What’s in store for 2023?
31/01/2023 | by Lucy Lefroy
“Retailers are doing what it takes to win in this time of rapid change” – Ian Geddes, Managing Partner for Consumer and Retail, Deloitte
Despite ongoing challenges still affecting day-to-day discretionary spending like the cost of living crisis, inflation and high energy costs, industry experts say a successful year ahead is possible with the right tools, planning and leadership.
Last week Deloitte hosted their Retail Trends 2023 webinar, and the takeaway was refreshingly positive. With a panel of industry experts and analysts offering their predictions and insights on the current state of play, four key trends for the future of retail were identified by the team and discussed:
- Unlocking value: retailers will focus on identifying, improving, and creating efficiencies across all areas of their business
- Experience innovation: retailers need to differentiate themselves in a competitive market by engaging with consumers, encouraging the growth of communities, and actively interacting with their brands by shaping the end-to-end experience with loyalty schemes, innovation in payment spaces and optimising product availability for a successful customer journey
- Planet & society: retailers are adopting business strategies that improve sustainable practices and work towards their net zero commitments
- People & leadership: attracting and retaining the best talent is paramount, and retailers will need to organise their approach to recruitment and retention, and consider what really matters to a new generation of retail employees
Customer loyalty helps to create a sustainable and profitable business. Repeat customers are more likely to make larger purchases, refer friends and family, and act as brand advocates. During turbulent times when value plays a big part in the decision making process, retailers need to be focussing on ways to improve customer loyalty.
“Buying customers is a big thing to do these days; you have to keep the ones you’ve got. Differentiating how you encourage loyalty, whether it’s a scheme or through engagement, really works and is the sort of gem that will unlock value and ensure that you are on the right side of the winners versus losers line.” – Helen Dickinson OBE, Chief Executive Officer, British Retail Consortium
In times of significant change and economic uncertainty, the best organisations are maintaining focus on their people and their wellbeing. Driving positive momentum by giving staff the tools and data they need to provide a better service means happier, more engaged staff.
“Retail is about people, and I think we have learned over the last three years that putting your people first delivers a much better outcome for customers. Motivated and valued colleagues serve customers better, and customers will shop with you more.” – Simon Roberts, CEO, Sainsbury’s
Tools of the trade
Retailers need to employ more technology to improve efficiency and get more from their stores this year. Roles have changed and new tasks are taking over the day-to-day, and retailers need to provide the right tools to support the changing environment and to empower sales associates to excel everyday.
According to an IHL Group report (January 2023), top technology priorities for 2023 for all retailers include the following:
- 54% personalising the customer experience
- 52% Inventory visibility
- 47% empowering store associates with better tools
- 42% refreshing the POS infrastructure
“Customers don’t care if they are shopping in a brick and mortar store, digital channel, or an app… they see it all as one single organisation. They are expecting a single customer experience and customer service level, and we need to build and integrate a model to be able to execute this properly and maintain this customer engagement going forward” – Jose Maria Alvarez, Director of Corporate Development, Inditex
Crucial for success in any industry, innovation helps companies remain competitive by constantly improving and updating their offerings. This allows retailers to differentiate from competitors, improve the customer experience, and stay ahead of industry trends and changing consumer demands. Without innovation, retailers may struggle to remain relevant and competitive in the marketplace. Innovative practices in retail are constantly evolving and leading to the development of new products, services, and processes that are having a major impact on customer engagement. Technology such as mobile apps and AI-powered personalisation, the implementation of sustainable and socially responsible business models, and the introduction of unique and experiential in-store concepts are leading the way in this space.
“Innovation means you will become more relevant for your customers, and if you can use some of the innovations in that space to create deeper loyalty, then that helps you to come out in 2024 and move forward.” – Jo Whitfield CBE, Founder, The Grocery Girls
Priorities for the year ahead
Overall, retailers will need to be adaptable, innovative, and people-focused in order to succeed in 2023 and beyond.
A summary of some of the following priorities for the year ahead identified by the team at Deloitte’s:
- Engage your customers where they spend their time – on digital channels as well as in-store
- Empower leadership and personal accountability throughout your organisation
- Maximise automation to improve staff productivity across all store touch points
- Ensure your loyalty propositions are aligned to the wants and needs of your core customers
“I’m more optimistic that consumer confidence will increase in the second half of 2023. I think the real priority is about how you manage the impact of the downturn, while not letting go of some of those longer-term foundations that need to be built, so that a business can take advantage of opportunities when the recovery really does come.” – Helen Dickinson OBE, Chief Executive Officer of the British Retail Consortium