GenAI could help boost the efficiency of customer service teams and give shoppers access to fast, personalized, 24/7 support. To make the most of the technology, retailers and brands need to understand the key use cases in a customer service setting—and stay mindful of the risks.

GenAI search could have a transformative impact on the shopping journey. To satisfy customers and stay competitive, retailers should focus on two essential innovations.

Dollar store consumers, especially lower-income households, are facing financial difficulties, relying on credit cards to cover necessities. Retailers like Dollar General and Dollar Tree are focusing on pricing and promotions to keep customers shopping, but there has been a decline in discretionary spending from middle- and high-income consumers, who may be turning to mass retailers like Walmart.

A truncated holiday spending period with fewer days between Thanksgiving and Christmas and the election will throw a curveball to retail sales this season, our analyst Sky Canaves said on an episode of the “Behind the Numbers: Reimagining Retail” podcast. In-store retail will see healthy growth, consumers will continue holding back on splurges, and mobile will uplift overall ecommerce. Here are three trends we’re predicting for the upcoming holiday season.

Gen Z’s complicated path to purchase leans heavily on digital platforms and channels. But offline resources still play a key role.

Gen Z is the critical force in digital buyer growth. Nearly 90% of the 14.7 million new digital buyers in the US between 2024 and 2028 will come from Gen Z. The pace of Gen Z digital buyer growth will be fastest between 2024 and 2026, before tapering off significantly, making the near-term period a critical era for brands and retailers to capture Gen Z loyalty.

It plans to launch a dedicated A2A service next year with more protections and controls as adoption of the payment method is much further abroad than in the US

Gen Z shoppers embrace Temu, Shein, and TikTok Shop: 1 in 4 makes a purchase at a Chinese online marketplace at least once a week, as their array of cheap, trendy goods proves impossible for the price-sensitive cohort to resist.

A strong digital presence drove Nordstrom Rack's Q2 growth, while Crocs hopes to revitalize its HEYDUDE brand by focusing on a younger, female audience. Holliseter is leveraging back-to-school promotions and targeted marketing initiatives to reintroduce the brand to younger consumers.

Ikea’s business model evolves: In addition to experimenting with new store formats in new locations and bolstering its online presence, the furniture giant tests a peer-to-peer secondhand marketplace.

The close tie between Amazon's ecommerce and advertising businesses presents both opportunities and challenges. "When ecommerce sales are growing, retail media dollars are going to go up,” our analyst Jeremy Goldman said on a recent episode of the "Behind the Numbers" podcast. “But when ecommerce dollars aren’t growing that much, it's harder to get the retail media dollars to grow because they’re so intertwined."

Walmart's ad business drives 26% revenue growth: Walmart Connect leads with 30% increase, outpacing Amazon's ad unit.

Gauging the influence of digital on the shopper's journey.

Retailers with ties to China, like Temu and TikTok Shop, have gained popularity in the US. Now, a wave of Japanese-based retailers and retail concepts has come to the US, signaling a potential shift for the retail landscape.

US digital commerce platforms will process $471.37 billion of their own payments by 2026. As a result, they’ll enjoy stronger customer relationships, added revenues, and cross-sell synergy.

“Amazon is in such a unique position to give us an idea of broader consumer sentiment because of their scale and reach,” our analyst Sarah Marzano said on an episode of the “Behind the Numbers: Reimagining Retail” podcast. This year, nearly three-quarters (72.7%) of all US households will be Prime members, according to our July 2024 forecast. “If we examine the behaviors that emerge from Prime Day, we get a good sense of how consumers are feeling.”

Inflation continues to impact spending in Q2, with 84% of consumers saying inflation had an impact on their spending, a 10% increase over Q1, per Jungle Scout’s research. Meanwhile, Amazon product categories recorded sales increases and social media shopping is on the rise.

Retail media ad spending will be increasingly responsible for digital advertising’s double-digit growth. By 2028, the powerhouse channel will grow to represent nearly 1 in every 3 ad dollars spent.

During Prime Day 2024, US shoppers will spend nearly $14 billion—a 5.9% increase over last year. But the dynamics of the shopping event are shifting as competitors chip away at Amazon’s market share.

Mercado Libre is beating Amazon at its own game in Latin America: The former is expected to represent more than half of all retail media ad spending in the region, while the latter continues to lose share to local players in Brazil and Mexico.