Next-Gen Online Storefront is one of Euromonitor International’s five new Trending Topics for the year ahead. We have identified these topics as the most crucial cross-industry trends that businesses need to prioritise to remain competitive.
Although e-commerce is predicted to account for 75% of growth in retail over 2024-2029, profitability remains a hurdle. Retailers and brands must sharpen their online strategies to stay relevant amid industry, shopper and tech developments to capitalise on the long-term channel shift and drive sustainable e-commerce growth. The savviest are embracing new places of discovery, tools for engagement and ways to serve shoppers. While these changes have been under way for over a decade, the online experience is reaching a tipping point, as tech advances usher in a next-gen online storefront.
The expanding influence of digital across the shopper journey is putting pressure on companies to elevate the online experience. In 2024, GenAI emerged as a technology poised to play a key role, because of its ability to deliver exceptional experiences at scale. For example, it can be woven into the core of a brand’s app to create individually tailored landing pages, product descriptions and illustrations. Half of industry professionals say they plan to invest in GenAI in the next five years, according to Euromonitor International’s Voice of the Industry: Digital Survey, fielded in September 2024.
AI agents have the potential to take a leading role in customer service
In the first iteration, AI became a real-life partner to human agents by providing faster and more accurate responses. Gen AI can go a step further by suggesting responses, summarising past interactions and flagging follow-ups. Now, agentic AI can trigger workflows and resolve customer issues without human involvement. Although still in the early stages of development, it is expected that these technologies will lead to more humanlike bot experiences. Given the ability of AI agents to independently choose the best actions to achieve goals set by humans, this next stage of development is likely to be transformative.
In late 2024, German apparel specialist Zalando made its AI-powered fashion assistant available in 25 countries. Zalando’s AI assistant, which is powered by its own models, as well as OpenAI’s large language models, allows logged-in customers to receive personalised fashion advice in their chosen language. The GenAI-enabled tool is designed to guide customers with highly intuitive, personalised prompts, as opposed to traditional search that works by memorising content across the web.
Continued technological advances will require more adaptive go-to-market strategies
Go-to-market strategies have become more complex, as the internet opened more places to discover products, like marketplaces, DTC sites and social media. Nestlé, which has one of the highest online penetration rates, has built a category-centric e-commerce strategy, marrying the best channel for each brand. In the US, for example, data show that the leading retailers across brands include pet specialist Chewy for Purina, DTC for Nespresso and grocer Walmart for Stouffer’s.
More places of discovery means that retailers and brands must deploy more complex strategies to reach their audience. Beyond identifying the right channel, they must factor in how new technologies will change how consumers start their search and how they end their journey with a purchase.
Retailers and brands must ensure their inventory, pricing and product information is optimised for decision-making AI algorithms. In time, AI agents also could lead to more bot purchases, impacting products that require less consideration, such as Nestlé’s popular pet foods. As the future of agentic AI personal shopping assistants takes shape, they must develop their strategy – namely, how they will view these AI assistants, and should they actively invest.
Learn more about our report, Next-Gen Online Storefront: A Shopping Journey for One, to uncover how to generate sustainable online revenue through stronger engagement tactics.
Discover Euromonitor’s other Trending Topics to help you strategise for the year ahead.
