During 2023, global retail sales posted a slight recovery, despite inflationary pressures. Broader trends favoured shifts to value-focused retail channels such as discounters, while e-commerce also continued to grow – albeit more slowly than prior to the pandemic. Loyalty platforms, promotional activities, and the utilisation of customer data remained top priorities for retailers. This report explores the key trends impacting the retail industry in 2023, with an eye to the future of the sector.
This report comes in PPT.
Value is expected to remain the key factor impacting consumer purchasing decisions. Wider systemic shifts such as economic restructuring, integration of technologies, and new business models will impact employment and wage trends globally. Thus, as more consumers prioritise value-based purchasing, retailers will focus on new sourcing, private label extension and pricing to remain competitive. Value-focused channels will prosper.
Access to data is becoming increasingly important as retailers rely on consumer data for product development, targeting customers with personalised offering and tapping into loyalty platforms. With digital platforms gaining heightened importance, retail media networks and unified loyalty programmes that make extensive use of consumer data will become core segments of retailers’ strategies.
Artificial intelligence (AI) - and, more specifically, the rapid acceleration in applications of generative AI – is expected to reshape retail experiences across offline and online channels. In addition to making better use of AI to analyse customer data to create intelligent shopping suggestions, retailers will utilisethe technology to offer more personalised experiences.
COVID pandemic-induced investments in online operations have led to cost challenges for many retailers as e-commerce sales growth rates have slowed. With continued inflation increasing the cost of doing business, thinning margins have led players to rethink various aspects of their e-commerce operations. As profitability becomes a priority, new business models are expected to be explored, with greater visibility of software as a service and membership models.
Sustainability is gaining in importance on retailers’ agendas as the second-hand market finds green shoots in a value-driven economic landscape. Increasing digitisation is helping reshape sustainability solutions through innovation, eco-friendly practices and the growth of resale platforms. Retailers are expected to prioritize operational strategies and collaborative partnerships to ensure transparency in their sustainability initiatives.
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.
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