2022 was a landmark year for retail- making retail predictions for the year 2023 a primary focus for strategists and retailers entering the new year. Technology took the spotlight as metaverse experiments and NFT drops made the news. Social commerce and eCommerce kept their upward growth trend as influencer marketing saw an uptick in popularity. Environmental concerns peaked as sustainable brands became mainstream. Supply chain disruptions affected almost every major brand and retailer across the globe. The 2023 recession and inflation impacted how consumers shop. Interestingly, however, overall retail spending remained the same despite uncertainties changing buyer perception. This was mostly due to the significant bank savings generated during COVID keeping the cash flow in motion.
Retailers preparing for 2023 need to take a pulse of market shifts, and the future of retail. Teams must understand the expectations of tomorrow’s shoppers and what technology will be a must-have in the new year. Here are Intelligence Node’s top 5 picks from the eBook “11 Hot off the Press Retail Predictions for 2023”.
#1 Omnichannel Will Dominate Retail
COVID-19 has long since blurred the line between physical and digital retail. Today, omnichannel has become critical. 86% of modern shoppers use at least two different channels while making one purchase and over 70% of consumers use at least three. It is also observed that using more than three channels can increase the order rate by around 494%. Evidently, retailers not selling on multiple channels are missing out- on up to a massive 30% of sales. According to Shopify’s Future of Commerce report. retailers and brands are paying heed to this growing omnichannel ecosystem. As of today, 50% are preparing to unify their online and offline channels, offerings, and data. Further, 53% of them are also adopting technology to help expand the business to various channels.
Nespresso is a great example of successfully and innovatively utilising the omnichannel platform. Nespresso sells through online channels and offline retailers. However, it keeps certain products exclusive to its own stores, promoting DTC while also expanding through other channels.
#2 Conscious Retailing & Sustainability will Take Center Stage
Brands can no longer turn a deaf ear to conscious practices. Today, over 66% of online shoppers in France, China, and UK, and around 50% of US online consumers have shown concern about climate change. Further, approximately 90% of Gen X consumers are willing to spend an extra 10% or more for sustainable products. This is in stark contrast to two years ago, when this figure sat at just 34%.
Over 79% of shoppers are changing their purchase choices based on sustainability, according to a Capgemini consumer survey. Thus, brands must introduce eco-friendly practices throughout their production and packaging processes. Research on retail predictions for the coming year also suggests that the Millennials and Gen Z demographic are more likely to shop with brands that align with their values and are willing to spend more on environmentally friendly brands.
Apart from environmental consciousness, today’s young shoppers also expect brands to support their social and ethical values and stand behind the right causes. They also greatly influence Gen X parents and even Baby Boomer grandparents’ purchasing decisions.
Retailers turning a green leaf this 2023, beware: do not ‘green-wash’ your sustainability efforts and blindside consumers by claiming more than you are actually doing. This practice could alienate audiences from your brand and lose you loyal customers.
#3 NFT and Metaverse Experimentation will Gain Further Momentum
While eCommerce ruled during the pandemic and became an indispensable part of the retail ecosystem, 2023 may surpass it for a more immersive, digital, and interactive metaverse experience. The metaverse market is forecasted to surpass $800 billion in 2024, painting the picture for a promising future, with investments pouring into this $8 trillion opportunity.
Further, NFT sales exceeded $17 billion in 2021. Instantly, brands and individuals alike were completely absorbed by this novel opportunity. Considering the peaking levels of interest, this number is bound to grow exponentially in the next few years.
While today, the fanfare around metaverse and NFTs is declining, brands are committed to using newer, more innovative ways to incorporate them in customer journeys. For example, Starbucks and Louis Vuitton use NFTs to offer exclusive offers and rights to prized consumers. Most leading brands like Adidas, Nike, Zara, Mcdonald’s, and others have started taking payments through cryptocurrencies. NFT drops of new product lines and digital art are a popular means to introduce new products in the market.
#4 Retailers will Invest in Forecasting Tools to Overcome Supply Chain Woes
First was the delayed shipping and empty shelves due to closed borders amidst COVID. Then, as borders opened again, retailers, without using accurate retail predictions, overcompensated. They ordered products in plenty, however, many of these styles were going out of fashion as shoppers returned to normalcy. Today, 56% of online shoppers agree that supply chain disruptions occur more frequently.
For example, brands like Macy’s, GAP, Zara, and many others ordered an excess inventory of items like jogger jeans. These were anticipated to perform well due to their performance during the pandemic but went out of trend, leaving the brands to deal with dead stock. This outcome showed the retail world the need for a trend forecasting tool to accurately forecast which products will perform well in the future and which will go out of trend based on multiple pre-determined factors.
Apart from these difficulties, shopper expectations have coaxed retailers into offering same-day or next-day delivery fulfillment options. Not just that, but simple and free returns, and flexible exchanges. 56% of online shoppers between 18-34 years expect to get same-day delivery options. 61% are willing to pay more just to have their items delivered on the same day. Robust and automated supply chain solutions are necessary for retailers and brands to cater to shopper expectations.
#5 Subscription eCommerce will Gain Massive Following
The global subscription eCommerce market is undoubtedly becoming an indispensable part of eCommerce. Its size is expected to surpass $120 billion in 2022, at a CAGR of 64.64%. This sales strategy is an effective tool during inflationary periods where consumers otherwise might reduce spending but continue their subscriptions which are now a part of everyday life.
Many major brands and newer DTC players already offering subscription services and many are following suit for its many advantages. These include BirchBox, Dollar Shave Club, Amazon Prime, Hello Fresh, and Netflix.
Intelligence Node’s Key Takeaways for the Coming Year
- Make digitization your mantra. The future of retail is going to be heavily influenced by digital retail and there are no two ways about it.
- Integrate data-driven decision-making into your day-to-day operations by investing in advanced analytical tools.
- Predictive analytics and advanced pricing solutions can help tackle price sensitivity via retail predictions amidst inflation and recession fears.
- Spend time and resources on analyzing consumer reviews and ratings, as these are a great way to decode consumer sentiment and improve products based on shopper feedback.
- Leverage consumer data and market trends and invest in personalization tools. Focus on unifying online and offline processes to offer a seamless consumer experience.
- Aside from modern tech solutions, analyze opportunities in the metaverse and advanced chatbots to make consumer experiences more engaging and realistic.
- Multisource products from various providers, or even consider near-sourcing to reduce disruptions.
- Ensure that your branding, content, and customer service are consistent across channels, irrespective of whether your customer is on your website, social media, mobile app, store, or interacting with your sales personnel.
- Offer multiple payment options, such as BNPL (buy now pay later), digital currency, mobile wallets, and loyalty program points, to give customers the flexibility to pay through their preferred payment method.
- Finally, invest in impactful partnerships: with state-of-the-art AI solutions such as intelligence node, your brand could see profits skyrocket this 2023- to learn more, book a demo today!
More Retail Predictions for Maximum Profitability
If you think this sneak peek into 2023’s retail potential could take your brand to the next level- download all 11 retail predictions in Intelligence Node’s latest eBook “11 Hot off the Press Retail Predictions for 2023”, for more insights, stats, and forecasts for the new year.