The retail environment is constantly evolving. To compete with the big-name box stores out there, small businesses should keep themselves apprised of the latest retail trends in 2023. One advantage for small businesses is the ability to change and adapt more easily. Monitoring these trends in retail will keep you ahead of the competition and busy with happy customers.
1. Retailers Are Offering More In-store Return Options
Many of today’s online shoppers use both online and in-person channels for the same purchase. And this impacts retailers’ reverse logistics processes. For starters, online purchases are more frequently returned than in-store purchases—30% for the latter compared to 10% for the former, according to Deloitte.
It’s a costly problem—each return can cost 15–30 cents for every dollar in handling. Plus, it’s not going anywhere. As many as 81% of retailers believe returns will increase in the coming year, according to a survey from Contentstack.
Many of those consumers turn to in-store channels to make those returns, as it speeds up the refund process and also eliminates return shipping costs and hassle. Some retailers have turned to “return bars,” which essentially act as a station where shoppers can bring their returns to be packed and shipped for them. These bars can reduce return processing costs by more than 20%, Deloitte reports.
- What Is Returns Management: Definition & Strategies
- How to Write a Retail Return Policy (& Free Templates)
2. Online Shoppers Make Bracket Purchases
As an added hurdle to returns challenges, the practice of making “bracket” purchases is on the rise. This is essentially when someone purchases the same product online in a range of sizes, colors, or variants. They intend to try the items at home and keep just one or a few while they return the rest. According to Deloitte, just under half of consumers partake in this retail trend.
3. AI Is Becoming Increasingly Important
Retail technology only becomes more important with time. As these developments advance, technology becomes more accessible to businesses of all sizes. One such technology that has made a significant impact on the retail industry is artificial intelligence (AI).
AI in retail has a lot of use cases. In fact, according to Square’s 2023 Future of Retail report, 73% of consumers actually prefer local retailers to automate at least one task in their purchase journey instead of using staff, and 44% want an automated tool to get more product information and availability.
Here are a few retail industry trends as it relates to AI:
- Understanding returns and optimizing the customer experience to reduce returns. This includes things like 3D product photos, which Deloitte reports can lead to a 40% decrease in returns rate.
- Improving analytics to ensure more accurate data for more accurate and efficient forecasting and reporting. This also improves marketing, product recommendations, and more.
- Automated fraud prevention that identifies high-risk transactions, payments, or customers.
4. Social Commerce Continues to Grow
Social commerce, or the practice of selling via social media channels, is next on our list of current retail trends to watch. Social media has been an important part of retail for a while, and it has evolved to offer in-platform shopping experiences—reducing friction and making it easier for retailers to drive online sales via social media marketing.
Per ecommerce statistics, more than half of consumers aged 26–41 years have made at least one purchase on a social platform. Besides that, Deloitte reports that 60% of Gen Z and 56% of millennial consumers had planned to use social media for holiday shopping in 2022.
Offering social commerce to your customers isn’t as difficult as you might think. In fact, many ecommerce platforms offer integrations with Facebook, Instagram, and other top social channels to simplify the process.
Jewelry brand Hunterhue, for example, has added the Instagram Shop app to its Shopify website, so its followers can make a purchase directly from social media without having to visit the website.
Start selling your products through social platforms:
5. Stores Are Introducing New Technology
Omnichannel consumer trends continue to challenge retail stores to keep up with digital behaviors. One answer to that is technology. Of retail executives surveyed by Contentstack, 71% anticipate in-store technology to grow in the coming year.
So what exactly are those technologies? Self-serve in-store options, such as companion mobile apps and self-checkout kiosks, are improving the customer experience while providing retailers with richer data. Integrated inventory management systems are turning stores into fulfillment centers for click and collect shoppers. And, counters and other tools to determine foot traffic are providing more than just total store visitors.
The options are truly endless, but we’re approaching a time when retail businesses of all sizes can’t ignore the opportunities when it comes to in-store retail technologies.
6. Retailers Plan to Expand to New Selling Channels
According to Square, 81% of retailers have plans to expand the number of channels they sell on. As much as 43% of revenue comes from online channels. However, this isn’t making the brick-and-mortar shop obsolete. Quite the contrary, as we’ve seen with other retail trends on this list.
Here are some resources to help you explore other selling channels:
- How to Sell on Amazon: A Beginner’s Guide
- How To Sell on Etsy
- How to Sell Wholesale to Retailers Online
- How To Get Your Product in Target
- How To Sell on Walmart Marketplace Successfully
7. Stores Are Having Inventory Challenges
As retailers accommodate new consumer behaviors and expand to new channels, emerging retail store trends include challenges when it comes to managing inventory. According to Contentstack’s survey, “store inventory accuracy” is the top challenge when it comes to managing the digital aspects of the business.
There are other inventory-related challenges ranking high for retailers in 2023 as well, including inaccurate inventory data and visibility.
This means it’s more important than ever to utilize the best inventory management software for your needs, as well as a POS with inventory capabilities. Syncing these systems up with both your online and in-store channels will ensure real-time data syncing and updates.
8. Prices Are on the Rise
With post-pandemic inflation putting a squeeze on discretionary spending, retailers are looking for ways to recuperate from these losses. According to Square’s report, 44% of retailers plan to raise prices if necessary to survive a potential economic downturn.
While this is often not recommended as the go-to solution, global economic circumstances may allow more leeway for retailers. Nearly nine in 10 consumers say they’d be understanding about rising prices from their local retailers, and even 38% would be more likely to shop at a smaller business to support them during challenging times.
Trends in the retail industry are constantly changing, and sometimes it seems the industry is changing faster than ever. When big box retailers can’t keep up, small business retailers have a great opportunity. Keep these trends in mind when starting a new retail business or looking at ways to grow one you already have.