Retail Trends to Watch During 2023 Sector Revamp

The way we interact with our favorite retail brands has transformed over the past few years. After the pandemic upended the retail industry, economic turbulence now bites at consumers’ pockets. Retailers have had to get creative in order to drive engagement, with a recent Forrester report revealing that 75% of businesses are experimenting with emerging technologies in order to create new digital experiences for consumers. Shopping through apps and online has now become the norm, providing a personalized and meaningful experience from the comfort of our homes. Against a backdrop of a fiercely competitive landscape, it is those who embrace these new technologies and utilize them to incorporate digital touchpoints that will stand out from the crowd and keep revenues flowing.

The acceleration of e-commerce in the retail space, driven by the pandemic, has caused a mass shift in customer expectations. With the minimization of human interactions due to a fall in in-store shopping, experiences have become more invisible, yet more immersive. Brands now seek to anticipate the needs of their customers and serve them more proactively – something which apps and websites have paved the way in doing. Customers now interact with brands less frequently, but more meaningfully, and through different channels.

Retailers are increasingly harnessing this new way of shopping. With digital experiences becoming the integral cog at the center of businesses, let’s delve into some of the trends which will shape retail in 2023.

Immersive and Invisible Experiences 

In the aftermath of the pandemic, retail app usage has accelerated, with brands using an app growing by 30% in 2021. The growth of in-app shopping experiences has allowed a more immersive and digitally consistent experience for customers, providing opportunities for retailers to engage with their consumers in new and valuable ways. The need for interaction is less frequent – and yet, when they do, it is more meaningful and likely to lead to a purchase.  

Many big brands such as L’Oréal and Adidas incorporate augmented reality (AR) features within their apps, such as virtual try-on, allowing customers to test out and see how their products would look without the need to go into a store and experience the hassle of a changing room. Rather, customers receive a realistic, personalized, and instant representation of what they would look like wearing the product, and can order it in a few simple clicks. 

The data produced by these virtual try-on apps is also invaluable, as it can feed into artificially intelligent algorithms that use machine learning to provide personalized recommendations of products to customers, anticipating their needs and proactively meeting them instantly. Eliminating the need to endlessly scroll through masses of products, these algorithms provide customers with a streamlined, speedy, and personalized experience through in-app shopping. Rather than spending an hour browsing through endless rails of clothes only to not be able to find what they want, customers can open an app and have the product they’re looking for instantly presented to them.

Bridging the Gap Between In-Store and Online

These in-app experiences are not just confined to the home. With the re-opening of brick-and-mortar stores, many retailers expanded their apps for usage in-store to further develop a connection and liven-up the in-store shopping experience. Going shopping is now more of an occasion. With inflation forcing customers to pay more, this provides a feeling of value despite rising costs.  

Companies such as Home Depot have introduced ‘store-mode’ features on their apps which locate certain products for users through GPS-like features. Zara also allows customers to book changing rooms through their app, eliminating the need to wait in line. Features like these make the in-store shopping experience seamless and streamlined, minimizing the need for unnecessary interactions while utilizing these digital touchpoints to make experiences more immersive and meaningful. This maintains consistency between the digital and the physical, allowing them to function alongside and enhance each other. Retailers will increasingly have to introduce digital touchpoints like this which produce these meaningful interactions if they want customers to continue coming into their physical stores. We will certainly see more and more stores bridging this gap and introducing these features in years to come. 

The Constantly Connected Customer

Post-pandemic, customers now seek out connections and intimacy, not just when interacting with other people, but also with brands. After having to embrace the digital world due to the pandemic, every customer is now a ‘connected customer,’ who interacts with their favorite brands through multiple touchpoints – not just in the store, but through apps, websites, and AR features. This enables them to have constant access to their favorite brands. As we look ahead to the rest of 2023 and beyond, retailers will look to tap into this phenomenon and explore even more channels to interact with their customers, with innovations such as the metaverse. 

Augmented reality (AR) features effectively act as precursors to the metaverse, which more companies are expected to explore in 2023. The metaverse further expands the implementation of the features offered by retail apps, as it aims to bring the physical store experience to the home. Building on the nostalgia of shopping malls, retailers can reimagine their shopping experience by introducing digital stores within the metaverse, where customers can interact with each other and buy exclusive products. This type of technology is certainly on the move, as seen with Nike’s Nikeland, which saw 7 million visitors in its first 2 months. This will support retailers in their aim to produce seamless and meaningful experiences which make their customers feel valued and connected. 

In conclusion, there will always be a demand for physical stores, but in 2023 retailers will have to incorporate digital touchpoints to connect with their customers and proactively act upon their needs if they wish to keep the purchases up. It is becoming essential for retailers to offer their customers an omnichannel experience, which allows them to choose how they interact with brands – be it in-store, online, through an app, or within the metaverse. Retailers who realize this will reap the rewards and win wallet share during the economic turbulence which is shaking the world of shopping.