The year 2022 posed significant challenges for retailers, due to the winding down of the pandemic-inspired e-commerce boom, the war in Ukraine and double-digit inflation, which had a significant impact on consumer purchasing power and shopping priorities. In response, retailers focused on cost-saving solutions while attempting to increase foot traffic to stores by embracing experiential retail. This report explores these trends and other shaping the retail in 2023 and beyond.
This report comes in PPT.
In times of high inflation and turbulence, consumers tend to become more cautious about their spending and seek out retailers that offer solutions for rational consumption. They prioritise products and services that offer the best value for their money. Retailers who can provide the best quality for value proposition are more likely to be favored by consumers during these times.
From streamlining supply chain operations to creating personalized customer experiences through artificial intelligence and machine learning, automation is transforming the retail landscape in many ways with an aim of optimising efficiency.
Retailers are adopting sustainable practices due to higher consumer demand. Moreover, the cost-of-living crisis has further driven the growth of sustainable solutions, as consumers seek cost-effective options. This has led to a surge in the circular economy. Furthermore, retailers are investing in renewable energy to combat the rising energy prices.
In recent years, stores have transformed mainly in two ways. First, more space is being dedicated for e-commerce fulfilment to support online sales growth. Secondly, stores are transforming from transactional spaces to destinations for immersive experiences. Retailers are increasingly using physical stores to offer unique, interactive experiences, from entertainment to education.
Although physical stores have reopened after the pandemic, e-commerce continues to outperform offline retail both in 2022 and the forecast period. E-commerce leaders, mainly online marketplace operators, provide cost-efficient solutions for both consumers and merchants, resulting in an increase in their global dominance and greater consolidation of the e-commerce market.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.See All of Our Definitions
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