Commerce Trends That Will Impact 2024 & Beyond

Executive Summary

Heading into 2024 there are four key trends that eCommerce executives must be aware of—fulfillment challenges surrounding shipping, customer experience changes, how to best control your commerce margins, and new technologies that continue to make an impact. These four trends can make or break entire organizations, and Logicbroker’s President, Mark Detelich; VP of Product Management, Chip Sockwell; and VP of Digital Commerce, Steve Norris; walk you through exactly how each trend can and will impact your business. 

Table of Contents

2024 Trends & Discussions

2024 is upon us, and it’s time to dive into coming trends that will have a significant impact on commerce in the new year. In 2023, we saw new forms of technology, supply chain slowdowns, and skyrocketing interest rates make waves throughout the industry. We put it to our team of experts at Logicbroker to discuss the various trends they predict will dominate the 2024 landscape. 

Let’s kick off with probably the most anticipated 2024 trend: fulfillment costs. 

 

A Year of Fulfillment Challenges & Successes

Among the myriad of challenges that await, the ongoing surge in shipping costs looms large, casting a shadow on the most traditional aspects of online retail. This not only affects the bottom line of businesses but also reshapes the way consumers perceive the world around them as rising shipping costs start to outweigh their desire for new products. 

According to Freightos’ international shipping data, overseas shipping has increased as much as 11% in 2023. With supply chain disruptions still a factor in everyday commerce transactions, the increase in the cost of shipping is set to further impact global eCommerce. As 90% of goods are transported overseas during their commercial lifetime, what can organizations do to combat these costs? In essence… partner up/embrace strategic partnerships. 

Reimagining Partnerships for Fulfillment

In the face of escalating shipping costs, businesses are compelled to explore innovative solutions to remain agile and responsive to market demands. One strategic avenue is the exploration of partnerships with retail entities for fulfillment services. By outsourcing logistics to established retail partners, brands and suppliers can not only mitigate the financial strain of shipping but also tap into an existing network for enhanced efficiency.

Utilizing a close-knit partnership network, ideally built upon a secure API- and Cloud-based platform, also dramatically influences the retailer’s bottom line. Brands enjoying the use of a retailer’s distribution network enjoy reduced logistical costs, but retailers partnering with these brands enjoy a rapidly expanded assortment that can help boost customer expectations and brand loyalty by providing goods and services beyond their competition. 

Let’s say a consumer is looking for a unique product that only the best brands provide. Being an exclusive retailer that services that brand in-store and online can boost your brand recognition tenfold. And, as a trusted brand partner, your organization enjoys the benefits of new product launches, increased social media traffic, and much more. 

So, What’s the First Step? 

One approach gaining traction is the utilization of a dealer network—the practice of optimizing relationships between authorized dealers and trusted brands—to create a seamless process where customers buy online, products are delivered to the nearest store, and setup of the product is performed on-site. This not only reduces shipping costs but also capitalizes on the physical presence of retail stores to enhance customer experiences.

Consumers are far more likely to shop with organizations they trust. Becoming a trusted dealer of key target brands positions retailers for increased traffic and sales. For online stores, giving consumers a physical location to bring products for service, repairs, returns, and more can boost shopping confidence. 

There are other like-minded product add-ons as well. Things like Buy Online, Pick Up In Store (BOPIS) is a rapidly expanding practice that benefits numerous parties. BOPIS can boost a retailer’s own business, allowing consumers to take advantage of whatever procurement model they’d like, but it also can benefit those looking to cut down on shipping. Offering BOPIS deals ensures that owned inventory is moving steadily instead of relying solely on your multi-vendor model. 

The Key Takeaway

The key takeaway for this vital 2024 trend is to adapt. If your shipping costs are becoming prohibitive for doing business, explore unique and innovative fulfillment strategies to maximize your program. 

“Success in commerce hinges on more than just products; it’s about crafting a dynamic strategy that seamlessly adapts to evolving supply chain and market trends,” Logicbroker VP of Digital Commerce, Steve Norris said. “eCommerce success relies on evolving and adapting fulfillment models. When your owned inventory and dropshipping are working side by side and in conjunction with your supply network, you can easily adapt to all market trends.”
 

Understanding Your Customer & Making the Right Choices

Data is everything. Data decides what we do with vendors, retailers, brands, consumers, warehouses, and fulfillment strategies… nothing is complete without a good dataset. In the wake of Google’s third-party cookie restrictions, data capture will continue to impact 2024 and beyond. 

