Retail Trends 2023
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May 3, 2023Retail Trends 2023
Although we are facing economic headwinds, multiple tailwinds including Artificial Intelligence (AI), retail media, the transition to renewable energy and the return of demand for physical stores are laying new foundations from which retailers can grow their businesses in the year ahead.
Unlocking Value3
The reality of ongoing cost pressures means that retailers are having to make difficult decisions about prioritising capital allocation. Therefore, we expect to see a renewed focus on performance improvement in the year ahead. Specifically, we predict that retailers will focus on identifying, improving, and creating efficiencies across all areas of their business, whilst also looking to maximise the value of their available assets. This approach will allow retailers to unlock the true value of their business, creating an environment that allows for profitable sustainable growth.
Experience Innovation
In the year ahead, we will continue to see innovative technology and business models serve changing consumer behaviour across every aspect of the customer journey. Retailers will differentiate themselves in a crowded, competitive market by engaging directly with consumers, encouraging the growth of communities, and actively encouraging interaction with their brands. Elsewhere, the ability to communicate and serve consumers where they spend most of their time means that we will see more retailers focus on social commerce and gaming as a growth opportunity. Likewise, the demand from consumers for physical experiences will force retailers to offer immersive, technology filled stores as standard.
Planet & Society
The success of the retail industry in the year ahead may come to be defined by how retailers manage to navigate some of the most serious and complex issues we face. Whilst rules and regulations around everything from emissions to the ingredients in our food mean that retailers have a legal responsibility to act on these issues, there is actually a strategic advantage to be had, with major growth opportunities available in these spaces. We predict that 2023 will be the year when retailers adopt business practices that shift the dial on their net zero commitments, finally making their (sometimes) lofty targets seem achievable.
People & Leadership
In a time of significant change and economic uncertainty, the best organisations maintain a laser focus on their people and their wellbeing. At its core, retail is a people business, employing millions of people across the globe. At the sharp end of retail, if workers don’t feel fulfilled or looked after, customer service suffers. But the demands from employees are changing and retailers will have to innovate their approach to recruitment and retention, considering what really matters to a new generation of retail employees. At the same time, strong, empathetic and purposeful leadership will be needed to navigate new ways of working, challenging decisions on cost and delivering on net zero ambitions.
Artificial Intelligence – the most disruptive trend for 2023?
Throughout our 2023 trends, it is clear that artificial intelligence has the potential to cause major disruption in the retail industry this year. Whether it is increasing productivity, reducing the time to launch new products, providing age verification at self-checkouts and click and collect sites, disrupting the creative process, or defining the skills required for future retail workers, AI will be something that retailers have to get to grips with sooner rather than later.
So who better to ask about the potential for AI than AI itself? We asked ChatGPT “how will AI impact retail?” and were astonished by the immediacy, and accuracy of its answer:
