Top 10 Retail Trends to Watch in 2023
The retail industry is a fast-paced and ever-changing industry. Retailers are always trying to find ways to stay competitive. That’s why it’s essential to keep an eye on trends. What does the future hold for retail?
Retailers and brands are recovering from a three-year pandemic. Over the past year, supply chain challenges, inflationary pricing, economic uncertainty, and geopolitical factors have taxed retailers and squeezed finances. In 2023, however, the outlook is positive, and the focus is on the customer shopping journey. As retailers adapt to a new normal, a seamless omnichannel experience and hybrid shopping are shaping the future of retail.
Here are the top 10 retail trends impacting the industry in 2023.
1. Retail Media Networks
Retail media networks are a form of advertising that enables retailers to monetize their first-hand data to better serve customers with more relevant offers when shopping in digital and physical stores and via email/SMS. Brands typically need more data to deliver personalized messages to consumers at scale. Retail Media enables them to create better consumer profiles for personalization by leveraging retailers’ first-party data in a secure manner. Ultimately, this collaboration enables better engagement with the ever-present consumer/buyer throughout their shopping journey.
Retail Media represents an exciting business opportunity for many retailers who display branded ads in-store or on apps and e-commerce sites or share them via third-party channels such as social media platforms. It’s an exciting space to watch, one in which there could be plenty of innovation in the upcoming months. In 2023, Retail media networks are changing the dynamic so that the retailer is now the seller and the brand is the buyer. They are setting up a collaborative mechanism between brands and retailers.
2. Frictionless Experience
Every shopping journey has friction points, and retailers seek to remove as much friction as possible online or in-store. Fast and frictionless in-person shopping experiences have become an expectation in 2023. Self-service checkouts and frictionless experience are major drivers of this demand. The Frictionless approach focuses on customer needs and experiences. It can help reduce labor costs, but that’s not the goal. Often, it simply frees up cashiers to perform other tasks, such as assisting customers or restocking.
As technology investments in infrastructure bandwidth and computer vision continue to accelerate, as well as cloud capabilities tied to store systems, we can expect frictionless capabilities to advance rapidly. New stores will be the focus, as infrastructure can be easily installed prior to build-out.
3. Immersive Commerce
Want a competitive advantage in 2023? You need a strong experiential retail strategy with hybrid commerce and a seamless shopping journey.
Immersive commerce is defined as enhancing consumer shopping experiences in-store, for example, with apps, QR codes, chatbots, augmented reality, interactive displays, etc., and/or online – with virtual trials, 3D product previews, etc. Of the sub-domains of immersive commerce, personalization, Livestream shopping, and virtual stores are the most recognized, while virtual fitting, in-store augmented experiences, and the metaverse are the least known in terms of how to bring them to reality in a retail strategy. Retailers will need to find ways to connect the real and virtual worlds to drive return on investment.
Chatbots are, in essence, the perfect add-on for any retail team looking to provide an omnichannel experience for customer support. Artificial intelligence will be the focus of most major retail technology providers in 2023 and will be on the “capabilities to investigate” list for most retailers.
Web 3.0 and the metaverse are emerging concepts for retailers, but retailers are struggling to integrate these technologies due to slow adoption, security, and ownership issues. Retailers who want to leverage the metaverse with shoppers will define Web 3.0 strategies in 2023, and it will take a few retail leaders to test, learn, adapt, and market for others to become fast followers and generate higher revenues. Expect retailers to investigate and experiment in 2023.
4. Customer 360 and Customer Data Platform (CDP)
A customer data platform is a technology platform that creates a persistent and unified view of customers – a 360-degree view of customers. Data is extracted from multiple sources, cleansed, and combined to create a single customer profile. CDPs fuel new strategies, solutions, and loyalty programs, allowing us to know the customer, serve them where they are, learn from them, and keep them engaged across channels and outlets. The focus on CDP solutions is expected to continue into 2023. Major players are investing in business intelligence or data analytics solutions to grow their businesses.
5. Supply Chain Visibility
For a retailer to be truly efficient and successful, they must have a clear and accurate understanding of inventory and supply chain visibility. In 2023, retailers will have the opportunity to leverage the cost benefits of the supply chain and focus on supply chain resilience (the ability to withstand or recover quickly from challenges).
Leading retailers will rely on last-mile delivery partners that offer more sustainable delivery options, such as electric vehicles, green delivery slots, dark stores, and delivery consolidation that reduces costs. In 2023, retailers will invest in back and front offices related to the supply chain, inventory management, distribution, tracking/tracing, and delivery/shipping.