The data journey begins with acknowledging that consumer needs often extend beyond the offerings initially perceived as the target market. Products that customers seek may surprise even the most astute businesses, making it crucial to delve deeper into the intricate web of customer data.

Capturing Data Isn’t Enough

The advent of personalization engines empowered businesses to capture nuanced customer insights. However, this wealth of data remains underutilized without a skilled team capable of translating these insights into meaningful changes. Personalization engines can help hone in on your target market, and make consumers feel more loyal to your organization, but they don’t provide detailed reasons for why the consumer is behaving as they do. 

Having a proficient team or partner that comprehends the nuances of data and can implement strategic changes is imperative. Without this bridge between data and action, the potential of personalization engines remains largely untapped. The first step any organization should take is ensuring their tech partner can harness, understand, and help your organization act upon all data captured. 

Whether that is through detailed scorecards, vendor performance updates, or even consumer data trends, understanding what data means is more important than harvesting it in the first place. 

So, What is the Trend in 2024? Expansion

As brands lost out on first-party data capture, it became more important than ever to start a unique fulfillment model that could accurately help them capitalize on what their consumers wanted. Gone are the days when mass market brands only supply their products through traditional retailers and welcomed are the more modern times when Traeger, Whirlpool, Samsung, and more are opting to build their own fulfillment network and dropship program that helps them provide products directly to consumers. 

To stay ahead, you have to keep on top of modern fulfillment strategies. But this trend doesn’t just impact the brands who lost out on first-party data, it also dramatically impacts retailers and suppliers looking to work with those brands. 

Retailers who used to enjoy unlimited access to major brands’ products now have a unique opportunity to expand their partnerships and look at ways to better both the brands’ and their own customer experience. Whether that’s through providing unique pickup/service options or through various co-sell opportunities for similar products that consumers would need. 

For suppliers and manufacturers, as brands open up additional fulfillment channels more opportunities arise for co-sell agreements. Brands opening dropship channels and online stores need additional suppliers to fill their aisles and sell targeted add-ons. Suppliers who can easily adapt to changing trends are at the forefront of demand. 

“Unlocking the full potential of harnessed consumer data is not just a strategic advantage; it’s the key to transforming insights into actions, fueling innovation, and driving unprecedented growth,” said Logicbroker President, Mark Detelich. “In the data-driven era, capitalizing on consumer data isn’t just a choice—it’s the imperative that propels businesses to not only increase sales but to unlock untapped revenue opportunities that lie at the intersection of understanding and engagement.”
 

Margin Control & ROI

Commerce, in general, is about margin control and managing your return on investments. But in 2024 we are looking at an unprecedented rise in commercial real estate, something, especially after COVID-19, that could shake up the entire industry for years to come. Warehousing costs, in particular, have witnessed a staggering surge over the last six to twelve months, prompting a critical need for strategic reevaluation of how your products are moving. 

As the costs associated with carrying owned inventory skyrocket, companies should be exploring innovative solutions, with dropshipping emerging as a viable alternative to carrying products in warehouses that have lost their economic value. Owned inventory as a fulfillment model, while it does carry the highest potential ROI and the largest margins, is also the most risk-intensive venture a business can take. 

Even ignoring warehouse space for a moment, the cost of pre-buying products that you hope your target customers need is immense. Businesses can be left with bad, or immovable, stock just several months after purchase, and sometimes even blowout sales can’t get an unwanted product out the door. Many businesses are finding refuge in dropshipping. Companies are increasingly embracing dropshipping as a more agile and cost-effective solution. This is because dropshipping provides a vital lifeline—testing.

Test New Products & Control Your Margins with Dropshipping

Overlooked or not, the ability to test a product’s appeal in your target demographic or on your website is important. Testing grants you the opportunity to measure its success versus the cost-to-carry and its success versus similar products that you already store in your warehouse. Dropshipping is the key to these tests. When products are moved from a supplier directly to a retailer’s consumer, the retailer doesn’t have to rely on their own warehouse space or commercial real estate costs. Once a product performs well, with the proper visibility tools in place by your tech partner, a retailer can easily shift that product into its owned inventory program and increase their ROI and margins from the lower, but more risk-averse, dropshipping model. 

But margin control doesn’t exclusively have to be done through a dropship intermediary. You can also utilize this methodology with a fully functioning marketplace program that relies on vendors supplying and fulfilling their own orders. The margins are fixed, and if ever you want to utilize your own inventory to maximize value, you can easily shift products from one vendor to your own supply. 

