Top Trends to Watch for Retail in 2023
2022 was a year in flux for retailers and manufacturers alike, as uncertainty around the economy impacted by covid posed numerous hurdles such as the immediate and long impact of supply chain issues coupled with rising inflation. Many retailers struggled to keep their shelves stocked with new arrivals due to delays in the supply chain while some had inventory that needed to be cleared and as a result, expedited the trend that replaced the traditional Q4 sales peaks with longer sales periods throughout Q4 months. This challenge starkly contrasted with the method of success many experienced in the past. As we move into 2023, businesses can expect to face the same challenges of supply chain issues and inflation as well as a number of emerging trends that will shape the way they operate. We break down some key trends we project for 2023 and how retailers should position themselves to find success.
Extended and Early Sales Events
One major trend that retailers will see in the first few months of 2023 are continued discounts and promotions to clear out excess inventory according to the NPD Group. With the rise of eCommerce and competitive sales events, retailers will look to extend sales to cover months not days. “Retailers tend to anniversary sales, so expect more sales with earlier Black Friday and Cyber Monday deals in October,” says Cohen of NPD Group. Amidst inflation and bargain hunting from shoppers, retailers must maintain a competitive edge by offering reasonable prices that also bring value to retain customers.
Omnichannel Sales Strategy
An ongoing trend in retail that will continue is the increasing importance of e-commerce and establishing an omnichannel presence with both physical and online channels. As more consumers are turning to online shopping, retailers with a brick-and-mortar presence can gain a competitive edge over their peers by leveraging the benefits of online and offline shopping into one powerful and memorable experience for shoppers. Online browsing, in-store purchasing, seamless checkout experiences online, social media promotions, and livestream shopping proved to be effective sales channels when utilized together. As seen during the pandemic, omnichannel strategies like BOPIS (Buy Online Pickup In-Store), cross inventory check, livestream shopping, and browse in-store and purchasing online have been valuable methods for shoppers to make quicker and better purchases that will continue to see success in 2023. With many concerns of a recessionary climate in 2023, implementing a BNPL (Buy Now Pay Later) service from providers like Klarna, Afterpay, Affirm, and Shopify will become a powerful conversion tool to push shoppers to make their purchases. According to data from Morning Consult Economic Intelligence, households with an annual income of at least $50,000 reported a 25% increase in monthly spending with BNPL from 2021 to 2022. Retailers in 2023 will need to focus on bottlenecks that are preventing a customer’s purchase and optimizing they’re on and offline shopping experiences to increase conversions and retention.
Investment in Technology — Automation and Data
Finally, businesses that have yet to invest in technology including automation, real-time data, and analytics for trend forecasting will fail to compete with retailers that do. Creating operational efficiency will give a competitive edge to retailers that will free up more time while maximizing sales. Interpreting conversion and acquisition data from Google Analytics and ROAS, CPC, and CPA from ad spend on platforms like Facebook, Instagram, and TikTok will help retailers understand where they need to reduce costs and allocate more budget for their eCommerce stores.
At FashionGo, we’re constantly monitoring the state of the industry and what solutions and tools we can bring to create more business opportunities for both retailers and brands. Overall, 2023 is shaping up to be another year for both challenges and growth. Embracing the changing retail landscape and identifying trends to maximize sales, reduce costs, and increase operational efficiency will allow retailers to weather any obstacle.