New year, new trends: predictions for the retail industry in 2023

Navigating the cost-of-living crisis

In 2022, the UK entered a cost-of-living squeeze which will undoubtedly continue to impact the retail industry in 2023 – for both retailers and consumers.

Due to rising inflation, the cost of everyday necessities – such as groceries – has significantly risen. Plus, supply chain disruption has led to stock challenges, causing retailers to push prices up even further.

This means that consumers are more cost-conscious than ever. In fact, NielsenIQ reveals 63% of consumers are being more frugal with their spending due to the cost-of-living crisis.

Also, NielsenIQ predicts that shoppers are changing the products they buy as they become more mindful of what they spend. Own-label products and low-cost alternatives are set to be popular while demand for luxury items decreases.

Retailers will have to adapt to these changing shopper behaviours and spending habits in 2023 – tailoring their range and assortment accordingly, and optimising category flow and store layouts for the cost-conscious shopper.

Sale events are on the up

With consumers having access to less disposable income, it is likely that they will be looking for ways to save money. In fact, NielsenIQ have revealed that 31% of shoppers will buy products which are on promotion, with most people being more careful with the money they do spend.

Further to this, The NPD Group predicts that sale events will be a key trend among retailers as a way to attract customers and drive spending in 2023.

So, we’re expecting shopping events – like Black Friday – to go on longer than in previous years. Also, retailers are more likely to further capitalise on holidays like Mother’s Day and Valentine’s Day with even bigger sales events than before.

Perhaps 2023 is set to be the year of promotions!

Sustainability and the planet

In recent years, consumers have become increasingly concerned with sustainability and environmentalism. They have taken greater interest in ‘Green Consumerism’ – and this is subsequently impacting their buying decisions.

Shoppers want to know more about what they are buying – such as a product’s carbon footprint or its supply chain – or even the Environmental, Social and Governance (ESG) principles of a brand or retailer.

Plus, the British Retail Consortium (BRC) has set out their Climate Action Roadmap, detailing the retail industry’s commitment to being carbon zero by 2040 – 10 years ahead of the government’s 2050 target.

NielsenIQ reports that some UK brands and retailers are already increasingly working towards these sustainability goals. This includes reducing their wastage, carbon emissions and plastic usage.

We’re expecting even more retailers to react to this in 2023, taking further responsibility for their environmental impact – and implementing changes to demonstrate their dedication to sustainability.