RETAIL PREDICTIONS FOR 2023 - PART 1
RETAIL PREDICTIONS FOR 2023 - PART 1
As we draw to the beginning of the year, it’s time to take a good look at the state of retail and how things can make progress in 2023.
Let’s take a look at various of the trends and developments within retail that may shape how we engage with stores over the next 12-months.
One of the most exciting new developments in the past year or two has been the emergence of the metaverse. This exciting immersive channel offers huge scope for brands and retailers providing engaging opportunities for their shoppers and customers.
We have seen a number of leading brands such as Dior and Nike introduce metaverse environments, starting to develop huge engagement and commercial opportunities. This is a scary new world for a lot of brands. Understanding the cost of entry, how to effectively use the space, what commercial returns they can expect, is very much an unknown quantity. As such, this is one of the most difficult opportunities for brands to navigate as we move forward.
Many brands are unsure when to invest in the metaverse. At present, there is no established format or environment, with many different brands and operators offering different platforms. For many it is an opportunity to become an early adopter and steal a march on their competitors. For many, it could be a money pit where you can sink millions of dollars into a new idea that just doesn't work. It will be fascinating to see how the metaverse and other immersive commerce develop over the next few years.
I believe that the metaverse can become another extension of digital commerce it will not replace everything else as many commentators suggest, but will become an interesting extension to go alongside websites apps and other online opportunities.
For me, one of the most exciting developments is how brands are starting to understand their different channels in what I call symbiotic retail. Marketeers have long talked about omni-channel which is used internally for marketing purposes. This highlights the combination of the different digital and physical channels that are available to customers and shoppers. So many brands have struggled to combine their different channels into effective and meaningful opportunities and solutions for their target audience.
And commentators often pitch channels against each other as though a shopper may only choose one. In reality every shopper uses multiple channels and will seamlessly move between them as they browse engage and purchase from a brand.
We have seen how companies like Nike introduced app usage that enhances the physical store experience. Shoppers visiting their House of Innovation stores can use the app to scan products to learn more and pay through the app. In addition, they can request to try on clothing in changing rooms and their correct size is automatically made available because it is known from app usage and previous purchases.
Likewise exciting new retailers such as Situ Live provide a physical experience for online sales creating immersive showrooms that enables shoppers to test an experience products within very realistic environment. After the demonstration, customers then scan a QR code which takes them to several website, where they can compare and buy. Effectively, Situ Live is a physical showroom for online sales.
Nike, Situ Live
This considered merging of different channels is critical for brands and retailers to deliver comprehensive solutions that allow shoppers to engage with them on their own terms and in their own ways. I expect to see this development and combination of channels to improve over the next year or two as more and more brands understand the value of the consistent touchpoints for the customers moving forward.
There is no New Normal
Another much talked about situation was the New Normal that many commentators suggested had appeared because of covid and the lockdown that closed physical stores. This misnomer led many to believe that there was the death of the High Street on the horizon.
As governments closed stores people were forced to go online to continue buying. This resulted in the rapid growth of various brands using Peloton as a good example. This connected workout solution using stationary bikes grew massively during Covid as people staying at home sought new opportunities for entertainment and exercise. Sadly the brand saw this as a natural continuous growth opportunity and instead we saw that the use and engagement with the brand dropped as people returned back to pre-covid behaviour.
Chart showing how digital retail sales are returning to the pre-Covid growth levels, after a spike during lockdown. Source: https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi
Chart showing how footfall in the UK is returning to 87% of pre-Covid levels. Source: https://policymogul.com/key-updates/22679/encouraging-improvement-to-uk-footfall-according-to-brc
Likewise during the lockdown and this growth and movement towards digital buying Meta, formerly known as Facebook, recruited over 10000 new staff. The CEO Mark Zuckerberg believed that this pandemic fuelled growth in digital would continue beyond the Covid lockdowns. This proved not to be the case and now he is making a huge number of staff redundant because we are finding that people are reverting back to their usual behaviour.
We didn't have New Normal, what we have always had is normal normal.
About Ian Scott
With over 20 years of experience within the Retail and POP sectors, Ian can provide a fresh perspective, always with the viewpoint of your shopper and customer in mind. By combining a global understanding of retail, combined with developing innovation and measurement of ROI, he can help you gain clarity on your retail strategy and help deliver actionable and measurable solutions.