Since the start of the Covid-19 pandemic two years ago, the retail industry has been living in an age of uncertainty. Global economies are still trying to recover and return to normal levels of growth.
Although markets skyrocketed in 2021, present economic indicators suggest we are falling into yet another recession. Retailers, therefore, must prepare and adapt to current consumer conditions.
These are the biggest retail industry trends to look out for next year:
Accelerated digitisation and omnichannel experiences
Technology has traditionally played the role of streamlining processes and reducing hassles in the life of the consumer.
In 2023, the fusion of physical and digital experiences is expected to advance. Immersion and interactivity have been major buzzwords this year. We will see continually evolving innovations and developments in transformative technologies such as artificial intelligence, the internet of things, virtual and augmented reality, cloud computing, blockchain, and high-speed network protocols such as 5G.
Retail leaders are optimistic about digitisation prospects for the next five years, such as voice commerce, cashier-less and staff-free shops, as well as sales of digital goods.
Online shopping offers great convenience, while also enabling retailers to learn a lot about our shopper behaviour. Offline shopping means physically observing and buying products right away on-site. Hybrid shopping combines these two modes to offer all-encompassing experiences. Having a hybrid mindset in 2023 would be a key strategy for retailers seeking to continue building brand awareness and customer loyalty.
Retailers should plan for new and continued investment to meet both current and future eCommerce needs. Consumers are now dynamic and increasingly rely on technology and digital platforms. Given the major chunk of investment in digital marketing, retailers should explore the metaverse and its 3D environments and VR/AR, creating marketing opportunities, such as virtual product launches and events. These trends will impact retail in online and offline spheres.
Supply chain movements
Disruptions within supply chains that emerged during the global lockdowns during the pandemic caused challenges in the manufacturing and transportation of goods internationally. Moreover, these issues were only worsened by the Russian invasion of Ukraine, which is sending shockwaves throughout supply chains and the global economy, driving up inflation and the cost of living.
Eighty per cent of retail executives surveyed by Deloitte state that customers will prioritise ‘stock availability’ over ‘retailer loyalty’ in 2023.
Consumer shopping habits have changed heavily due to shifting priorities from the pandemic. It is difficult to predict nowadays when and where customers will spend. Consumers are themselves acting as merchants, curating and branding their own range of products, and reselling used goods via digital platforms.
To battle these issues and remain afloat, companies need to strengthen their resilience in all areas. This entails reducing exposure to volatile market pricing of commodities, as well as building protective measures into supply chains to deal with shortages and rising logistical fees. Retailers must map out their entire supply chains, identify any exposure to supply and inflation risks, and mitigate any risks.
New employee workforce demands
Just one year ago, the labour problems prevalent in the retail sector today would have seemed unlikely, given where the economy was headed and how common workforce lay-offs were. Yet, over the past year, there has been a mass migration of talented people, referred to as the ‘great resignation’ and ‘quiet quitting’, as workers reassessed the impact of work and what they want to get out of their lives. Employee priorities have changed, especially around salaries, work culture, flexibility, and equality, diversity and inclusion.
But many retailers have found the realities of today’s workforce to present surprising challenges. In fact, Deloitte found that 83 per cent of retailers are investing heavily in recruiting and retaining employees.
As labour issues are among the primary industry challenges, retailers should reset their thought processes regarding employees to be able to prosper in the near future. Retail employers must offer attractive careers with fulfilling work, ongoing opportunities to learn and progress, flexibility and a diverse, value-oriented company culture in 2023.
Conscious consumers define retail habits
To succeed in retail in 2023, businesses have to continue to adapt to belief-driven or conscious consumers that consider environmentalism, socio-ethics, and sustainability.
Retailers that successfully react to this trend will build stronger bonds of trust and loyalty with customers more easily, while also developing more efficient operations and processes.
