Top 5 Retail Trends to Keep an Eye on for 2023

Consumer trends and expectations are changing, and retailers must adapt if they want to remain competitive in an increasingly dynamic and quickly evolving market. With inflation and continued supply chain issues putting pressure on disposable income and many businesses still recovering after the COVID-19 pandemic, the retail industry across North America has to think creatively about elevating the customer experience and better leveraging technology to make an impact.¹

From social commerce to digital transformation and sustainability, customers are looking for retail trends that will change the way they shop to better suit their current lifestyles and values.

For both online and offline retailers, an innovative, omnichannel (and, whenever possible, hybrid) approach to sales and a convenient, customer-centered returns strategy are critical to staying ahead of the competition and providing customers with the kind of retail experience they now expect.

Here are five retail trends to keep in mind to ensure your business can fulfill customer needs and stand apart from the competition in 2023.

Social Shopping for Product Discovery

Social media platforms will continue to be an essential part of the marketing mix for most retailers through product pages on social media networks, paid advertising, or organic marketing campaigns.² Mobile-first cohorts like Zoomers (Gen Z) are a key group influencing consumer trends as they relate to the direction of social commerce and the omnichannel retail equation.

When it comes to driving sales using social media, many platforms have been trying to gain ground, but only one has come close: TikTok will add nearly 10 million social commerce consumers, twice the combined increase for Facebook, Instagram, and Pinterest.³

Social media will remain critical to product discovery and awareness in 2023. It will also be an increasingly important way for a small business or a larger retail brand to reach consumers and generate sales, particularly when it comes to younger shoppers.

Hyper-personalized Product Recommendations

Customers now expect much more from personalization than just their name in an email. With 72% of shoppers saying they will only reply to email marketing messages if they’re personalized, the retail industry must step up and provide targeted and personalized recommendations. This includes product suggestions, sizing information, and smart cross-sells as part of the overall customer experience.⁴

According to Adobe Analytics, 79% of retailers currently invest in personalization and, along with omnichannel retail (using three or more channels to communicate with a potential customer) can increase customer orders by nearly five times and spend by 10%.⁵

With 86% of customers willing to pay more for a better shopping experience and customer service, hyper-personalization will be a critical part of increasing sales in the online and offline shopping space, improving customer engagement, and fostering brand loyalty in the coming year.⁶

Immersive and Experiential Shopping

With shopping now happening anytime and anywhere, 82% of global brands said delivering experiential value for customers is a crucial need for 2023.⁷ Whether it’s in the metaverse, using online AR/VR technology, or in-store, generating a stand-out shopping experience through retail innovation is the retailer trend consumers now expect.

Online experiences that use augmented reality (AR) allow shoppers to try before buying via digital channels. For example, retailers like Amazon and IKEA have been using AR to let potential buyers see what a piece of furniture might look like in their homes.⁸

Nevertheless, the fact that 35% of customers shop in a physical store to enjoy the experience and 24% of consumers want to interact with products in-store before buying suggests that finding ways to blend the online and physical retail shopping experience should be top of mind.⁹

The increase in hybrid shopping means that a customer might try on an item in-store or research an item online before buying it in a brick-and-mortar physical retail store.

This means that digitally native brands should look to “showrooming” so potential customers can interact with products. On the other hand, a retail brand with any physical store presence should consider adding exclusive services or promotional events – online and offline – as part of their retail customer journey.¹⁰

Sustainability Still Sells

Two out of three consumers consider themselves to be “belief-driven buyers.” They want to know that they are supporting a small business or larger retailer that takes steps to reduce its environmental impact and operate sustainably.¹¹

In 2023, retailers must continue to find ways to reduce their overall energy consumption and emissions, as well as packaging waste. This not only looks good to consumers but also helps the bottom line.

This trend is particularly significant in relation to reverse logistics and product returns. In some of the most wasteful stages of the product lifecycle, returns generate harmful greenhouse gas emissions and increase retailers’ operational costs.

