Key retail trends that retailers cannot ignore in 2023

Authored by Amit Srivastava, CEO, Smollan India.

The retail industry, like every other sector of the global economy, has undergone a significant upheaval in the wake of the Covid-19 pandemic. Fortunately, in 2022, the instability brought on by erratic shifts in consumer demand patterns, ongoing supply chain constraints, and digital disruptions has almost completely subsided.

The key concern for the retail sector right now is to set a route for the future while incorporating the lessons learnt until now as the world gradually returns to balance. Here are a few trends that retailers should be aware of as we head into 2023.

Personalisation to the Fore

According to a survey conducted by Epsilon and GBH Insights, 80% of respondents seek personalisation from shops. Retailers can differentiate themselves by using personalised strategies to design distinctive experiences that are specific to each customer.
They can use data about customer preferences and behavior to tailor their marketing efforts and product offerings to their customers’ preferences. Additionally, on-ground sales teams can use this customer data to make personalised recommendations for products that are a better fit for their needs.
When businesses personalise interactions, customers tend to spend 40% more than earlier planned according to a study by Google and BCG. While increasing revenue, this also leads to customer loyalty, and increased purchase frequency, and can also drastically reduce acquisition costs.

Integrated Omnichannel Marketing

A study done by Harward business review and a major retailer found that 73% of shoppers buy through multiple channels. Omnichannel marketing focuses on delivering an experience that remains consistent across multiple touchpoints. Unifying customer data via various channels like devices, shopping carts, IDs, cookies, mailing lists, social media, referral programs, etc. enables a seamless shopping experience for the customers. With accurate personalisation and segmentation, an omnichannel marketing strategy brings forth instant revenue growth and increased returns on investment (RoI).

Artificial intelligence, Machine Learning and Data Analytics To Be Key Drivers for Retailers

Machine Learning and Artificial Intelligence are transforming how data is processed and uncovering patterns and trends that were previously unimaginable. Analysing patterns in customer data provides targeted strategies, increasing ROI on marketing campaigns. Data analytics can optimise inventory by forecasting demand, leading to higher asset turns and increased cash generation. AI-powered chatbots can be used to handle customer inquiries and provide personalised assistance, freeing up human customer service representatives to handle more complex tasks.

Virtual Reality and Augmented Reality: Enhancing the Shopping Experience and Driving Sales for Retailers

Virtual reality (VR) and augmented reality (AR) are increasingly being used by retailers to enhance the shopping experience and drive sales. AR helps retailers to provide their customers with an immersive, 360-degree view of their products, allowing them to visualise and interact with them in a way that is not possible with traditional shopping methods.

The ultimate example of virtual reality is the Metaverse, which can enable users to interact with virtual objects and environments. Retailers can create virtual storefronts, allowing customers to browse and purchase products in a virtual environment. Hosting virtual events and experiences like product launches or fashion shows, is possible for customers from anywhere in the world.

Self-service checkouts

Customers are adopting self-service checkout solutions more frequently because they believe them to be the fastest and simplest way to make purchases. According to a SOTI survey, 66% of customers would rather use a self-service option than ask store personnel for help. Besides the efficient use of floor space, self-service checkouts are an excellent method to lower overheads and increase productivity.

Social commerce

Gen Z in particular is quickly adopting social commerce, driven by the enormous popularity of several social media apps/ platforms. These platforms have a large user base, which allows retailers to reach a wider audience and attract new customers. In addition, it provides retailers with an opportunity to interact with their customers and build relationships. This will lead to greater customer loyalty and repeat business. Improved engagement also enables brands to tailor content to users’ interests, encouraging them to make frequent purchases.

Sustainability

In today’s increasingly environmentally-conscious world, sustainability is becoming an important factor for customers when choosing a brand. A white paper on changing consumer preferences says 79% of consumers are changing their choice based on sustainability. Proactive sustainable practices create a positive brand reputation and are more likely to attract and retain customers. However, retailers must not follow sustainable practices only to acquire customers, but also to build a better tomorrow for future generations.

Digital payment trends

One of the most significant digital payment trends for 2023 is mobile-point-of-sale (mPOS). With the increasing adoption of smartphones and the availability of secure mobile payment apps, mPOS is becoming increasingly popular among retailers, and is expected to grow at a CAGR of 10% in the next ten years.

Another trend that is rapidly emerging in 2023 is biometric authentication. By using biometric data to authenticate payments, retailers can significantly reduce the risk of fraud and identity theft. Additionally, biometric authentication can improve the speed and efficiency of transactions, as it eliminates the need for customers to enter passwords or provide identification, making the experience quick and seamless for the customers.

The Path Forward

The world has undergone several changes over the past two and a half years, some of which are irreversible. The measures taken in the present and the knowledge gained from the past must be used to forge the future. Stagnation and complacency are costly luxuries in the dynamic industry of retail.

With new technological developments, the retail sector is expected to continue to evolve in 2023, a fact that retailers should embrace, in order to constantly stay one step ahead of customers’ expectations.