What's Ahead for Retail in 2023?

2022 was a whirlwind year for retail - supply chain disruptions fueled overstock and out of stock scenarios, warehouse operations expanded and contracted, and inflation and cost of living increased impacted consumer behavior worldwide. The difficulty most brands faced in weathering last year's various post-COVID economic storms demonstrated the importance of having a reliable industry forecast to prepare for what lies ahead. In that spirit, we've compiled some predictions and advice to help our fellow retailers successfully navigate some potentially tough terrain in 2023.

Industry Trends for 2023

More enterprise fashion brands will start selling on Amazon. Gap’s onboarding to eCommerce giant Amazon in late 2022 came as something of a surprise given that it already has a well-developed eCommerce channel. While other flagship brands have had mixed results in joining the marketplace, it does give Gap an additional path for diversifying their sales and distribution channels, and notably, the ability to deliver orders within two days under the Amazon Prime framework (Gap offers 2-3 day shipping for its Icon Members). Other enterprise brands may become sellers to achieve this capability as well, and Gap’s main competitors may find it worthwhile to join simply to remain visible in any space where Gap is selling.

QSR marketplaces will continue to draw in bigger retailers. QSR marketplaces like Doordash in the US and Wolt in Europe have been expanding the on-demand local food delivery concept to retailers, drawing SMBs and even enterprise brands. This model effectively moves QSR marketplaces toward the one-stop-shopping model that has been so successful at Amazon, with the added perk of an in-box solution for on demand delivery for merchants. As we’ve seen QSR companies become vital for restaurants to remain relevant, we may see the same phenomena as these company’s CPG merchant roster grows.??

Brick and mortar will remain strong. Brick and mortar stores will continue their triumphant post-COVID rebound, and inflation will continue to play a key role in this.. With budgets stretched ever-thinner, consumers are less willing to take risks on purchases and will opt for more frequent visits to the store to try out items in person. This year, we saw consumers forego big tag items while continuing to buy affordable luxuries such as perfumes, soaps, and candles - items that one will want to arrive to the physical store to sample. Smaller discretionary budget also means that ordering multiple sizes will no longer be a feasible online shopping method for many. This, coupled with the increasing incidence of retailers charging for returns, will drive more and more shoppers into the store.?

Brands and malls will upscale phygital offerings. Buy online pick up in store has become a staple offering at a majority of enterprise brands since the early stages of the COVID pandemic, and responding to the sweeping changes in consumer behavior that emerged during and after the pandemic are a strategic focal point for all retailers. Retailers will continue to reach for new and interesting ways to appeal to? customers, and new advances in omnichannel technology will be front and center as retailers innovate. We will see wide adoption of push notification ads that arrive to consumers’ mobile devices while they are in the store. We’ll also see an uptick in the implementation of self checkout options that allow shoppers to skip the register and conduct the in-store shopping experience from their mobile.?

Retailers will continue to struggle with overstock inventory. While much of the world has gotten into a new normal in the post-COVID era, key centers of the retail supply chain are still facing disruptions from lockdowns and materials shortages. Without intervention, warehouses will continue to fluctuate between out-of-stock and overstock - situations that are equally costly.?

Getting Ahead: Retail Playbook for 2023

Know your marketplace. Retailers looking to grow their customer base or expand delivery methods by participating in local or global marketplaces must be wary of what participation in these spaces will mean for their data. Data has never been more essential for brands to succeed - having access to the finer points of transaction and consumer data is as essential as brand visibility and fulfillment capacity. When it comes to marketplaces, brands need to understand the fine print when it comes to data.?

Find strength in unity. In multi-channel operations, the best insurance against the uncertainties in the global supply chain is gaining better tools for inventory visibility and control. Retailers need access to their entire store and warehouse network at all times, with the ability to sell and dispatch from any location. Fortunately, the digital age has a bevy of solutions for connecting and balancing inventory. But inventory management alone will not carry retailers across the goal line - retailers should look for solutions that will enable them to fulfill orders across channels.?

Embrace technological adaptions. Innovation is getting easier. Traditional retailers were notoriously diffident when joining the eCommerce revolution of the early 2000s. Given the immense cost of establishing eCommerce channels in addition to their existing brick and mortar operations, one can hardly blame the industry for being gun shy when it comes to adding even more technology to these channels. But adding new capabilities is no longer the high-cost, time-consuming project it once was. Progressive API systems like Dropit’s allow retailers to enhance their processes by integrating into their current technology stack. Retailers who need to build up their hybrid shopping experience or expand their delivery methods should be confident that implementing these innovations should no longer require expensive new technologies or heavy time commitments.