Retail Prepares for the Unexpected
In 2023, anything is possible!
Few would be so bold to try and predict what 2023 will bring – at least not with any certainty. However, having survived the holiday season – and with inflation seeming to have hit a ceiling, and the threat of a global recession looking less threatening – there is a reason to feel more optimistic.
As Albert Einstein famously said, “In the middle of difficulty lies opportunity.”
While most of us probably won’t develop the next groundbreaking scientific theory, many could certainly disrupt the current situation in retail. In fact, there are retailers who are doing this already including Uniqlo’s move to amp up wages for its sales associates, Nike, Frasers and others betting big by opening state-of-the-art flagships, and Barnes & Noble making a comeback in physical stores – despite decades of naysayers proclaiming that ‘no one reads print books any more’.
In fact, three years ago when the pandemic pushed all retail online, the talk was that after years of relying on e-commerce, consumers would ‘never go back to stores.’
But the pandemic passed and stores came back – in many cases even better than before.
Thus 2023 might be another uphill crawl. But it could also be a ‘best year ever’ – especially for retailers who understand their customers.
Here we share the insights and outlook from some of the industry’s smartest retail consultants. Backed by their years of hands-on experience, we asked them what they saw as the biggest threats, but also the biggest opportunities for retail this year.
> Jeffrey Roberts, Partner at Dive Without Fear
Biggest opportunity: In-store experience. Know your customer and operating niche and create an in-store experience that invites and delights in line with that positioning. Big focus here on associates: train; empower; and point them at customers.
Biggest threat: Trying to be all things to all people. Discern your actual competitors and focus on creating value where they can’t.
> Carl Boutet, Founder, Chief Strategist & Executive Advisor at Studio Rx
Biggest opportunity: Continued emphasis on optimization (doing more with less) + better defining that impact in measurable sustainability terms.
Another Big opportunity: Renewed interest in differentiation via unique merchandising and collaborations. The first is science (empowered by data & technology) the second is art (empowered by human creativity).
> Ron Thurston, author of ‘Retail Pride’
Biggest threat: This year’s most significant threat to retail is those brands that have yet to make substantial investments in training, career growth conversations, and leadership development in the four walls of every location. When the candidate chooses their next great job opportunity, they will choose the brands that have made these investments with the most critical people in their company, those that are face-to-face with the customer.
This year’s most significant opportunity and, therefore, financial investment is growing their brick-and-mortar fleet to meet the demand of their brand growth.
Biggest opportunity: The best way to capture customer data, engage and create loyalty, acquire new customers, lower return rates, and increase the average frequency and dollar amount of the sale is through the store. That opportunity is true for every retailer this year.
> Glenn McMahon, Managing Director at Getzler, Henrich & Associates
Biggest threat: Global economic disruption: inflation, recession, higher interest rates, fluctuations in currency, prolonged war in Europe, linger effects of the pandemic (Covid still is a major problem for China impacting the world’s supply chain) …
Biggest opportunity: Strong retailers will be able to take market share. Retailers with a strong balance sheet and a healthy cash reserve can invest in innovation and react and respond to opportunities in the market thereby gaining competitive edge over cash strapped competitors
> Carol Spieckerman, President at Spieckerman Retail
Biggest threat: Unpredictable events and economic downturns aside, the biggest threat to fashion retail in particular will be consumer backlash against conspicuous consumption. Fast fashion companies have poisoned the well in a sense by inviting deeper scrutiny of throw-away fashion.
On the positive side, brands and retailers have stepped up to embrace resale, and next-level sustainability efforts. Sustainability’s second act will be defined by brands and retailers making longer-term, more concrete commitments. An additional concern is that many retailers and brands have outsourcing sustainability efforts to third parties that may or may not be viable for the long term.
Biggest Opportunities: Business model diversification is retail’s future growth engine. Solutions and services including retail media, healthcare, marketplace expansion, and fulfillment services will power profitability and offset product-based headwinds.
Retailers have built powerful platforms and are intent on monetizing their investments. Wholesale partnerships will accelerate once again as brands seek to harness retailers’ next-level scale and outreach to new customer segments. I’m also calling 2023 the year of the store. Much of the innovation that will be unleashed this year, including in the solution and services realm, will launch in brick-and-mortar.
> Jeffrey McNulty, founder & CEO at The Ultimate Retail Courses
Biggest threat: Fierce competition to attract and retain Top-Tier talent. “Best in Class” brands are creating an inclusive and insulated moat where they can thrive and flourish.
Biggest opportunity: This year’s biggest opportunity is how fast each retailer can adapt and pivot to changing consumer preferences. Retail is coming around full circle. Customers are yearning for a fully experiential environment that harkens back to a bygone era of the 4𝐄𝐬: engagement, experience, entertainment and execution.
> Walter Holbrook at Yoda Retail Consulting
Biggest threat: Has to be the economy and inventory residue from 2022.
Biggest Opportunities: Value, especially in everyday basics. Everyone in all income categories are looking for a deal. Real “Merchants” will offer that deal and protect their margins. Just the savings on Ocean Freight can create opportunities for retailers, then consumers.
> Chris Simon, retail consultant & data strategist
Biggest threat: Stock shortages. This comes from two areas. A true increase in theft and organized crime. Secondly data integrity issues coming from self checkout scanning issues and from operational shortage caused by diverse pricing structures when items are fulfilled across channels.
Biggest opportunity: Converting online carts. I have seen some sites empty my cart if ignored or I exit out of the site and others who will let me keep it in my basket for weeks.
Another opportunity is self checkout analysis. The current systems were deployed quickly during the pandemic and are not user friendly.
