The retail sector is in a constant state of flux and faces many challenges, from supply chain disruptions, recruitment difficulties and the impact of the Covid-19 crisis. So to stay ahead of the curve and keep up with demand, brands need to keep a close eye on emerging trends that will influence the sector in the years to come.
To help you get a clearer picture, here’s a look at the key retail trends for 2023, as well as best practices for adapting your strategy accordingly.
Top 7 retail trends in 2023
Beyond transient phenomena and fashion effects, certain retail trends will have a major impact on players in the sector in 2023, but also in the years that follow.
Online sales are booming…
In recent years, consumer behavior has changed dramatically, with online shopping becoming an increasingly important part of consumer spending.
A phenomenon that the Covid-19 pandemic has only accentuated… During this period, many retailers have taken the decision to open an online shop to continue their business, while customers have turned massively to the web to make their purchases.
As a result, e-commerce is experiencing unprecedented growth. According to the Federation of E-commerce and Distance Selling (FEVAD), online sales exceeded €129 billion in 2021, an increase of 15.1% compared to 2020.
… but physical stores are making a comeback
Despite the growing success of e-commerce, physical shops have not said their last word. Retailers now have to reconcile online presence and in-store reception to offer a seamless customer experience.
This is the whole point of phygital, which aims to revitalise sales outlets and boost footfall by exploiting digital tools. Among other things, they make it easier for customers to shop in stores, but also save time.
These are important issues in order to offer a tailor-made customer relationship, far removed from the standardised offers traditionally offered in shops.
The retail customer experience is increasingly personalised
By creating personalised shopping experiences, brands can offer unique products and services, and thus respond precisely to their customers’ expectations. Indeed, most consumers are more likely to make a purchase if they are offered a tailored experience.
Again, digital plays an important role here, through personalised email campaigns, mobile apps or gamification, but to deliver a differentiating experience, data collection is crucial. Data allows you to analyse and better understand customer behavior at the point of sale, in order to better respond to their requirements.
The phasing out of third-party cookies is a real challenge for brands, who already need to rethink the way they collect data, giving preference to proprietary cookies, but also adapting their digital marketing strategy accordingly.
Social networks are becoming an essential sales lever
The e-commerce boom is also being driven by new online sales levers, such as social networks. According to a study by Accenture, transactions on social platforms would amount to more than $492 billion in 2021, globally.
And for good reason: more and more consumers are buying products from social media, so social commerce brings a powerful new tool to retailers, who can close sales directly on these hugely popular platforms. What’s more, it allows brands to generate more interaction with their audience.
The use of relevant KPIs allows to optimise sales seasonality
A good retail strategy involves optimising activities over the seasons. With digital, retail has become more fluid: customer needs are constantly changing and it is necessary to adapt to them. Retailers therefore need to be flexible across all sales channels.
In other words, the success of a retail strategy relies on its ability to adapt throughout the year, according to the calendar’s peak times: holidays, public holidays, vacations, but also commercial events such as sales or Black Friday… In this way, brands are able to react quickly and efficiently to emerging retail trends, but also to peaks in demand.
Such an approach requires:
- excellent planning,
- implementation and exploitation of relevant key indicators (weather index, store footfall, average basket for the period, number of sales per period, etc.),
- a good dose of creativity,
- as well as careful implementation of the retail strategy.
But the rewards are worth the effort, as the company is ready for all major events in the coming year. This preparation and the use of the retail features of a high-performance BI solution also secures its profit margin targets.
Automation is on the rise
The increasing use of automation technologies in the retail sector is no coincidence… In a context of increasing recruitment difficulties, optimising staff working time is crucial, as is staff retention.
Automation can improve various elements such as cashing up, sales reports and employee time management.
These new technologies also help retailers better anticipate delays in their omnichannel supply chain. In particular, they use them to improve order tracking and to simplify invoicing and inventory management. This can help them meet the challenges of tomorrow, while increasing profitability.
Artificial intelligence at the service of retail
Artificial intelligence is another technological tool that could play an increasingly important role in the retail sector. In the coming years, its impact is likely to be felt in the areas of customer intelligence, predictive analytics and machine learning.
The results: more accurate demand forecasting, better pricing decisions, but also optimised product placement at point of sale, and as for the metaverse, it could well strengthen the impact of AI in retail in the near future.
Best practices for a successful retail strategy in 2023
To adapt to the retail trends of 2023 and face the new challenges ahead, brands can take concrete actions and reshape their strategy.
Adopt an omnichannel strategy focused on conversion
A holistic and integrated approach to retail is now essential. To capture as many consumers as possible at every stage of the customer journey, retailers need to offer a consistent experience across all sales channels.
Brands also need to put conversion rate at the centre of their strategy. By monitoring and optimising this retail KPI using a decision dashboard, they are doing everything they can to encourage their customers to complete their purchase journey.
Diversify sales and advertising channels
To reduce their cost of acquisition while attracting new customers, retail players are increasingly turning to diversification.
This applies not only to product sales, but also to communication and marketing campaigns. So brands have a vested interest not only in varying advertising media, whether websites or social networks, but also in increasingly targeted campaigns.
Existing channels, which have already proved their effectiveness, must of course be maintained and optimised over time. But looking for new, newer and therefore more affordable opportunities at the same time helps reduce customer acquisition costs.
Finally, retailers need to be careful to segment their audience as it grows and diversifies.
Building customer loyalty through a strong brand
Consumers who have been disappointed by a company’s products or services are likely to switch to the competition within a few days, so avoiding bad experiences is about building lasting customer loyalty.
But that’s not enough… To retain customers over the long term, retailers need to build a strong brand image by emphasising values that consumers hold dear, but also by offering a highly personalised experience.
Putting performance indicators into perspective
Turnover, conversion rate, average shopping basket, store footfall… Retail KPI monitoring is an interesting approach for retailers, who can monitor their activity in real time.
However, it is even more relevant to compare these data with a baseline in order to put them in perspective. For example, a 3% conversion rate may be surprisingly high, or on the contrary very low, depending on the sector of activity and the type of products sold.
Benchmarking is therefore an excellent way of making the figures speak for themselves by comparing them with other information, whether quantitative, qualitative, internal or external. In all cases, this benchmarking should be backed up with customer knowledge.
From social commerce to personalisation to automation, the major retail trends for 2023 are creating significant challenges for brands, but also unprecedented opportunities. To take advantage of them, players in the sector must adapt their strategy, but also integrate a retail analytics tool to exploit the full potential of their data.
