2023 Retail Forecast: 4 Predictions for the Year Ahead

The 2022 holiday shopping season may have been a mixed bag for the U.S. retail industry, but there’s cautious optimism that a brighter future lies ahead. After a year disrupted by aggressive inflation and fears of an economic recession, there’s growing evidence that those worst-case scenarios have been avoided.

But that doesn’t mean change isn’t coming to the retail landscape. On the contrary: analysts from Insider Intelligence are predicting a wave of changes that will alter the competitive landscape for retailers in 2023. While some of these changes are being driven by retail tech adoption and increasing market competition, others are the result of shifting consumer behaviors.

Here’s a look at these leading retail predictions, as well as their potential impact on your retail business.

1. One-Day Retail Events Will Become More Common

First, there was Black Friday. Then Cyber Monday became a thing. Not long after, Amazon moved one-day retail events out of the holiday season by planning an annual Prime Day in July.

These highly promoted retail blitzes have demonstrated their power in delivering an influx of sales for businesses, and you can expect more of these seasonal events to take place in the near future. Amazon itself is experimenting with an expanded strategy after launching a second Prime Day in October of 2022. Even though its sales were down 40 percent from its July Prime Day, the retail event still generated billions in revenue—and likely helped the online retail giant capture early holiday sales that might have gone to their competitors.

Analysts believe these limited retail events could help provide a jolt to retail sales affected by inflation and economic tumult. Local businesses could participate by either launching their own campaigns in parallel to the events planned by major retailers, or by creating their own retail showcases built around specific events, themes, or expected seasonal demand.

2. The Resurgence of In-Store Shopping Will Continue

The pandemic may have triggered an increased reliance on online shopping, but consumers are starting to turn the tide. The growth of in-store sales outpaced the growth of ecommerce sales throughout much of 2022, and many online-only retail businesses suffered disappointing stock performances as their sales growth struggled.

While in-store shopping demand can vary from one retail niche to the next, consumers are demonstrating a sustained interest in brick-and-mortar retail that can be combined with online shopping, such as retail stores that double as showrooms and distribution sales for online inventory.

Businesses can also incentivize in-store shopping by offering more engaging shopping experiences. In-store events, expanded inventory options, ecommerce integrations, social media “selfie walls,” and other brick-and-mortar features can turn physical stores into an exciting retail destination.

3. Consumers Will Flood the Resale Market

Secondhand retail appeals to consumers for two key reasons: its affordability, and the sustainability of resale inventory.

As consumers continue to face the economic effects of inflation, resold goods can offer a discount that helps them better manage their spending and stay within their shopping budgets. Resale marketplace OfferUp notes that 93 percent of Americans are more inclined to purchase secondhand goods based on the economic effects of inflation.

Meanwhile, secondhand goods can play a valuable role in reducing the overall carbon footprint created by consumerism. Some retail businesses may want to court this consumer demand by adapting their retail inventory to include secondhand items. In other cases, local retailers can speak to these consumer interests by using their advertising messaging to promote sustainable and discounted retail goods, leveling the playing field with their resale competition.

4. Augmented Reality Will Enhance the Retail Shopping Experience

Augmented reality has already been featured in some retail spaces for years, offering digital tools that let consumers test makeup virtually and even preview how a piece of furniture might look in their home.

In 2023, the use of AR is expected to keep growing among retailers of all sizes. As the technology used to deliver AR experiences becomes more sophisticated and useful to consumers, the cost of adopting this technology has gradually declined, making it more accessible to smaller and mid-sized retail businesses.

Given that 91 percent of U.S. consumers already carry smartphones capable of supporting AR, deploying these experiences may be easier than you think. While this technology can increase sales and incentivize in-store shopping, it has also demonstrated an ability to cut down on returns.

As your business model and customer experience evolve, it’s important to keep your advertising and marketing strategy aligned with your small business goals. Cox Media can help your business build cost-effective, results-driven ad campaigns to help you connect with local customers, build awareness for your brand, and grow your retail revenue in 2023 and beyond.

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