The 5 Biggest Retail Trends For 2023

Retailers and brands are emerging from what has been a three-year pandemic. Over the past years, retailers have been taxed and squeezed by supply chain challenges, inflationary pricing, economic uncertainty, and geopolitical factors.

In 2023, however, there is a more optimistic outlook and a greater emphasis on the customer shopping journey. A seamless experience and hybrid shopping are shaping the future of retail as retailers adjust to a new normal. According to One IBC, these are the top 5 retail trends that will have an impact on the industry in 2023:

1. Retail media network

Physical retail stores and websites are becoming increasingly important as sources of advertising for their vendors. Retailers can deepen their relationships with business partners by selling marketing space to vendors, which is a growing revenue stream for them. Ad space sales on websites, in-store displays, mobile applications, and streaming services will continue to rise as more retailers expand their offerings. Streaming TV, on the other hand, will see the most significant growth. “Retail Media is aggressively moving to streaming TV, capturing major brands’ attention and budgets,” said Andrew Lipsman, Principal Analyst of Insider Intelligence.

Chart: Digital advertising revenues in the USA (Source: Forbes.com)

The 3 largest retailers in the United States are pioneers in optimizing retail media networks. Amazon used its newly acquired Thursday Night Football streaming events to sell advertising space to its vendors and maximize its marketing efforts earlier on. If the potential merger with Albertsons goes through, Kroger’s partnership with Roku to sell commercials on the ad-supported CTV becomes even more powerful. Walmart has been collaborating with its vendors on retail media networks for many years and has created its own branded network called Walmart Connect. Advertising revenues, excluding website placements, will increase 38% to $6.5 billion in 2023. “This is the holy grail for advertisers,” Lipsman explained.

2. Social media sentiment monitoring

Social media sentiment monitoring is the process of gathering and analyzing data about how people talk about a retailer or brand on social media. Retailers who are active on social media can gain a better understanding of their customers’ sentiments, preferences, and attitudes toward their company and its competitors. Retailers who build a large following can use data and sentiment monitoring to better understand the consumer mindset and forecast trends in shopping behaviors or product preferences. Monitoring social media and expanding social commerce opportunities can result in high fan loyalty.

Monitoring social media sentiment can result in high fan loyalty

Because the hottest leads on TikTok today are people and influencers, not brands, the continued rise of social commerce presents a burgeoning opportunity for retailers and brands. Brands have yet to benefit. If retailers can secure followings similar to the top individual influencers, they will have a golden opportunity to figure out how to generate revenue from social media and drive future social commerce. Once retailers understand the TikTok model, it should be a huge source of revenue. With social commerce platforms like TikTok Shop, live streaming to showcase events and deliver personal online selling can leverage customer loyalty.

3. Hybrid shopping and seamless shopper journey

Retailers want to provide a consistent shopping experience across all channels, including online, in-store, mobile devices, social media, and live streaming. However, providing a comprehensive view of the shopping journey necessitates retailers integrating siloed data from every business function into a synchronized format that all groups within an organization can access, including merchants, marketing, store operations, digital teams, human resources, and finance. All consumer shopping data must be consistent and accurate; unstructured data must be parsed and merged with structured data so that decision-makers and automated processes can take appropriate actions.

Hybrid shopping is one of the top trends for retails in 2023

Various groups within an organization can collaborate and develop strategies relevant to the core market by synchronizing data in near real-time. Individuals and segmented groups of customers can benefit from precise personalization thanks to synchronized data. With Google phasing out third-party cookie data by 2024, retailers will need to ramp up efforts to synchronize the first-party data they have in their data warehouses in order to deliver a seamless, hybrid shopping journey.

4. Store design shifts and mixed-use spaces

Over the last two years, store designs have become increasingly important as retailers adjust store sizes and experiment with experiential retailing. Larger format stores, such as Walmart and Target, have experimented with smaller formats, such as Target Campus stores and Walmart Neighborhood Markets. Target, on the other hand, recently announced plans to invest in larger stores with 20,000 more square feet of space than the average store and new store design features. Many retailers are introducing new features to support new shopping initiatives, such as curbside pick-up, fulfillment from stores, and in-store pick-up. Ulta Beauty recently announced a store redesign that will emphasize the company’s beauty philosophy through merchandising and design elements.

Mixed-used space concept is favorable for big malls

Mall developers and community leaders are embracing the concept of mixed-use space, which includes shopping, living, dining, and other community spaces that cater to a specific market. Gravity, a business district in Columbus, OH, is being developed to cater to artists, social innovators, and entrepreneurs. As part of its Downtown Revitalization Initiative, New York Governor Andrew M. Cuomo recently announced a $26 million mixed-use development in Oswego to provide high-quality housing and commercial space.

5. Green consumerism

The year 2023 will see the rise of green consumerism. Repair, recycling, reusing, and thrifting will become more popular. Simply put, consumers will buy less and be more interested in learning about the product life cycle. Retailers have already begun to address this issue by including pre-owned items in their product offerings. REI sells pre-owned outdoor gear to its members, and lululemon has a Like New program. Levi has been working with Thread-Up for many years, and Walmart sells pre-owned items. Patagonia has been a pioneer in supply chain transparency, as have Everlane and Eileen Fisher. Companies that focus on sustainability will win as Gen Z earns more money and gains more clout in voting with their dollars. Pre-owned goods, recycling, and reusing are becoming more common and expected by consumers.

Green consumerism is trending in 2023

These 5 retail trends above are very important nowadays. Other areas of focus for retailers will be workforce reshaping (for example, achieving the proper balance of working on-site versus remote) and community as an investment and focus pillar. As the year comes to a close and retailers look ahead, the shopper journey remains front and center.