It is but natural to look back, review and chart fresh plans as the year comes to a close and another one peeps its head from the horizon. For the retail industry stakeholders too, it is time again to take stock of things and plan ahead, based on market and consumer trends. Retail4Growth reached out to some of them to get their take as part of our new series ‘2024: What’s In Store’. In the first conversation as part of this series, Shyam Sunder K, Founder, Principal Architect & MD - 4Dimensions Retail Design, shares his recap of 2023 and what he expects from 2024. 

A good year of growth   

“2023 has been excellent, even better than last year,” says Shyam, looking back at the year that is slowly chugging to a halt. “In fact I’d say the year has been good for the whole retail design community, reflecting the overall market trend,” he adds.  

 Value Retail, premium segments growing well 

Elaborating further on specific trends discerned in the market, he adds, “Post Covid there has been one big transformation and that is the growth seen in both the value retail and premium/luxury segments. The value format has in fact seen growth of about 30%. This trend is similar to what happened in Europe about 5-6 years back.” He says further that the mid-premium segment, on the other hand, has been hit quite badly, even seeing some de-growth. These market trends, as he points out, are a reflection of the overall changes in the economy - rising disposal income levels across segments, which is driving higher consumption. As Shyam says, “A big chunk of the upper middle-class segment is moving towards premium/luxury category, while a large percentage of middle and lower middle class is moving towards value retail segment, and this is driving growth for both the value and the premium segments.” 

Interestingly, these changes are also seen in the way these brands spend on their store expansion and ambience. “While corporate retailers have been more cautious in their spends, regional and value retailers are spending more on their store ambience to ensure that their customers feel they are getting value products in a scaled up ambience,” says Shyam.  Indeed as he points out, enhanced store ambience has a psychological effect on the customer, which results in better sales. 

Tier 2-3 markets continue to hold sway 

The other noteworthy trend is the continued focus of many retail brands on tier 2-3 markets.  

"In terms of the percentage wise ratio of investments, I'd say it is 70:30 with 70 representing the skew towards tier 2-3 markets and this tilt will continue,” says Shyam

2024: Optimism with some caution 

Well, with these new dynamics at play, can we hope for an even better year? “We are definitely very optimistic about 2024, but with the Lok Sabha elections coming up next year, the optimism is also tempered with some amount of caution. But if the election results match the expectations of the majority of people, then we can definitely see more investments and there are indications that brands are also optimistic. So we can in fact expect greater expansion, rollouts and new formats,” says Shyam and adds, “Essentially there will be growing importance on offering a newer experience because the customer is also looking at something new, not just new products, but also a new experience in the store.”  

Market trends reflecting in the retail solutions segment

So any new expectations from retail solution and service providers as the new year approaches with new promises, after all they are an integral part of the store experience eco-system? Well, Shyam feels the primary market trends will reflect in the retail solutions space too, with demand matching the growth seen in value and premium segments. “However, innovations will continue to drive the industry, because of the growing thrust on store experience and presentation,” he adds, laying emphasis on innovation that can raise the experiential bar. 

Growing demand for premium lighting products 

Shyam also feels retailers are increasingly seeing more value in premium lighting solutions, especially for certain areas in the store space like windows. Thus the demand for premium and innovative lighting products that add tangible value to the business will see a marked growth.

Purposeful use of  digital assets

With experiential technologies and digital screens making deeper inroads into the store space, one would expect more investments in digital assets in the coming year. Shyam agrees though he feels it will have to be purpose led. “Purposeful use of digital screens will definitely go up, though retailers will no longer use these just for the sake of using them. But digital assets that meet the business objectives and add impact to the overall customer journey will definitely gain traction. In fact, the growing stress on in-store communication is driving the use of digital screens in a big way,” says Shyam and adds, “With ecological conservation and the question of carbon footprint playing a major role, and also given the cost factors associated with printing and changing store communications on a regular basis, retailers are increasingly seeing the value of digital screens.” 

Well, the expectations cart certainly seems full for 2024. What’s your take? Mail your views to editor@vjmediaworks.com