023 was an interesting year for retail and a lot changed. Now that we are approaching the end of the year, it is worth looking back at the developments and taking stock of just what happened.
The first item on the list of significant changes was frictionless shopping. Retailers found new ways to help customers access products and take them home with them, without putting any barriers in their way.
To this end, Amazon expanded its network of checkout-less stores, offering buyers more opportunities to just walk in, grab the things they want, and walk out in a highly futuristic scenario. However, we also saw more minor innovations from across the board from retailers playing catch up. Checkouts became contactless, self-service options exploded, and stores began making real-time recommendations to customers via their apps.
Frictionless shopping didn’t arrive en masse in 2023, but it is clear it’s becoming closer to reality as we head into the rest of the decade. It may soon become a normal store experience and something shoppers expect, going mainstream as the price of tech declines.
At the same time, retail witnessed an explosion in AI personalisation across the board. Companies are realising the potential of artificial intelligence to act like a personal assistant, guiding people around stores and explaining products to them in more detail.
Personalisation is changing the way stores do business. Instead of relying on colleagues to guess what customers need next, AI is doing it using data. This evidence-based approach is less intrusive and more effective at extracting maximum demand from users. Artificial intelligence can often predict what they need next, better than customers themselves can, enabling them to experience more satisfying shopping trips that meet more of their needs.
Related to AI, we also have augmented reality technology, another tool retailers are using to shake up the industry and provide new types of experiences to customers. This technology is still highly device-dependent. However, it is taking off as kits get smaller and become better connected to the internet.
The idea is to provide shoppers with a heads-up display as they move around the store, showing them directions, special offers, and discounts. Some systems also have natural language processing capabilities, allowing users to ask voice-activated questions of their devices in real time. This capability means that consumers can now quickly find the things they need instead of relying on memory or traipsing around the store, looking for items in counterintuitive places.
Sustainable And Ethical Retail
Another trend for this past year is the rise in sustainable and ethical retail, particularly in high-end cosmopolitan cities. Consumers are looking for products that show off their virtues.
Ethical retail encompasses how firms take care of their employees and customers. On the employee front, retailers are using business insurance products to ensure colleagues receive compensation after injuries.
Broker and internet insurer Simply Business says that this step is necessary. “Retailers are at risk of litigation because of the sheer volumes of staff and customers that walk through their doors. Accidents can happen at any time, and can sometimes result in serious injury. If customers believe they can get compensation for their actions, they will do so.”
Sustainable practices are also becoming more central to what retailers are doing. Many are listing the sources of all their products, telling customers where they originated and the conditions in which people made them.
Details about the materials used to create them are also being advertised. Brands are keen for customers to understand the steps they are taking to ensure they protect the planet for future generations.
Another development is the rise of omnichannel engagement. Businesses have largely given up on the idea that they can communicate with their customers through a single channel. Instead, they are now adopting various services that let them communicate across multiple platforms from a single hub.
Other businesses have been doing this for some time. For instance, many legal firms now use platforms that let them communicate with customers on WhatsApp, Facebook Messenger, and SMS from a single dashboard in the cloud. Any rep can continue a conversation from where it left off, or import it into the CRM.
These omnichannel touchpoints are critical because they are what customers want. Shoppers love the ability to communicate with retailers through platforms of their choice instead of having to go through approved channels only.
These omnichannel experiences are also helpful for mobile users who might not step outside of social media often. Being able to communicate with firms via regular apps improves accessibility and reduces cognitive effort.
Another big trend of 2023 was experiential retail or the idea that stores should be more than big warehouses with products for customers to pick off shelves. The main benefit of experiential retail is the lasting psychological effect it has on buyers. Shoppers are unlikely to remember trips to generic big box stores, but they will always recall unique shopping experiences.
Interactive or experiential retail takes various forms, depending on the outlet. Stores can host events, offer unique amenities or offer interactive experiences. To qualify, experiential retail must feel like something. It shouldn’t be generic.
Social commerce also came of age in 2023 as social media platforms blurred the lines between traditional accounts and shopping platforms. Many brands introduced shopping options and the ability to sell one’s personal goods, similar to eBay and Gumtree.
Social commerce also took the form of improved social media engagement by many of the big retail stores as they attempted to compete with highly successful brands already dominating the space.
Lastly, 2023 saw a plethora of inspiration-led conversion strategies. Retailers attempted to communicate with customers in a different way. Instead of selling the benefits of a product, they sold the possibilities.
This turned the benefits-features debate on its head, and almost took a leaf out of Steve Jobs’s playbook. Instead of focusing on what a product or service could do for customers in the present, retailers painted a grander vision of its impact in the future on their lives.