6. Social Media Sentiment Monitoring
Social media sentiment monitoring involves collecting and analyzing information about how people talk about a retailer or brand on social media. By actively engaging on social media, retailers can better understand data about their customers’ feelings, preferences, and attitudes toward their brands and competitors. Retailers who build a large follower base can use data and sentiment monitoring to better understand the mindset of consumers and more accurately predict trends in buying behavior or product preferences. Social media monitoring and developing social commerce opportunities can create great loyalty with a fan base. Retailers have a golden opportunity to discover how to generate revenue from social media and drive social commerce in the future if they can secure the best individual influencers to follow. Live streaming to showcase events and offer personalized sales can fuel loyalty with social commerce platforms like TikTok Shop.
7. Omnichannel Shopping
To remain competitive, retailers must integrate in-store and online experiences. The physical, online, and social worlds have borrowed the best elements from each other and merged the boundaries to be able to offer the best omnichannel shopping experience to consumers. We see this trend accelerating in 2023; from the growth of social commerce to the integration of digital elements into brick-and-mortar retail, the boundaries between offline, online, and social media will continue to blur as brands and retailers attempt to provide a seamless and efficient shopping experience.
Omnichannel shopping is quickly becoming the norm. Shoppers want to be able to research online and buy in-store. Or vice versa. Approximately 60% of consumers’ report doing research online before making a major purchase. Most of the time, a consumer returns a product in-store and makes the refund at the same retailer. This means retailers need to offer integrated online and offline experiences, and these two worlds need to come together seamlessly.
Additionally, appointment shopping allows consumers to set aside exclusive time in-store to browse products. It is an omnichannel and experiential retail strategy. It enables greater personalization and quality customer service experiences.
8. Transparency in Shipping
Speed, cost, and transparency in shipping are three key retail trends for 2023. However, fast and free delivery alone is not enough. Fulfilling delivery promises is also crucial to winning and retaining customers.
To do this, retailers must be transparent about shipping times and delays. When shipping is delayed, consumers must be informed and ensure that customers have a way to check on the status of the delivery upon request. Transparency of delivery information will become a major issue as more consumers demand more control.
9. Changes in Store Design and Mixed-Use Spaces
Store design has been imperative over the past two years, with retailers adjusting store size and experimenting with experiential retailing. In 2023, we’ll see more and more retailers moving from purists – retail-only stores – to hybrid venues with offerings other than inventory. Retail stores may have the concept of mixed-use spaces that implement services, event spaces, and even coffee shops on their premises.
Many retailers are adding features to support new shopping initiatives, such as curbside pickup, delivery from stores, and in-store pickup. Whether you run a spa or salon selling beauty products onsite, pop-up exhibits, or adding a store at the outlet, businesses are finding ways to maximize revenue through retail.
Hybrid retail locations lend themselves well to unique experiences, which we already know shoppers love. As such, we’ll see more of this trend in 2023 and beyond.
10. Environmentally Conscious Retail Gears Up
With consumer interest growing, 2023 could see increased sustainability initiatives from startups and brands. While the higher price of more environmentally friendly retail products may deter some consumers from buying, they will buy less stuff. 2023 is the year that we will see consumers slowing down; in other words, a consumerism curtailment. There will be less waste in packaging, but repair, recycling, reuse, and thrifting will increase. Simply put, consumers will buy less stuff and become more invested in understanding the product life cycle. Retailers have already begun to address this area by adding pre-owned items to their product assortments. Today’s consumers are demanding that retailers use recyclable and sustainable packaging for their products, both for digital and physical purchases. Second-hand products, recycling, and reusing are becoming more common and are increasingly expected by consumers.
The customer is still king, and it’s the retailers’ job to serve customers royalty. The above ten are the most relevant to the industry among the current retail trends. Retailers will also focus on reshaping the workforce, such as finding the right balance between onsite and remote work and creating environments of inclusivity and community as a pillar of investment and focus. The buyer’s journey remains center stage as the year winds down and retailers look to the future. But, buyers still expect transparent shipping. They want sustainable goods, fair prices, and strong customer support. To incorporate these retail trends into your business, consider digitizing your operations and trying new ways to generate revenue.
In the coming years, retailers will need to be flexible and agile. Find ways to meet these demands through technology, innovation, and keeping up with retail trends. The future of retail remains bright for customer-centric retailers who continually improve their operations and find ways to do more with less. At ChainDrive, we are committed to serving ambitious retailers who want to succeed and thrive now and in the future.
ChainDrive’s all-in-one retail solution offers all of the above and more. ChainDrive is a fully integrated retail platform designed to grow with you. Built-in features and modules allow you to grow and adapt. In addition, our easy-to-use software, professional services, and more allow retailers to implement technology quickly, so you’re never left behind. Request a free demo of ChainDrive and see why agile retailers choose our platform to manage and grow their businesses.