Top Trends Every Retailer Should Know About in 2023
Top Trends Every Retailer Should Know About in 2023

For retailers & brand owners, this will be the year of placing customer experience at the core of the business and keeping the two connected at all times. 

Rising complexities due to the Covid-19 pandemic, the current economic crisis, environmental changes, and political dilemmas are increasingly influencing consumer purchasing behaviors; thus, instead of a single experience strategy, retailers will now have to experiment and reinvent with appropriate brand narratives, retail tech solutions, and product innovations - all aligning with their more significant brand promise.

Brand owners & retailers need to take a more realistic view of who they are serving, pushing past demographic or psychographic simplifications to think about customer personas – and, beyond that, how those personas show up differently, not just on various platforms but at other points across contexts as well.

Brand & Retail Experience Landscape in 2023:

The best brand experiences will come from understanding the entire customer journey and finding the right moment in that journey to create an emotional connection – not popping up everywhere but rather being strategically present in the right places at the right time with an experience that's relevant and represents the brand's story & message through physical, human and digital touchpoints.

In 2023, a great brand experience will be more about consistency and showing up where it matters in exciting ways that are also always meaningful, and useful and add value to customers and employees through newer practices. The guiding purpose of experiential retail is to create a community around the brand and drive greater engagement and organize innovative experiences that enrich shoppers. 

So, maximizing brand experiences will be about understanding and optimizing brand interactions that matter the most. And this depends on recognizing each brand experience as a brand expression – part of a narrative connecting with and articulating the brand promise. 

Omnichannel Shopping & Connected Experience

During the pandemic, consumers have become accustomed to e-commerce; this has been a prominent factor in letting brands provide an integrated phygital experience.

Consumers want the flexibility to research online but buy in-store or vice versa, as the distinction between the two has faded over the past few years. 

According to a recent study, 60 percent of consumers say they conduct online research before making a purchase, and 80 percent of the time, a consumer returns a product in-store and spends the refunded amount with the same retailer. This shows that retailers need to provide integrated experiences, leveraging the best of online & offline. The two worlds have to transact seamlessly with each other for a connected and truly personalized experience.

Connected Experience: 

Customers can expect retailers to be more digitally led with increased usage of digital components, displays with built-in touchscreens, interactive kiosks, and apps to offer an elevated experience. Converging the best of both worlds and offering a phygital experience will create impeccable customer journeys allowing retailers to unlock far greater agility across channels.

Great examples of a few brands that have cracked the code to find innovative ways of connecting with their tech-savvy customers by offering digital experiences: 

  • Try on virtual interactions by L'Oreal & Amazon.
  • Sephora's virtual artist guides customers in making decisions.
  • Ikea uses AR technology for accurate scale 3D projections of furniture for better visualization.
  • Lego perfects the interplay of physical and virtual. Virtual animated characters play with the physical sets for a new level of gaming experience. 

Innovative customer experiences will serve as the roadmap to increased satisfaction, sales, and post-sales experiences and, by extension, to augment customer loyalty.

Metaverse: 

The retail industry's eyes, much like many others, are now on the metaverse to create an authentic buying experience. By exploring the metaverse, a retail store can extend well beyond its real estate and offer a consistent experience within and beyond its walls.

Although the metaverse is still an evolving technology, several brands across sectors have already begun adopting it to some degree. According to a Gartner report, by 2026, 25 percent of people are expected to spend at least one hour per day in a metaverse to work, shop, learn, or even for entertainment.

Social Commerce

An emerging sector, expected to revolutionize and democratize the overall e-commerce landscape in India, offers buyers an experience of extreme convenience in making a purchase a lot more entertaining rather than scrolling through the same old product pages.

While still in a nascent stage, this space will continue to enjoy steady support from the newer generations, especially GenZs and millennials, to fulfill their appetite for customization. Through social commerce, retailers can bridge the gap by providing personalized offerings to specific target audiences. To that end, the social commerce market in India is poised to grow at high speed owing to the rapid adoption of social media platforms.

Most businesses are envisioning to include social commerce in their business expansion plans. According to Bain & Company, this platform which is a $1.5-2 billion market today, will be worth as much as $20 billion in the next five years.

Sustainability 

Sustainability seems like a simple concept on the surface, with everybody talking about it, but it hides an immense amount of complexity. Retailers can work on decoding it for every aspect of their business to differentiate themselves truly. Exploring sustainability could look like creating apparel with newer materials, developing refillable packaging, finding ways to recycle old products and materials, or exploring environmental goals effectively. The list is endless. 

Retailers, however, are at a disadvantage from the get-go because they operate businesses responsible for putting even more products into the consumer's universe. Sustainability is, therefore, much more of a quest for retailers than anything else, but what that quest looks like can certainly vary.

According to a Bain report, 60 percent of consumers in India are willing to pay a premium for a sustainable product, while 43 percent rank sustainability as one of the top five critical purchase criteria of packaged foods - indicative of increased consumer concern & interest toward the matter and the subject being the need of the hour for retailers.

Packaging is embracing joyful motifs as pandemic-weary consumers reach for brands that infuse play, community, and beauty into everyday living. While vibrant colors, attractive fonts, and interactive features cultivate a positive ethos, these must be paired with sustainable practices to justify the product's existence.

Some topline questions which can assist retailers in defining an approach:

  • What should we be doing on sustainability?
  • What can we do now that helps us stand out without being acclaimed as greenwashing?
  • How can we achieve a leader status in sustainability?
  • How can we make sure our sustainability investments drive ROI?
  • How can we use our brand purpose to drive considerable revenue and margin?
  • We have so many initiatives; where do we focus?

Retailers need to start small, start experimenting, gather all the know-how, and constantly explore newer technologies for their growth.

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