Mark Guest, Managing Director – Retail sector at Concentrix, looks at the most significant retail insights for 2023 and predicts some critical areas on the sector’s agenda. 

Return Policies Will Make or Break Customer Loyalty

Frictionless return policies are more crucial than ever in today’s environment, where disposable income may be constrained. Some online merchants might feel pressured to withdraw their free return policy in this year’s challenging economic conditions, but those who keep them in place will likely see higher customer satisfaction and loyalty.  

More than 60% of customers will review a retailer’s return policy before making a purchase, according to Narvar, emphasizing the significance of having a clear, practical return policy to satisfy clients and promote repeat business. More straightforward online purchases without the increased cost of returns will be a consumer requirement in a world where value perception is rising, and disposable income is shrinking.  

Balancing Online with Bricks-and-Mortar Sales

Whilst 2021 saw a shift toward e-commerce, 2022 saw a return to bricks-and-mortar, high-street shopping, leading to ten consecutive months of decline in online sales.  

The convenience, product breadth, and price competitiveness of e-commerce will continue to drive demand, but as we progress through 2023, retailers should expect a resurgence in in-store shopping due to renewed appetite from an experiential perspective. The key is to make the retail experience seamless, enjoyable, and rewarding regardless of the channel customers choose to shop through.  

We still expect online shopping to see sustained long-term growth among all demographics. The important thing for retailers is to embrace the return to bricks and mortar and make sure their business is ready to provide a top-notch shopping experience for all customers. 

Social Media Platforms Continue to Shape Social Commerce

Social media platforms are working hard to establish themselves in the social commerce space in Western Europe, but they haven’t had the same success as in places like China. However, everything might change thanks to apps like TikTok, which are predicted to attract millions of new social consumers, blurring the lines between entertainment and retail. 

Retailers now have an exciting chance to use this channel to reach a larger audience and connect with consumers who could be more likely to use social media over traditional retail websites or brick-and-mortar establishments. Therefore, it’s crucial for shops to fully utilize this channel and ensure that this rapidly expanding audience can set eyes on their products.  

Consumer Economic Pressure 

Retailers must be aware that discretionary spending will likely remain low in 2023. To stay competitive, it is crucial to balance giving customers what they want with offering the products they need. By tailoring and streamlining their offers, retailers can stand out from the competition and offer much more value. 

According to Forbes, the global re-sale market reportedly grew by over 30% in 2022, likely continuing rapidly over the next three years. In addition, thanks to technological advancements, businesses can now more easily engage directly in the resale market, which is also tempting from a cost and environmental standpoint.  

Retailers must consider the resale market, but they must also be aware of the possibility of cannibalizing new sales. Therefore, re-sale options should be an additional choice rather than a replacement that lowers overall sales. By striking the right balance, and thinking carefully about customer journey design and how this fits within their CX strategy, retailers can successfully navigate these challenging times and come out on top.

Discover more critical retail insights for 2023.