Top 14 Retail Trends to Watch in 2023
Designing hybrid experiences, combatting the Great Resignation, and supporting the endless aisle; all that and more in our top retail trends for 2023.Read the Blog
As a self-made billionaire and the founder of multiple internationally-known enterprises, Richard Branson is intimately familiar with the nature of industry disruption and the qualities necessary to survive such periods of upheaval.
“Every success story is a tale of constant adaptation, revision, and change,” Branson famously said. “A company that stands still will soon be forgotten.”
This is especially true in the retail industry, an industry characteristically marked by change. First, companies like Sears, Roebuck, and Company came along and disrupted the industry with catalogs, precursors to the concept of home shopping. Shopping malls and supermarkets sprung up to displace small, family-run stores and greengrocers. With the advent of the Internet came the introduction of ecommerce, which turned the retail industry on its head, forcing retailers to reevaluate everything they thought they knew. Retailers now find themselves in another epoch of disruption, this time defined by Amazon’s market domination.
“Every success story is a tale of constant adaptation, revision, and change. A company that stands still will soon be forgotten.”
But retailers are a resilient lot. Those committed to success and survival are ready and willing to face any retail challenges that might come their way and adapt their business strategy to best suit both their bottom line and the needs of their customers, lest they be forgotten.
As a retailer, you’re probably already familiar with the five challenges in the retail industry; you might’ve even experienced some yourself. Here are five solutions to those challenges that you can implement to better maintain your relevance and cement your place in the market.
1. Challenge: Retail employees can’t see a future for themselves.
As any retailer knows, low engagement and high turnover are two of the biggest challenges in the retail industry and can have a major effect on the overall success of your business. In fact, only 17 percent of store managers feel their employees are adequately engaged, according to WorkJam’s Factoring People into the P&L Equation, and 92 percent of managers agreed that reducing turnover by as little as one associate per month would improve profits.
There are a number of reasons for this industry-wide malaise: low compensation, poor benefits, frequent and unexpected schedule changes, dull, repetitive work, poor training, few opportunities for advancement—the list goes on.
Solution: Make your business a more appealing place for your employees.
Put to rest the idea that “retail is a dead-end job” by turning your stores into a place where employees want to be, rather than have to be. Beyond obvious fixes, such as higher wages and better benefits, there are small but significant changes you can make to attract new associates and keep existing ones:
- Invest in more comprehensive training content, especially content that turns training into a fun, enjoyable process;
- Regularly recognize and reward associates who make the effort to go the extra mile;
- Invest in tools and technology that makes it easier for associates to do their jobs;
- Consistently challenge associates to take on new tasks and think outside the box;
- Provide managers with tools to simplify scheduling and empower employees with software that offers clear guidance on how they can increase productivity;
- Invest in employee development and instill your workforce with a sense of purpose.
2. Challenge: “Millennials are killing [insert industry here].”
If headlines are anything to go by, Millennials are singlehandedly responsible for the death of everything from casual dining chains to homeownership, but the reality of the situation is a little less dire than the media would have you believe. Although the way Millennials shop has irrefutably changed the retail landscape, they have more in common with previous generations than you might think—for example, 53 percent of Millennials still make the majority of their purchases offline, according to CouponFollow’s Millennial Shopping Report.
This fixation on Millennials as the death knell to the retail industry, amongst others, suggests misplaced concern. Certainly, Millennials are affecting the way organizations operate, but alone they are not solely responsible for the “death” of the organizations resistant to change. Instead, Millennials are forcing retailers to reevaluate their business models and adapt accordingly. Retailers that struggle with this shift could likely do more to understand and cater to the different segments of their customer base.
Solution: Listen to your customers.
Use customer data to your advantage by investing in tools that utilize advanced data analytics to help you better understand customer demographics and provide dashboards that summarize data patterns for faster decision-making. If you monitor the shopping habits of different customer demographics, behavioral patterns will start to emerge; you can use these patterns to more effectively market to those segments with personalized campaigns. Also, ask your customers for honest and specific feedback and be on the lookout for more creative and interesting approaches to surveying than the standard customer satisfaction questionnaire listed at the end of their receipt. Change your survey questions so that they reflect what your customer cares about, rather than what your marketing department cares about. There are many solutions available that can help you collect, analyze and act on customer feedback.
