The retail sector is facing significant challenges this year, with reasons for optimism and the need to adapt to new trends. The retail industry is undergoing a transformation in the first half of 2024, addressing challenges that demand agile adaptation to new trends, especially since the COVID-19 pandemic.
Despite previous challenges such as high inflation impacting profitability in 2023, Spain achieved a 6.1% growth in retail sales, the highest increase recorded in the European Union.
This year promised, and is proving to be, a period of growth opportunities, with the prospect of gradually controlling inflation and a likely reduction in interest rates, factors that should boost consumption and favor retailers’ revenue.
Despite previous challenges such as high inflation impacting profitability in 2023, Spain achieved a 6.1% growth in retail sales, the highest increase recorded in the European Union.
Beyond the Point of Sale: Retail Spaces Make a Comeback
The importance of physical stores has evolved beyond being merely a point of sale, becoming an essential element in omnichannel strategy and sector logistics.
This is reflected in the recovery of occupancy levels in major shopping centers, which have surpassed pre-pandemic levels. In this regard, retailers are adopting a selective store-opening approach, prioritizing larger and better-located ones while emphasizing store design, storefronts, facades, product layout, and diversification.
Demand for prime locations has experienced a notable increase, with numerous new openings on the main shopping streets of Madrid and Barcelona. This has driven up rental prices, especially in shopping centers and medium-sized parks.
The importance of physical stores has evolved beyond being merely a point of sale, becoming an essential element in omnichannel strategy and sector logistics.
Changes in Consumer Patterns
Regarding consumer patterns, we are witnessing a significant shift, especially in fashion spending.
According to a report by Kantar Worldpanel, spending on clothing has decreased by 33% since 2008, driven by inflation and generational changes. While baby boomers increased their purchases by 6% in 2023, younger generations reduced theirs by 1.7%, opting to buy only what is necessary and preferring low-cost online retailers.
Demand for sustainability is also on the rise, with a growing percentage of consumers seeking garments made from recycled materials, although not all are willing to pay a premium for sustainable products.
Secondhand on the Rise
The secondhand sector is experiencing significant growth, facilitated by consumer-to-consumer collaborative economy platforms and by stores clearly embracing this type of clothing. This phenomenon, known as “recommerce” generated over 5.5 billion euros in Spain, according to data from Milanuncios. It is a rising trend that could grow globally at a rate of 20%.
As such, major brands and retailers have incorporated secondhand product buyback programs, allowing them to retain customers, increase the profitability of their products, and extend their lifecycle.
In summary, the retail sector in 2024 will be characterized by its adaptability and focus on innovation to meet the new demands of consumers. With inflation under control and a renewed emphasis on sustainability and
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