Consumer trends drive business success or failure. It can be hard to understand how consumer trends impact small retailers and even harder to understand how to apply them to your business. Here are the top five trends impacting retail in 2023, and here’s what they may mean for your business.
Invest in Business Intelligence
Business intelligence is a term that is usually used in large retail companies. It often has to do with interpreting copious amounts of data (pricing, purchase, customer demographics), but as technology continues to change how customers make purchases, it has applications for small retailers. For small retailers, it simply means that you understand your business, what is driving your success, and what is causing your problems. Business intelligence encompasses all aspects of your business, from hiring to customer service to finances. In 2023, yes, you want to understand what your customers want to buy from you, but more importantly, it is also the time to look at WHY they buy from you. And you want to see where you can improve upon that. This year is the perfect time to take stock of your business operations and see where you can improve for your customers, your employees, and yourself.
Areas of Business Intelligence to Look At
If the idea of business intelligence seems strange to you, here are a few areas you can look at to start. Your Personal Values: As the person who created your business, how are you feeling about your company now?
- Is the business what you originally envisioned it to be, or has it become something that you may want to change to align with your values now?
If your business doesn’t align to your values, it may be time to revisit your model and pivot. Your Brand: A brand identity is important for your long-term success.
- First, do you have a brand? What is that brand?
- How does that brand fit your customers?
- What problem does your brand solve for your customers?
If you’re struggling with a brand, you want to spend some time looking into this as your brand is important to keep relationships with your customers going. Customer Connection: Connecting with your customers is important, the end of the year is a great time to check in on how you’re doing.
- How do you go beyond the traditional definition of customer service?
- Is your return process easy if they bought something online?
- Do you have added value services that help get products they want?
- If not, could you add that as a paid service to assist them while also boosting your bottom line?
Creating simple ways to continually use service to maintain connection with your customers helps your business weather about any economic storm you may face (recessions and pandemics included). Marketing and E-Commerce: This is a big one, not just because it’s about purchase data and sales, but because of the financial and time investment it requires for most stores to make.
- What channels are you using to drive sales? Email? Direct Mail? Social Media?
- How are those channels driving customers into your store, or encouraging them to buy online and/or pick up in person?
Marketing and e-commerce are necessary for any small retailer to remain viable moving forward, but that does not mean you have to have the strategy and budget that a larger retailer requires. There are many creative ways to have an online presence, generate revenue, and bring people into your store. Spend some time figuring out what that looks like for your business this year.
Anticipate Your Customers’ Needs, Wants and Desires
This is a big one. In retail, it’s an art to get your customers the goods they want before they know that they want or need them. Isn’t that why you attend trade shows and buy products 6-12 months in advance? If you can anticipate your customer needs, it keeps you relevant to them. And its relevance that keeps customers purchasing from you. For many small retailers, being able to do this can be as simple as expanding the product lines you carry in your stores. Ideas:
- The wellness industry is expected to reach $450 billion dollars in 2023, how could you use that to your advantage? Can you carry beauty products that support self-care?
- Could you add non-THC, high-quality CBD products for people and pets to your shelves?
- If you are worried about a decrease in sales due to recession behavior, can you pivot a part of your core merchandise to be products that people will always buy?
In 2023, do not be afraid to get creative in your inventory and test new categories and goods that your customers may find complementary to what you currently sell.
Create Premium Services and In-Store Appointments
Do you offer in-store appointments for your customers? If you do not, you should! Offering in-store appointments can be as simple as private shopping time (where they are the only ones there and you can assist them with specific needs) to getting more creative and offering to teach them something via classes in your store. Ideas:
- If you own a retail store, have you ever considered offering styling services for your clients on how to dress for their body type?
- If you sell plants and gifts, have you ever thought of hosting a small class for customers to teach how to create a jungle in their homes with plants?
- Or if you sell a wide range of merchandise, could you create a services package or VIP Day where do you source goods for your clients for their home? You are a buyer, with a trade show and online marketplace access, this could be a very lucrative offering for you for when the store is slow, and/or you want to find ways to make money without carrying inventory.
One ASD Market Week retailer currently charges $85 per hour to do this for her customers. She creates Pinterest boards with the images and retail prices of the products she finds on behalf of her clients. Once they tell her what they want, she places the wholesale order and sells the merchandise at retail, plus her hourly fee for finding the products. It is a win-win model for her because her store is only open Friday – Sunday due to its small-town location that is heavily dependent on seasonal foot traffic for in-store sales. This option allows her to make money without adding to inventory and staffing costs. She advertises these services in-store, on her website, and through social media.
Offer Environmentally Conscious Packaging and Shipping
Sustainability means different things to different customers. If you dig into the data, Consumers are demanding that retailers use recyclable and sustainable packaging for their products for both digital and physical purchases. This includes small businesses too. According to Shorr’s Sustainable Packaging Consumer Report, 86% say they are more likely to purchase from retailers if the packaging is sustainable. Why is this important to customers? Because the harsh reality of climate change is something that touches them all. If you have not started looking into shipping that offsets carbon emissions, look at Greenly to better understand your options, look at Cloverly to offer this as a cost-effective shipping option to your customers who purchase online. You can also investigate reusable and biodegradable packaging options for your store. Did you know that you can have 100% compostable and biodegradable packaging labels printed with soy ink from Leapin Lizard Labels in Colorado?
Elevate Your Store Experience
As a retailer, you know that merchandising and in-store experience means everything to many of your customers. They love to walk through your store and find things that surprise and delight them. Often, your store is more than just a place to conduct a transaction, it’s a little escape. They love to look at the stories your merchandise tells. They love to think about the possibilities and ideas they find in the books you carry, the lifestyle items you offer. While e-commerce continues to grow, it’s not outpacing in-store foot traffic.
Technology will continue to take online shoppers into physical stores. But the expectations of a store have changed because of this. While customers come into your store to escape, to find what they want, they are also expecting certain elements of online shopping to be present. The biggest tech trend for small retailers would be to create the same frictionless buying process that your customers find online. You can offer mobile payment systems, such as PayPal, Venmo, Apple Pay, and Cash App. Your younger customers may not carry cash or cards. Use technology to elevate your store experience, but you don’t have to go overboard. And no, you do not need to worry about crypto currency just yet.
What Comes Next
At the end of the day, retail business and consumer purchase trends don’t have to be overwhelming for small businesses. Technology drives changes, but still having a solid foundation in place is what keeps businesses alive.