Retail Challenges and Opportunities for 2023
By Louise Roches, Director of Customer Solutions at Quantanite.
Retail was one of the industries most challenged by the Covid pandemic. Almost all non-essential retail had to close and wait it out. Some retail sectors – such as department stores – may never recover. But 2022 has largely seen a return to normal activity for most companies in this sector. As we move into 2023, what are the main challenges and opportunities facing retail brands?
I believe there are several. Of course, this can be refined further because fashion retail is distinct from buying your groceries, but there are some very important trends taking place across retail that are creating both challenges and opportunities, depending on the approach each company takes to these trends.
Omnichannel
For years retail companies have talked about omnichannel as an aspiration, but now customers really want to see it happen. They don’t want to shop anonymously in-store and yet have a completely personalised experience online. They want to be able to switch easily between the online and in-store experience and know that the experience on both is equally good.
Physical Supports Online
This is connected to the need for omnichannel but is a very visible and helpful sign that in-store supports online. For retailers with a strong branch network, it can be useful to encourage delivery and collection from stores in addition to returns. It simplifies the supply chain, and it gets online shoppers into stores. Shoppers that buy in-store and online are far more valuable than customers only using one channel.
Payment Flexibility
Look at the recent Black Friday news from the US. Black Friday sales in 2022 were up 2.3% compared to last year, but most notable was the 78% increase in buy-now-pay-later use in the week of Black Friday compared to the week before. Many customers want to use these services – just accepting cards isn’t enough.
Experiential Stores
Why should people go to your stores? Is there a reason that goes beyond shopping alone? Some retail companies are starting to think of their in-store space as entertainment – a place customers want to go not primarily for shopping, but it is likely that sales will happen. Lululemon gives free weekly yoga classes inside their stores. People go for the community and will not only feel closer to the brand, but they are likely to buy something too.
Marketplaces
The payment app Klarna is also a marketplace. Retailers using their payment service can offer their products directly on the Klarna app, creating a new shopping environment with thousands of products where everything is available instantly using the Klarna buy-now-pay-later service. We may need to start asking ‘what is a retailer’ if the payment services are now becoming the destination for shoppers.
These are all important trends and challenges, but the underlying goal is to connect the shopping experience across all the various channels. Customers can now buy from social media apps, from payment marketplaces, online from a retailer’s app, and also in-store. Retail brands need to be connecting these experiences together and learning more about how and when their customers like to buy – because most of us use different channels for different reasons.
Change is coming for retail in 2023 and customer expectations are higher than ever, but almost all these challenges can become opportunities. It all depends on your approach and ability to plan ahead and think strategically about what your customers really need.
For more information and case studies on how Quantanite has worked with eCommerce and retail brands, please click here.