3. Challenge: Conversion rates for mobile remain low.
Even though almost half of all visits to retailers’ sites come from mobile, only 36 percent of purchases actually take place on mobile, according to Monetate’s Ecommerce Quarterly report. Instead, customers prefer to make purchases via desktop, and it’s easy to understand why—desktop enables customers to view larger product images and typically has more streamlined navigation and a less complicated checkout process. Another contributing factor is that when customers go to many retailers’ sites via mobile, they’re automatically shown the desktop version, which can look clunky and ill-formatted and can make the shopping experience even more frustrating.
Solution: Develop a mobile application.
An aesthetically pleasing, easy-to-use mobile application is one way to take advantage of mobile. You can even make the checkout process more convenient by integrating with third-party online payment systems like PayPal, Apple Pay, or Venmo to close the deal with customers. Keep in mind that it’s important to integrate your mobile app with an existing ecommerce or customer relationship management system for a cohesive omnichannel experience for customers.
Developing your own app doesn’t have to be a major undertaking. There are tools on the market that put the power to build a custom app tailored to your customers’ needs directly in your hands, all without the need for additional code development.
4. Challenge: Consumers have gone multi-channel and expect a seamless experience.
Despite customers taking full advantage of brick-and-mortar stores and ecommerce, 46 percent of retailers still deliver poor customer service experiences, according to Digital Doughnut’s 2015 Multichannel Digital Marketing Report. Although it’s a concept that’s been around for some time now, omnichannel continues to be one of the biggest challenges in the retail industry for many businesses, which is a serious issue.
Say, for example, that a customer goes to your online store to check whether an item is in stock at their local brick-and-mortar location. If your online store doesn’t have an accurate account of that store’s onsite inventory and mistakenly reports that the item is in stock, your customer will have made the trip out only to discover that it’s actually unavailable, resulting in the loss of a potential sale and an overall negative customer experience.
Solution: Implement a centralized multi-channel management system.
If you haven’t already looked into platforms that merge in-store, digital, and back-end operations, start doing your research now. The right system can greatly simplify day-to-day operations for your business, equip employees with up-to-the-minute product, customer, inventory, and order information, and ensure that the customer always has a truly universal experience. Certain product suites even go the extra mile to make cross-channel scenarios as efficient as possible by providing the user with a single interface for centralized management, a platform for customer loyalty rewards program management, and the ability to automate workflows across channels.
5. Challenge: It can be difficult to maintain customer interest.
As a retailer, you’re probably already well aware that even if you do everything right—you constantly refresh stock with new and exciting products that are priced to sell, your online and in-store displays are cohesive and aesthetically pleasing, and your staff is energetic and provides quality customer service—it can still be difficult to maintain a consistent following. With so many options in both the physical and digital worlds, it’s truly a customer’s market, and consumers sometimes require an extra push to convince them that your business is worth their devotion.
Solution: Incentivize customers with promotional offers and loyalty programs.
Even if your products truly are priced to sell, there’s always room for improvement. You can use analytics to determine when and why customers lose interest — high shipping costs, lack of consistent product availability, etc. — which enables you to fix the specific problem. For example, nine out of ten customers rank price and value as the driving factor behind loyalty to specific retailers, according to the International Council of Shopping Centers’ survey on brand loyalty. Regular promotional campaigns that promise deep discounts are a great way to make sure customers get the most for their dollar; certain software platforms can help you determine how to effectively target campaigns and track them to provide insight into their success.
Once you’ve acquired a loyal following, further incentivize your customers with a loyalty rewards program that’s easy to understand and flexible. Consider implementing a rewards system that uses a tier system or capitalizes on a strategic partnership to amplify your customers’ earning opportunities. Optimize prices with analytics so that loyal customers get the best price no matter whether they purchase in-store or online. To reduce operational stress on the back-end, look into tools that make it easy to define point redemption rules to meet your goals and to monitor loyalty balances, enrollment information, and customer preferences. Leverage analytics to determine customer browsing habits and store traffic to better position merchandise for higher sales.
Don’t let these and other retail challenges slow you down; with the right operational tools, you can increase employee productivity, streamline back-end processes, and increase your earning potential. Start a conversation with Hitachi Solutions to find out how we can get your business on track to success.
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