It’s safe to say that some of the trends that dominated shopping behavior in 2022 included a consumer focus on low prices, the importance of brand loyalty, and transparency when it comes to brand ethics. But with 2022 almost in the rearview, what will be the defining retail trends of 2023, and how can retailers use them to best connect with their customers?
Shoppers are looking to their trusted brands for help through economic uncertainty, expecting cheaper product recommendations and incentives that still match their lifestyles and budgets. According to a recent Forrester report, the top retail trends that have emerged for the year ahead include hassle free returns and loyalty programs. What does this mean, and how will these trends impact retailers’ decision-making next year?
Global and economic factors at play
The threat of a recession has made customers think twice about their spending in the last year, as the economic outlook for online retail isn’t as optimistic as it once was during the pandemic. The lockdown sales boom is over, and brands must ensure that low prices and customer communication are top priorities in the new year.
The importance of customer loyalty
According to Forrester’s 2022 Q1 B2C Marketing CMO Pulse Survey, 68% of shoppers belong to a retailer loyalty program and 59% to a brand loyalty program.
Loyalty is more important than ever, as shoppers have an unprecedented number of retailers to choose from, and limited spare income. Retailers must ensure that when consumers go to make a purchase, they’re top of mind.
Wunderkind’s 2022 Consumer Insights Report found that 82% of shoppers surveyed said price mattered most to them when shopping this holiday season. That means there’s a great opportunity for loyalty points, vouchers, and monetary incentives to encourage shoppers to spend with your brand.
Changes in the customer loyalty landscape
The concept of customer loyalty is changing, as user experience and ease are key. Retailers must think about how they can stand out from the crowd. Those that prioritize loyalty from an overall mobile, digital strategy (including easy-to-use mobile apps and websites with high-value deals and discounts) are better positioned to improve the customer experience and keep shoppers returning. Minor points-collection schemes won’t cut it anymore, but offering discounts through enjoyable digital experiences is more likely to pay off.
Returns are highly important
Forrester’s research also found that easy returns ranked as highly important for consumers. Returns can be made as hassle-free for customers as possible by including clear communications about return policies from the start of the purchase, offering a simple online returns portal, a range of drop-off and collection options, and if possible, free returns. This eliminates barriers to purchase and makes it less risky for the consumer to swipe their card, especially given that 30-40% of clothes bought online are returned, according to Eco-Age.
A new age of hassle-free returns
Today, the majority of consumers check a retailer’s return policy before deciding to buy. Consumers now rank in-person, box-free returns as the number one preferred method for online returns, while mail-in returns have dropped to the fourth-ranked position. Online sales mean consumers cannot touch and feel the product (called bracketing) so retailers should keep in mind there is a high probability that items will be returned. Many shoppers buy multiple items in different sizes or colors, knowing they will return some of those products.
The future for retailers
Customers want rewards, incentives, and an easy shopping journey. This is an opportunity for retailers to build a mutually-beneficial relationship with loyal customers so they can acquire and retain them for life. Brands can drive revenue by understanding consumer demand and communicating transparently with customers about low inventory, back-in-stock items, price drops, and easy returns — features that will strengthen loyalty as consumers remain price-sensitive well into 2023.