Six trends retailers should continue watching across the next six months

As the world continues to grapple with how to define a post-pandemic life and now high inflation, the retail industry has been dealing with one of the most uncertain and rapidly evolving moments in recent history.

Retail’s identity in 2023 will be shaped by the economy and consumer choices.

Consumers will expect choices around how, when and where they shop. Retailers who have been able to anticipate consumer needs before they are broadly in the market and then pivot to meet and exceed those needs will see the strongest results.

Here are the top retail trends to continue watching in 2023, according to Mastercard:

1. Spending on experiences will trade places with durable goods

Spending on travel and experiences is expected to continue rising as a share of total consumer spending, while the share of big-ticket durable goods is expected to decline, according to the Mastercard Economics Institute.

The result of this shift would be a reversion to the pre-pandemic mean average. How will the economy affect consumer choice?

2. Uncertain times call for very certain data and analytics

As consumers manage a steady stream of messages vying for their attention, the art of communication is more complex than ever.

Data and analytics are critical for helping retailers understand purchase decisions and the types of experiences they should deliver while becoming more agile in the process. How will the role of data and analytics evolve in shaping the customer experience?

3. Reaching consumers is a game of diversification balanced with privacy

To expand their reach virtually and in person, retailers are doubling down on retail media networks and social commerce.

What are the emerging and innovative ways retailers will reach consumers as they traverse online and offline channels?

4. Loyalty and rewards must go beyond points and programmes 

When customer experience encourages ongoing engagement and builds a deeper relationship, loyalty is the direct result.

Savvy retailers recognise that loyalty goes beyond what the customer is buying – and beyond points. How will retailers evolve their loyalty strategies?

5. Paying for purchases is about as many choices as possible

Cash, cheque or card? There was a time when consumers had three choices when making a purchase.

Different ways to pay – whether in person or online – have expanded to include everything from QR codes to small loans at the point of sale.

The ability to offer different payment choices is key for driving stickiness for retailers in 2023. How will payment options expand?

6.  Stores and virtual to carve out distinct roles but work more cohesively

The distinct lines between in-store and online purchasing will become more blurred as stores adopt more digital features.

However, stores and digital channels will each have their unique distinctions to satisfy consumer needs – whether that be a touch, feel and taste experience or a safety, convenience and choice experience. How will stores and virtual shopping adapt?