” he explains.

However, the proliferation of new media networks across the retail space doesn’t guarantee success. For one, advertisers don’t necessarily have more dollars to spend – as such, they’ll be forced to triage where their spend will be best placed. MacDonald predicts that AI could help to solve this problem with customized recommendations on where to spend media dollars.

However, a larger threat to retailer-owned media networks could be looming: integrated media ecosystems. IPG’s Zoghby suggests that many media buyers are asleep at the wheel when it comes to the power of omnichannel ecosystems such as Amazon’s – and that the industry will soon witness an awakening.

“Amazon is not a retail media network. It is effectively a modern network TV. It has the size of an audience of an NBC, but it has live and streaming TV, plus music, gaming, social, podcasts, as well as commerce,” he says. “I don’t think everyone has fully grasped [the potential]. Every time we talk about the spectrum that Amazon represents, there’s an ’a-ha’ moment, especially for brands. They’ll say, ‘Amazon is 10% of my business as a retailer.’ Then we go, ‘Yeah, but it has TV, gaming, social, podcasts, music,’ and they go, ‘Oh, I hadn’t thought about that.’ It’s theoretically single sign-on, so you have a connected media ecosystem, with first-party data, that also has commerce baked into it.”

Amazon is the obvious example, Zoghby says, but the Seattle-based e-commerce giant won’t be the only heavyweight in the ring. He says IPG is also eyeing Walmart, which could be poised for a reinvention of its physical footprint, as well as Apple – a potential newcomer on the virtual side.

Ultimately, Zoghby predicts, these new ecosystems could become the dominant force not only in retail media but in digital and traditional media more broadly. “[Instead of] thinking, ‘How do we bring creative into an advertising channel?’ we’re thinking about bringing creative into a basically uncharted territory that hasn’t existed before.”

Read more from The Drum’s latest Deep Dive, The New Retail Landscape.

Digital Transformation Media Ecommerce

More from Digital Transformation

View all


Industry insights

View all
Add your own content +