Preparing for Tomorrow: Three Trends Shaping Retail in 2023
By Ellen Brune, Head of Global Strategic Accounts, AutoStore
The past few years have proven to be volatile on several fronts in the retail sector, from the pandemic to the ever rising cost of everyday items. This trend is expected to continue into 2023, signaling that now is the time for retailers to prepare for how to best serve consumers in the coming year.
In 2022, we witnessed a continued ramp-up of online buying by consumers who have become accustomed to receiving goods delivered either directly to their doorsteps or available for curbside pickup – a fact that is especially true for grocery. According to the United States Census Bureau, quarter three of this year saw a 10.8% increase in e-commerce sales over the third quarter of 2021.
Despite the popularity of online shopping, retailers would be remiss to put all their eggs in the e-commerce basket. Consumers want choices; more than that, they want an experience. If retail is to thrive in the coming year, a fundamental mindset shift is required, otherwise buyers will take their shopping elsewhere.
In 2023, e-commerce will remain a core component of market strategy, while retailers will need to emphasize in-store experiences and how to resolve last-mile obstacles.
1. Online is Here to Stay
If there is one thing we learned from the pandemic, it is that online shopping is a viable and crucial component of any company's market strategy. While COVID-19 accelerated e-commerce's rate of adoption, it is clear that online shopping is here to stay.
Consumers have become comfortable navigating the digital environment to acquire a broad range of products, whether it's a new pair of shoes or grocery list items. Now that this shift in buyer behavior has occurred, it will be impossible to reverse it. This means retailers must rethink their approach to e-commerce as a long-term element of their business strategy. Those who fail to adapt and implement core infrastructure to support e-commerce now will quickly fall behind in winning and retaining customers.
2. Retailers Need to Rethink In-Store Experiences
Although e-commerce is not going away, neither are brick-and-mortar facilities. Both platforms are important for attracting and maintaining customers. There is no "one size fits all" shopper. Retailers must realize that the consumers of tomorrow are omni-shoppers, meaning they will expect exceptional service both online and in-store.
Stores will have to give customers a reason to come into their physical locations. Simply having a product in stock is no longer sufficient. Because of that, retailers will benefit if they can get creative about how they service customers in-store and what experiences they intend to offer.
3. The Last-Mile Puzzle Remains
The last mile has long been a pain point for logistics operations, but the pressure to find the best solution for closing the gap between customer and product will become even greater.
In-store experiences that bring customers directly to a facility easily eliminate the delivery issue. For those shopping online, however, retailers must determine a winning strategy to successfully bring products to doorsteps.
There is no clear answer to this problem. Whether it’s deploying drones, hiring gig drivers, or perhaps implementing driverless technologies, retailers will need to select the right option(s) to ensure fast, reliable delivery to customers.
E-commerce will take its place as a permanent component of market strategy, but customers will be watching to see which retailers come forward with compelling reasons for them to travel to physical store locations.
Summary
As we look to 2023, it will be those who heed the lessons of years past who will find success. E-commerce will take its place as a permanent component of market strategy, but customers will be watching to see which retailers come forward with compelling reasons for them to travel to physical store locations. Despite all this, solving last-mile transportation will remain crucial. It will be intriguing to see how organizations will adapt.
The State of the Retail Industry 2023
JAN 2023
Ellen Brune is Head of Global Strategic Accounts at AutoStore, the world’s leading warehouse automation company. Prior to joining AutoStore, she served as GM – Integrated Storage Solutions, Intelligrated at Honeywell and Director – Emerging Technologies and Product at Walmart. She holds a PhD in Chemical Engineering from the University of Arkansas.