These benefits are why organizations like Walgreens have made the shift to an advanced, modern dropship program through Logicbroker. Walgreens was able to onboard their entire commerce program into the Logicbroker platform in under six weeks, granting them an almost immediate ability to start testing new products and judge what products they should bring into their storefronts and owned inventory models. 

“I don’t want to fill my warehouse with stuff that’s not selling,” Norris said. “Ideally, what I have in the warehouse are my fastest-selling products or products with supply chain issues that you’re buying during periods of limited supply. With warehouse space limited, only organizations embracing a blended solution between their dropship and owned inventory models can better maximize margins and control their ROI.” 
 

New Technologies Influencing the Market

Technology is everywhere, and new technology influences the market in more ways than can be discussed in this one article. However, there really is one big “black box” of technology worth discussing in 2024—artificial intelligence. AI remains the most influential piece of technology in the market today and, likely, in the foreseeable future for one simple fact; we just really don’t know what it can do yet. 

“AI is the obvious new technology to discuss,” said Logicbroker VP of Product Development, Chip Sockwell. “We’ve been making great strides in data classification. AI, for example, is quite good at looking at a description and finding the best matching category. It’s also good at looking at tabular or semi-structured data and finding the right fit in a different format. After onboarding 1000’s of suppliers over the years we’ve noticed these two areas are hotspots for costly mistakes. We think this experience combined with AI will dramatically accelerate your speed-to-market and impact your bottom line.”

AI Is All About Speed

Product content is a hurdle for many organizations. For retailers working closely with suppliers to onboard new SKUs into their ecosystem, there is often a waiting period of weeks or even months to get accurate and detailed product data that is worth sharing on the retailer’s site. This slowdown dramatically affects a retailer’s go-to-market strategy and speed-to-market capabilities. If there are no products to show on site, obviously sales targets can’t be reached. 

AI has the ability, especially generative-focused AI, to speed up the review and onboarding process to the point of automated product roadmaps and offerings. If your supplier doesn’t have a detailed product catalog on hand, a future AI program could have the capability to quickly develop new content to match products available in warehouse or pull from the internet the information needed to quickly list available products. 

And an AI’s capability isn’t just in the generative side of content. AI-monitored warehouses can update stock and shipping orders faster than any current piece of supply chain monitoring technology, and it has the potential to do even more. When it comes down to it, the fundamental question of AI won’t be what it can do, it will be about what you trust it to do. 

Trust In AI? 

AI is an available technology, but do you trust it to handle your most vital business operations? At Logicbroker, we believe the discussion of AI should revolve around trusting your network. AI can supplement your current tech processes, but do you trust your supplier and partner networks to appropriately represent your brand? 

With AI, you can carefully monitor suppliers, partners, vendors, and more to ensure the highest compliance with your products. Even without AI, trust is a vital component of every network as Logicbroker puts immense effort into providing scorecards and detailed reports on the performance of each aspect of your network to ensure proper reliability. 

For the vendors you trust the most, implementing AI backstops ensures quick and smooth transactions. But AI will be a detrimental tool if you don’t already trust the network you work in. 

“We believe the conversation around AI is advancing away from its true benefit, which is automation,” Sockwell said. “Automation is at the heart of Logicbroker’s processes and, of course, we are keeping our finger on the pulse of AI advancements to properly implement it into our modern multi-vendor commerce platform.” 

Continue The Discussion

We all know these discussions will continue into 2024 and well beyond, but it’s important to have these discussions now rather than waiting for the impact to be felt down the line. Reach out to your Logicbroker representative and discuss the various ways our solutions and tools can impact your organization. Avoid high fulfillment costs, lower margins, and a fundamental lack of customer data. Connect, Orchestrate, and Grow within the Logicbroker network. 

About Logicbroker

Logicbroker is a premier dropship and marketplace automation platform that seamlessly connects trading partners regardless of integration types. Our modern solutions empower retailers and brands to take control of their customer experience by harnessing and analyzing vital first-party data, reducing inventory risk, and curating their expanded assortment. By improving the visibility into our client’s commerce programs, Logicbroker is able to better position retailers and brands for transformative growth.

As business needs and demand shift, Logicbroker provides the ability to quickly switch suppliers and product fulfillment between 3P to 1P and responsibly find new sources of inventory that uphold your brand integrity and meet your delivery promise. ​We work with mid-market and Enterprise manufacturers and retailers across a number of verticals including Health & Wellness, Home Improvement, Consumer Electronics, Toys & Babies, and Consumer Packaged Goods and service brands such as Samsung, Victoria’s Secret, The Vitamin Shoppe, Walgreens, Ace Hardware, and BBQGuys.