Returns Management (and its Impact on Customer Loyalty)

The ease of retail returns is now an essential factor driving customer loyalty and shopping decisions. Recent statistics show that 96% of shoppers prefer to buy from a business that provides “very easy” or “easy” returns.¹²

Large retailers are introducing choices to remove friction and create a contactless retail experience for the returns process.

In addition to being able to choose between when and where they buy and pick up items through Buy Online,  Pick-Up In-Store (BOPIS) and Buy Online, Pickup in Locker (BOPIL) programs or home delivery, consumers also expect that same choice when they return items, for example through Buy Online, Return In-Store (BORIS) options.

Meanwhile, retailers with tighter margins are either allowing customers to keep the product or charging for return shipping while still offering free in-store retail returns.

All retailers must keep in mind that as consumers navigate ongoing supply chain and inflation-related challenges and the number of returns continues to increase, customers will be looking for the cheapest and most convenient way to return and/or get a refund for their items.

Investments in reverse logistics technology will be key to success in 2023 and beyond.

Smart Lockers for Online Returns Management

While many are familiar with smart lockers for online order pick-up, customers can also use them to facilitate easy, self-service returns. The same parcel drop off lockers that make BOPIL possible can be used to streamline the whole returns process – no trip to the customer service counter required. And by using smart locker technology, retailers can easily balance capacity between pick-ups and returns as needed.

Using smart lockers or digital parcel lockers to return items is a self-service process that takes less than 30 seconds. It speeds up returns for customers and retailers alike, enables retailers to return inventory to store shelves quickly, and ensures that the customer can make the right purchase at your store.

Discover how our locker solutions can improve the customer journey and deliver a cost-effective way to streamline returnsby contacting a Parcel Pending representative today.

Sources:

1. Marr, Bernard. The Top Five Retail Technology Trends in 2023. www.forbes.com. October 14, 2022. https://www.forbes.com/sites/bernardmarr/2022/10/14/the-top-five-retail-technology-trends-in-2023/?sh=5f281e4c5beb
2. Direct Online Marketing. What is Social Commerce? Does it Matter in B2B? www.directom.com. March 21, 2022. https://www.directom.com/social-commerce-b2b/
3. Feger, Arielle. 5 retail trends that will shape 2023: social commerce, retail media, and more. www.insiderintelligence.com. December 15, 2022. https://www.insiderintelligence.com/content/5-retail-trends-that-will-shape-2023-social-commerce-retail-media-more?
4. Adobe Communications Team. A guide to retail customer experience and trends in 2023. www. businessadobe.com. November 11, 2022. https://business.adobe.com/blog/the-latest/retail-customer-experience-trends-2023
5. Ibid
6. Ibid
7. Shopify. Brands are using immersive retail to stand out from the competition. www.shopify.com. https://www.shopify.com/plus/commerce-trends/retail
8.  Adobe Communications Team. A guide to retail customer experience and trends in 2023. www. businessadobe.com. November 11, 2022. https://business.adobe.com/blog/the-latest/retail-customer-experience-trends-2023
9. Shopify. Brands are using immersive retail to stand out from the competition. www.shopify.com. https://www.shopify.com/plus/commerce-trends/retail
10.  Adobe Communications Team. A guide to retail customer experience and trends in 2023. www. businessadobe.com. November 11, 2022. https://business.adobe.com/blog/the-latest/retail-customer-experience-trends-2023
11. Marr, Bernard. The Top Five Retail Technology Trends in 2023. www.forbes.com. October 14, 2022. https://www.forbes.com/sites/bernardmarr/2022/10/14/the-top-five-retail-technology-trends-in-2023/?sh=5f281e4c5beb
12. Narvar. Narvar Research Finds Nearly 25% of Consumers Will Pay for Product Returns in Exchange for Convenience. www.prnewswire.com. October 31, 2022. https://www.prnewswire.com/news-releases/narvar-research-finds-nearly-25-of-consumers-will-pay-for-product-returns-in-exchange-for-convenience-301663371.html