Forecasting The Future: Retail Trends

By Marianne Wilson

The “perception” of recession and heightened expectations for online and in-store shopping are among the trends expected to impact customer behavior in 2023.

“We foresee continued impact from economic challenges as consumers are heightening their expectations for personalized, hybrid and omnichannel shopping, and their redefined focus on wellness for themselves, others and the planet,” said Kathy Risch, senior VP, consumer insights and trends at national sales and marketing services provider Acosta.

The company has identified several opportunities and challenges for brands and retailers as they navigate today’s dynamic and uncertain consumer marketplace.

Here are Acosta’s predictions for retail 2023.

1Recession or Not, Perception is Reality

The ongoing state of inflation, combined with other economic challenges, has resulted in nearly half of all shoppers believing the country is in a recession, despite a lack of consensus among economic experts.

“When shoppers believe we are in a recession, they will behave as though we’re in a recession,” said Risch. “They are doing less, trading down, practicing smart, conservative and creative behaviors that are likely to last.”

Risch’s analysis is reflected in Acosta proprietary shopper insights, which revealed that 61% of consumers are eating out less, 52% are spending less on entertainment and 46% are saving less

2Retail Experiences That Surprise and Delight, In-Store and Online

Shoppers have three key expectations in 2023 for their in-store shopping experiences: enjoyment, convenience and value.

Seamless omnichannel shopper experiences are table stakes and retailers will want to bring in-store experiences online and digital experiences into the store. Related insights include:

• Shopper experience matters – both digital and physical – it isn’t just about price and assortment.

• New retail formats are being tested to keep customers coming back, building loyalty based on experience as well as product selection.

• Tech-enabled in-store design will encourage discovery, browsing and purchasing — from QR codes throughout the store to smart screens that share product reviews when an item is selected from the shelf.

• Connectivity increases, with 5G adoption expected to triple in retail stores by 2024.

• Smaller format big box stores are opening to support convenience, offering specialized services, techenabled stylists and restaurants.

3Personalization Rapidly Evolving

First-party retail data is becoming more targeted to the individual shopper. Value, discovery and trial can be provided on a personalized basis to the shopper based on new technology, including AI, and the retail media explosion. By 2024, U.S. retail media ad spending will exceed $60 billion. Instacart, Walmart and Amazon are in the lead, with others quickly following. Retail media will employ technology for in-themoment deals in aisles.

Nearly all (90%) of grocery sales still happen in stores. There is a $1 trillion opportunity for advertisers to target more accurately with the right data, including in-store AI technology such as electronic shelf labels, which provide nearly limitless ad inventory and inform shoppers of proximity value offerings.

4Committing to Collective Wellness

In 2023, wellness will assume a holistic, comprehensive position for shoppers – extending from personal wellness (health and happiness) to the family’s health and wellbeing and to the earth and animals.

In related insights, retailers will provide more in-store clinics and other health services — currently a $4.4 billion business.

On a global level, consumers are concerned about sustainability and the concern will escalate in the U.S., with 69% of U.S. consumers rating sustainability as important, regardless of age/gender.

5Transforming into a Hybrid World

While the hybrid evolution was underway in some channels, COVID moved the needle further, faster and deeper, resulting in a new hybrid world. Shoppers will expect brands and retailers to reflect this “new normal.”

Today, nearly half of all shoppers buy many types of products both in-store and online, such as:

• Apparel – 57%;

• Beauty care – 48%;

• Electronics – 44%; and

• Home & kitchen – 50%.

Risch said that brands and retailers will need to continue to make significant shifts in how they provide value, quality, entertainment, service and convenience to shoppers in 2023.

“The most successful organizations will expediate the seamless shopping and branding experience, also understanding that consumers want to make informed, smart, values-driven choices for themselves and their families,” she said.