The magazine has listed five principal trends for the retail sector this year.
The past three years have been pretty turbulent for consumers and retailers alike. We’ve seen numerous challenges, as issues with supply chains, inflation, and geopolitical turmoil – and, in the UK, the mini-budget from Liz Truss’s short-lived tenure as prime minister – have all played a part in squeezing spending power.
As tough as things might seem, there is definitely a more positive outlook for customers now as we continue into 2023. That said, what’s certain is that retail trends that seemed normal pre-pandemic have completely flipped, with hybrid shopping increasingly growing in influence.
Shelley E. Kohan, a retail analyst and Senior Contributor for Forbes, recently posted her predictions for 2023’s five biggest retail trends. I was curious to read her thoughts, and to consider what these patterns might mean for talent. Read on for my comments on the year in consumer trends as predicted by Forbes – and the talent that retailers will need to harness these.
Retail Media Networks
This is the first area that Kohan mentions, with particular emphasis on the need to sell advertising space – both digitally and physically. ‘Ad space sales on websites, in-store displays, mobile applications, and streaming services will continue to grow across more retailers’, she writes. ‘The most significant growth, however, will come from streaming TV.’
We’ve seen websites becoming more focused on utilising vendors, maximising them to improve their revenue streams and business partnerships. From a talent perspective, companies will want to improve their business partners teams as they search for new sources of income. For example, Ocado Solutions has developed from Ocado’s original business model to sell a tech platform as well as business partners membership. Another key aspect for recruitment, alongside partnership areas, will be digital and online strategy, allowing retailers to analyse patterns in footfall, as well as plan out in detail how best to maximise this.
Social media sentiment monitoring
Kohan defines this as ‘collecting and analysing information on how people talk about a retailer or brand on social media’. Interestingly, Kohan notes that ‘the continuing rise of social commerce’ on TikTok presents growing opportunities for brands, as ‘the hottest leads’ on the network are people and influencers, not the brands themselves: ‘Once retailers figure out the TikTok model, it should become a tremendous source of revenue.’
Indeed, it’s no exaggeration to say that the retail landscape has been totally revolutionised by social media. The scope it offers for analytics, as well as customer outreach, make it an absolutely essential part of any retailer’s business plan. Examining what people are spending money on should be foremost in retailers’ minds right now, so having good data analytics and customer insight teams to understand and predict what customers will do and when is key. Information coming back in can then be utilised for new propositions and revenue streams. A dedicated social media strategy is also crucial; businesses need to maximise their presence on platforms to make sure their brand is on point.
Hybrid shopping and seamless shopper journey
When it comes to hybrid and seamless shopping, one word keeps coming up: experience. More and more, we’re seeing that businesses don’t wish to differentiate too much between separate ways of buying and selling. Rather, online, in-store, in-app and other purchasing methods can all be seen as part of the same vision – and all with as little friction or interference as possible.
‘Providing a holistic view of the shopping journey requires that retailers merge the siloed data across every business function into a synchronized format that all groups can view within an organization’, Kohan writes. Data analytics are crucial here, too, though Kohan notes that ‘the phasing out of third-party cookie data by 2024’ will force retailers to up their game, marshalling the first-party data that they already have to hand.
Where data teams analyse and report their findings to customer experience talent, the latter, by their very nature, need to face outward. Many retailers became a little lazy when the pandemic ground in-person shopping to a halt, and we’re still noticing the effects of this complacency now. The rise of online and social media in retail cannot be ignored: as I mentioned above, this has created so much more data for companies to work with, so there’s no excuse not to maximise the potential for excellent customer experience. The successful brand will harness customer experience talent for synchronised, holistic retail.
Store design shifts and mixed-use spaces
This is a really interesting one and follows on directly from the previous point about customer experience. The psychology behind how retailers use and lay out their space is always fascinating – not to mention important for sales. One of the most intriguing aspects of store design is that there’s no one right answer that will work for every company; different businesses will have different approaches depending on their services and customer base. For instance, Lidl and Aldi’s seemingly random allocation of special offers appears to be working for them!
Kohan reports on the design and space of a number of US retailers. Larger stores like Target and Walmart have experimented with smaller shops, while many businesses ‘are adding features to support new shopping initiatives such as curbside pick-up, fulfilment from stores, and pick-up in-store’. Mixed-use space, meanwhile, is of burgeoning interest to mall developers and community leaders, who want to combine ‘shopping, living, dining, and other community spaces that serve a specified market’.
In the UK, retailers will need to invest in design specialists to make the best use of their space and formats. The talent in this sphere needs to be adaptable, as customers like – and respond – to change. US retailers have probably led the way in terms of maximising space and pushing the right products at the right time. While British companies could probably benefit from taking notes from businesses across the pond, we’ve come a long way in the past 10 years; gone are the days of spare, spartan supermarket design in the UK.
Lastly, Kohan comments on the rise of sustainability as a retail trend, predicting that this year ‘we will see consumers slowing down – in other words, a consumerism curtailment’. Greater investment in, and understanding of, the product life cycle will lead to more people choosing to repair, recycle, reuse and buy second-hand, where previously they may have just bought new items outright. Younger people are largely driving this trend: ‘As Gen Z earns more money and becomes more powerful in voting with their dollars, companies focusing on sustainability will win out.’
With more and more companies hiring dedicated sustainability roles (such as Chief Sustainability Officer), this looks set to be a key area of the talent market in years to come. In fact, the demand for sustainable business practices led Venari Partners to establish a dedicated Sustainable Packaging team, very ably directed by my colleague, Tim Hartnell. We are proud to have a specialist practice finding executive search solutions for this very important industry – and it further underlines the central role sustainability plays in shaping business today.
Areas to focus on
The five trends discussed in Forbes show that physical retail stores must become far more commercial, using both their market space and vendors to help to grow revenue. Streaming and social media are areas that, while increasingly important, are perhaps yet to see their full potential for growth realised by retailers. In turn, these areas can feed into a holistic approach for hybrid shopping and customer experience, which businesses will also need to focus on to get the best understanding of their consumers. Furthermore, heightened awareness about sustainability has seen customers, especially younger ones, shift their habits; retailers will need to be conscious of this and make sustainability a central part of their outlook.
As such, key functions where we predict high levels of talent sourcing should be within the following areas:
Space & Formats
A final note
Things can always change, but even if the five trends identified by Shelley E. Kohan do not end up being as influential as she’s predicted for 2023, let’s be honest: they’re not going away anytime soon, either. The singular set of global circumstances that have led us to this point, plus the tricky economic outlook for the year, mean retailers must focus on data, making their social media, online and hybrid shopping work for them, and utilising space to reflect what they’ve learned about their customers – not to mention prove they’re listening to consumer concerns by taking real and genuine action on sustainability.
If you need help hiring into any of the areas discussed in this article, please get in touch – we’d be more than happy to help!