Home Venture Capital 2024 Commerce Predictions, According to Top Venture Capitalists

2024 Commerce Predictions, According to Top Venture Capitalists


Commerce, or the buying and selling of goods globally, is one of our economy’s largest drivers and continues to see rapid evolution. At the dawn of 2024, we are living through continued geopolitical tensions, more war, and rising deglobalization; a seemingly-averted recession, stabilizing inflation, and a new (higher) cost of capital; and, of course, the mass adoption of consumer-focused AI. What is in store for commerce? And what are investors paying attention to?

VCs contributed last year on their prediction for 2023, many of which came true. So, without further ado, here are top commerce-focused venture capitalists’ predictions and key interest areas for 2024:

“AI will drive improvements in sustainability across the commerce value chain. Some obvious applications: improvements in product design and inventory forecasting will reduce unsold inventory, and AI can optimize manufacturing processes and energy use to reduce production costs. But some less obvious sustainability benefits are on the horizon too: AI listing tools will increase the supply available to resale inventory marketplaces and the quality of the listings. On the discovery side customers will benefit from improved matching algorithms and AI search tools (think, photo search that actually works). Together, these changes will give the resale sector a particular pop in 2024, as consumers find buying something at resale getting better and easier.”

“As we enter 2024, two key commerce tends that I’m actively investing behind are:

AI-powered predictive intelligence for marketers will be the solution to scaling marketing post ATT. In 2021, Apple broke marketing with the ATT policy, causing a surge in CAC for brands due to restricted user tracking. Three years later, customer acquisition remains a challenge. Meta has lost over $10B in ad revenue since Apple’s ATT rollout. With a focus on profitability and sustainable growth, brands are seeking tools that provide effective results without high development costs. Because there’s no one set of rules, outcomes, or actions that are applicable across every brand, publisher or platform, brands will need to harness AI to better target and engage with new customers. The brands that lean into AI-powered insights will be best positioned in transforming their ability to acquire new customers at scale.

AI-driven planning, purchasing, and inventory optimization aim to address persistent issues of stockouts and excess inventory. In the apparel and footwear industry alone, the costs of these challenges amount to a staggering $250 billion. The conventional approach to merchandise planning and buying involves significant guesswork. Brands are seeking platforms that leverage AI for more precise forecasting, aligning with sustainability goals by producing just enough to meet demand. AI advancements eliminate the guesswork in merchandise planning, contributing to a reduction in overproduction.”

  • “AI delivers meaningful enough OPEX reductions for retailers that they are discussed in earnings calls in 2024
  • Shein IPO filing forces retailers and brands to adopt portions of its direct ship from manufacturer model”

“There are two important trends I think will drive commerce in 2024. Firstly, ecommerce brands will be owning their customer relationships more than in the past. Ecommerce companies used to rely on Meta and Google to bring in an endless wave of new customers cheaply, but marketing has become more expensive AND less effective because of consumer privacy protections. Going forward, brands will be leveraging their existing customer relationships and first party data to drive sales. Ecommerce tools that drive loyalty or create personalized experiences will be particularly important.

The second trend I’m expecting is ecommerce curation. We’re already starting to see companies selling AI generated images of yet-to-be manufactured products, and I expect we’ll start to see AI-generated content that mimics reviews or even influencer testimonials soon. In 2024, it will be very difficult for consumers to sort through a proliferation of new products and content, so they’ll be looking for tools that curate the shopping experience and cut through all the noise. I think AI shopping apps and UGC curation will be popular.”

“Amongst ongoing wars, global conflict and a US economy still in flux, I’m expecting to see several shifts across the global supply chain and e-commerce tech stack.

For one, the ongoing supply chain disruptions will continue to hit brands’ bottom lines, forcing them to diversify production. We can expect to see new manufacturing and logistics hubs pop up – both internationally and domestically [within the US].

As brands fight to boost their bottom line, big box retailers selling wholesale will have to compete against brand-driven loyalty programs and competitive shipping rates that entice consumers to buy direct.

AI will continue to augment the e-commerce tech stack, especially across search functions. Get ready to see numerous new entrants reimagine the way consumers search for products, offering brands significant boosts in conversion.

Lastly, cash-consciousness will carry over from 2023; brands will only spend on platforms and products that have clear ROI. Shut downs and consolidation will continue for everyone else.”

Downward pricing pressure across the commerce and supply chain stack seems one key through-line; the other is clearly the application of AI going across everything from product manufacturing, display, search, to inventory optimization and fulfillment.

With the regional banking crisis in the rearview mirror, let’s hope 2024 is an uptick year for venture investing amid all these possibilities for innovation.

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