January 23, 2023
The retail industry has been in flux for quite some time, with variables like e-commerce, social media, and the fallout of the pandemic continuing to shape how consumers want to shop. Taking notice of trends that are affecting the market can help brands stay ahead of the curve and know when to pivot or embrace new technologies. Trends also help companies know what their customers will come to expect from them, as well as identify opportunities for growth and edge out the competition. Here are 8 trends that will influence the retail landscape in 2023.
The Rise of Retail Media
Retail media will continue to be a channel for digital advertising in 2023. Major retailers, such as Amazon and Walmart, are leveraging retail media networks to grow their revenue, reach new audiences, and diversify their revenue streams. Additionally, retail media can provide valuable insights into the performance of brick-and-mortar stores regarding in-store visits and their future potential for growth. Going forward, it’s likely that retailers will embrace other formats for advertising, like streaming TV.
Offering a blend of physical and digital experiences, hybrid shopping channels will most likely become bigger in 2023. 75% of US consumers engage in omnichannel activities, doing their research and making purchases both online and offline channels. Furthermore, consumers are still doing their research online prior to purchasing a product, which is why it has become important for retailers to offer seamless hybrid experiences to their customers.
The TikTok Effect on Social Commerce
In addition to inspiring countless viral cultural trends, TikTok has contributed significantly to the rise of social commerce, with Gen Z users being a major driver behind this growth. It is estimated there will that U.S. retail social commerce sales will reach $79.26 billion by 2025.
Make it Personal
Personalization is a feature that has become an expectation for consumers when they are shopping. Besides being a convenience for shoppers, personalization enables brands to provide thoughtful and unique experiences for their customers. When brands leverage personalization, they can influence their audience’s purchasing decisions, increase engagement, cultivate customer loyalty, and increase sales. To prepare for an even deeper dive into personalization bands need to have a good strategy in place that utilizes technology to gather data for ever-smarter personalization.
24/7 Customer Support
Yes, shoppers want stellar customer service, but the quality of the service is only part of the equation. Consumers want to be able to get in touch with a business anytime, anywhere. Brands that provide 24/7 support will be able to offer higher-quality experiences to their customers. Issues can be immediately addressed, preventing an unpleasant situation from escalating. Again, this is where technology can be tapped, using AI and chatbots to provide superior customer support.
Flexible Store Design and Features
As more retailers have ventured into experimental retailing, they have adjusted the sizes of their stores. Larger retailers, like Walmart and Target, have been testing smaller format spaces, like Target Campus and the Walmart Neighborhood Markets. Many retailers are continuing to expand on other features to enhance customer experiences, like curbside pickup, fulfillment from store, and pickup in-store.
More Thoughtful Consumerism
Consumers are starting to take the ‘buy less, buy better’ mantra to heart, and they are making an effort to better understand the product life cycle. Shoppers are reusing, recycling, and repairing their purchases, and as a result, will simply be buying less stuff. Observant retailers have taken note and have started adding pre-owned items to their product offerings. REI has pre-loved outdoor gear available to their members and lululemon has established its Like New program. Companies like Patagonia and Everlane have made their transparency around the supply chain process part of their overall brand story for years, while resale platforms like ThreadUp, Depop, and Poshmark continue to make their mark with more environmentally-minded Gen Z consumer. It’s the brands that put sustainability out front that will win out with younger audiences.
Consumers want their stuff shipped fast and they don’t want to have to pay to get it shipped to them. But just as important is complete transparency regarding the shipping process. It helps cultivate customer loyalty and is just good business. Consumers want to know about shipping timelines and delays. In fact, according to a FedEx report, 70% of consumers surveyed stated that they are less likely to continue doing business with a brand that fails to notify them of shipping delays.
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