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The Biggest Challenges Retailers Will Face in 2023

Reading Time: 5 minutes

Retailers wishing to compete in 2023 (that’s all of them!) must be aware of the challenges the new year will bring to face those obstacles head-on. By understanding possible –– and probable –– future challenges, retailers can structure their efforts to transform potential pitfalls into successes.

Read on to learn about the most significant challenges retailers will face in 2023 and what you can do to prepare for and overcome them.

1. Meeting Delivery Demands

It’s no secret that consumer delivery demands have increased over the last few years. Amazon set the standard long ago for “free” two-day shipping. And when global shutdowns permanently altered shopping behaviors, consumers relied even more on speedy shopping as they all but halted in-store purchases.

Even though we’ve shifted to a post-pandemic retail reality, delivery expectations are high –– and they’re getting higher. Meeting consumer delivery demands poses a significant challenge for retailers as we enter 2023.

According to a recent Shopify report, 75 percent of consumers say free shipping significantly influences their purchase decisions, with 58 percent expecting free next-day delivery.

And it’s not just the promise of free delivery that shoppers want. The same report found that when packages are delayed, and customers aren’t informed, nearly 70 percent of customers would likely opt for a different retailer.

Furthermore, nearly one-third of shoppers will abandon their carts if estimated shipping times do not meet their expectations.

Fast, free, accurate delivery is no longer an option or an appealing feature; it’s essential. Retailers must find sustainable methods to meet consumer delivery demands to win in 2023.

2. Inflation and Increased Financial Burden

Inflation prices have affected most American spenders. Eighty-five percent of shoppers are very concerned or extremely concerned about inflation, and forty-six percent say they’re buying fewer nonessentials.

To combat the current increased financial burden, shoppers are taking one of two actions: spending less or finding alternate forms of payment. The latter allows retailers to cater to consumer needs without compromising sales or revenue.

Providing dedicated consumer financing options allows retailers to offer goods at an affordable cost via payment plans. Forbes reports that 42 percent of Gen Z and 69 percent of Millennial shoppers are more likely to purchase when installment loans are a payment option. Nearly ninety percent of Millennials and Gen Z spenders want credit card alternatives, and 87 percent of both age groups prefer a “Buy Now, Pay Later” (BNPL) service over a credit card.

Retailers can meet consumer needs for affordable payment options by offering BNPL services. Practical alternative purchasing methods helps retailers incentivize purchases, increase the average order values of those purchases, and combat the financial barriers created by an inflated economy.

3. Adopting a Data-Driven Marketing Strategy

Marketing and advertising dollars count now more than ever. Retailers must find ways to optimize their marketing strategies –– and budgets –– to make the most of their efforts. By adopting a data-driven marketing strategy, retailers can target the right audiences at the right point in the buyer’s journey to earn conversions.

Consumers expect personalized marketing experiences, and implementing data-driven marketing strategies proves fruitful for retailers and brands that invest effort into creating them. Though strained consumer wallets may tempt retailers to pull back on advertising, retailers have a prime opportunity to build loyalty and attract new audiences with personalized marketing that speaks to their unique pain points.

Analyzing consumer data allows retailers to take three primary steps that lead to sales:

  1. Define the audience
  2. Segment the audience
  3. Deliver unique messaging that cuts through the noise of everything else vying for their attention

Personalization is key to reaching –– and winning –– consumers in 2023. Utilizing consumer data and creating the optimal shopping experience on your product pages helps you target your ideal shopper and then cultivate those shoppers into buyers.

4. Experiential Marketing and Shopping

Shoppers are hit with ads at every turn. Delivering an effective ad requires retailers to create more than an interaction; they must immerse consumers in an experience.

Experiential marketing delivers on its name. It’s a marketing strategy based on creating and delivering memorable, innovative customer shopping experiences both digitally and in-store.

Retailers win when they create deep emotional connections with shoppers. Experiential marketing and shopping cultivate interactive experiences for shoppers. This method is effective because it connects with shoppers on an emotional level. As a result, they not only purchase the product initially but also develop loyalty to your brand.

When customers are involved with a retailer’s brand story, they feel connected to that brand. They aren’t being sold to; they’re part of the marketing campaign. And they will remember the experience long after they leave a site or storefront.

5. Standing Out from the Competition in a Sea of Content

Omnichannel retailers must proactively differentiate themselves from competing retailers and D2C brands. Rich product content is the key to attracting, engaging, and selling to consumers.

Unlike traditional content that simply presents information, rich media enhances every aspect of the product content experience. Rich product content includes:

  • Product videos
  • 360° spin imagery
  • Detailed product specs and dimensions
  • Comparisons against competing products
  • 3D views
  • AR applications
  • VR applications
  • Hot-spot imagery with cross-selling

Implementing rich product content allows retailers to put multiple high-impact, conversion-driving elements in one place, empowering them to sell more, increase revenue, and cultivate greater consumer trust and loyalty –– all while setting themselves apart from competitors.

6. Content Accuracy and Consistency in an Omni-Channel Market

Your content is your product in an omnichannel retail market. Shoppers rely on retailers to deliver consistent, accurate product content to inform purchase decisions. As third-party sellers grow in popularity and online shopping rates continue to increase, retailers must ensure quality product content across all commerce channels.

Product content quality indicates the quality of the product being sold. Retailers must carefully monitor product content across channels and regions to ensure a consistent experience everywhere users interact with their brand.

Regular product content audits allow retailers to see which content earns conversions and which needs reworking. Careful monitoring identifies product changes or inaccuracies, enabling you to make the necessary changes, so your content is optimized for a satisfying user experience.

Winning Market Share in 2023

The new year presents many challenges to retailers but offers myriad opportunities to win the digital shelf. Understanding and preparing for the retail industry’s challenges empowers retailers and brands to cultivate strategies that put them on top.

At Content Status, we position retailers to create and execute product content and supplier program strategies that deliver results. Reach out to our team today to learn how our solutions can help you win in 2023.