In this article, we mention 4 retail trends you need to know in 2023 and give you some tips on how to implement them´
Lucy Cromwell, a contributor to TIMIFY has many years of experience working in property management and has recently turned her focus towards establishing herself as an authority in the industry.
The state of retail, and the global business arena as a whole, is beginning to come out of years of uncertainty in a new and unfamiliar shape. As economies across the world keep recovering from the pandemic, there’s pressure from all sides to “return to normal”, though there are differing opinions about what “normal” will look like.
Increased digital communication, a huge boom in remote services, and a flood of new adopters of innovative mobile tech, are contending with inflation and rising prices to define the retail sector of the future.
If you’re feeling a little uncertain about your business’s place in all this, you’re certainly not alone. Here’s 4 retail trends to watch in the new year.__________________________
When the pandemic first hit in 2020, we saw an unprecedented boom in ecommerce, with the Office of National Statistics reporting that the sector “grew by 46% in 2020, compared to the previous year”. When lockdown restrictions began to thaw, however, brick-and-mortar stores enjoyed a resurgence in foot traffic, proving the demand is still there for offline retail.
COVID-19 is beginning to feel more and more like a distant bad dream, and sales growth in brick-and-mortar stores is expected to continue on an upward trajectory. However, it’s unlikely that we’ll see offline retail regain the kind of volume it had before the pandemic.
Though offline retail certainly isn’t dead, many major retailers are beginning to convert their traditional locations into fulfilment centres, and aligning themselves with a global audience that’s used to, and in many cases genuinely prefers, getting their consumer products through websites and apps.
The key takeaway here is that ecommerce will carry on as a major driving force for retail throughout 2023, and retailers will need to ensure the right balance between digital and physical experiences according to their product niche and target audience.
Every year, Millennial and Gen Z shoppers are becoming a larger and larger part of the world’s total purchasing power, and demanding retail experiences that align with their needs. It’s no surprise that these younger age brackets were quicker to adopt new tech solutions that arose from the pandemic. For example, three quarters of American BNPL users in 2021 were Gen Zs and Millennials.
As we move away from the strictly digital-first behaviours that characterised the pandemic, retailers can still stand to make huge profits by aligning themselves with this emerging segment. However, it won’t be a simple case of building hassle-free digital experiences.
These age groups, especially Gen Z, have distinguished themselves as an audience by making buying decisions based on their personal values, much more so than Baby Boomers and Gen X shoppers.
Issues such as racial equality, climate change, and the cost of education all have a serious effect on the way younger shoppers perceive brands, and how likely they are to convert in any given pipeline. Aside from this, Gen Z shoppers tend to be more frugal than older generations of shoppers, meaning retail brands will have to walk a challenging tightrope to extract maximum value from these shoppers in the near future.
In 2023, retailers will need to cultivate tech stacks that allow for greater audience segmentation, using granular tools such as Outbase with an emphasis on “focused campaigns to maximise impact for each audience segment”, and the kind of highly-detailed analysis that will allow you to adjust your marketing to new behaviours as they emerge.
As ecommerce stores covering all niches are embracing new technologies that tailor experiences to the shopper, an exceptionally high degree of personalisation is quickly changing from being just a nice touch to a non-negotiable necessity.
Forward-thinking retail companies are now offering dynamic product recommendations based on customer behaviour data, alongside email campaigns that filter out products the recipient won’t be interested in, and advanced manual customisation options that give shoppers total control over the way that they interact with retail brands.
Some forward-thinking companies are even using this emphasis on personalisation to define their whole business models, such as Stitchfix, which uses a combination of human stylists and machine learning algorithms to offer up clothes based on shoppers’ unique tastes.
Though shoppers don’t expect mind-blowing levels of personalisation from all brands, retail leaders must still understand that hyper-personalised ecommerce experiences are the future, and the brands that get ahead of the curve early can expect to win big.
McKinsey has a great report on the demand for personalisation which divides consumer demands into four categories. Try to accommodate for the following when planning any future personalisation drives:
“Meet Me Where I Am”: Make it easy to navigate your store / app, and communicate with the utmost transparency.
“Know My Tastes”: Ensure product recommendations, marketing campaigns, and any other interactions are relevant to your customer profiles.
“Offer Something Just for Me”: Build highly-targeted promotions and address communications specifically to the individual.
“Check in With Me”: Follow up in a non-intrusive way that provides real value to the customer.
For many consumers, ecommerce isn’t just shopping-made-convenient, it is shopping.
Modern brands no longer have to worry about breaking into the ecommerce space, and should instead focus their energies on helping customers move from online to traditional channels and back as seamlessly as possible.
Like hyper-personalisation, seamless customer journeys aren’t quite the standard yet, but forward-thinking adopters can stand to enjoy massive gains in the new year and beyond by investing in it.
Again, businesses should be looking to their tech stacks to gain a more detailed view of their customer journeys, and find new ways to surprise and delight their customers. Building a 360-degree view of how their audience is behaving across all channels, prioritising real-time inventory and site activity analysis, and providing a high degree of flexibility when it comes to payment options, will all ensure that you can bullseye your customer experience management, and position yourself for a customer journey your audience will love.
Retail has had a turbulent few years, but the disruption has brought a number of promising opportunities to the fore. We hope these pointers have helped you plan for your business’s future, seize on these opportunities, and enjoy a prosperous new year!
Lucy Cromwell, a contributor to TIMIFY has many years of experience working in property management and has recently turned her focus towards establishing herself as an authority in the industry. Connect with Lucy on LinkedIn: @LucyCromwell7