2023 marks the fourth year of a decade that began with a once-in-a-lifetime pandemic that transformed the retail industry. As supply chain issues and other economic challenges caused by the pandemic continue to fester, retailers are finding a new normal with hybrid shopping. This means retailers have even more opportunities to create new offerings and optimize the consumer journey. In this article, we examine the biggest retail trends that all retailers should have on their minds as they navigate 2023 and beyond.
1. The Monetization of First-Party Data
As merchants have been investing in digital channels that natively collect significant tranches of data, only select merchants have transformed their business model in a way that has allowed them to reap a return on that investment. Kevin Struthers, Associate Director of Digital for W. Capra, adds, “Amazon formulated the retail media network blueprint that the Walmarts and Krogers of the world have since utilized to phenomenal success. With the right guidance and execution, this is a model that any merchant sitting on first-party data can leverage to maximize return on ad spend, strengthen partnerships with CPG providers, and increase sales through personalization.”
2. Reduced Cost of Acceptance
As an upcoming economic downturn continues to loom, businesses may look to become more cost-conscious, examining methods to cut expenses associated with payment technology and cost of acceptance. Eric Hanna, Senior Consultant at W. Capra, expands, “Whether looking to reduce the cost of chargebacks or to improve your fraud prevention program, it’s important to balance real-time insights with a marketplace understanding to optimize pricing and risk management.”
3. Self-Checkout Shrink Management
In this case, the term “shrink” refers to the theft of inventory or store merchandise. While 2022 saw many notable retailers rushing to implement self-checkout (SCO) technology, poorly implemented SCO has resulted in a rise of shrink in retailer environments. “In our current inflationary economy, shrink is increasing as buying power decreases,” says Loren Allston, Principal Consultant at W. Capra. “This year, we’re pushing our clients to consider how W. Capra can assist them in remediating shrink through technological, operational, and resource-based changes to find the perfect intersection of SCO design and store layout to enhance the existing consumer experience and drive traffic to SCO.”
4. Passkeys Replacing Traditional Usernames/Passwords
Passkeys, also known as passwordless authentication, are becoming increasingly popular, leveraging biometric authentication, a PIN, swipe patterns, and more as a replacement for traditional username and password combinations. Bill Peeler, Senior Consultant at W. Capra, adds, “Passkeys offer increased security by eliminating the need for users to remember and manage passwords across multiple sites. Equally as important, they provide a more convenient user experience as users can simply use their fingerprints, facial recognition, or a one-time code sent to their device to authenticate their identity. Therefore, when implementing passkeys to enhance your security measures, it’s essential to consider how downstream impacts to consumer experience impact your overall engagement strategy.”
5. The Rise of Real-Time Payments
For several years now, the industry has been tracking the evolution of Real-Time Payments (RTP). As the RTP network has matured over the past several years, it will soon face competition from the Federal Reserve’s FedNow system. Whichever network transactions process through, the discussion of RTP points to the same gap in the existing payments marketplace. “At last, our technology has evolved to meet consumer expectations,” says Clint Cady, Partner at W. Capra. “With any other modern-day digital exchange of information, consumers expect near-immediate processing— why should they expect anything different from payments?” With the technology becoming available, the question that retailers must be assessing is whether your go-forward strategy and roadmap(s) account for RTP.
6. Increased Penetration in Social Commerce Channels
Social commerce refers to the use of social media platforms to sell products directly to consumers through features like shoppable posts, live shopping, and in-app purchasing. However, according to Bill Peeler, “In 2023, we anticipate businesses of all sizes to adopt social commerce strategies as a more direct and convenient way to connect with consumers and drive sales, thereby alleviating cart abandonment and user journey friction seen with more traditional e-Commerce activity.” Not only will this adoption change the way consumers shop, providing a more seamless and interactive experience, but it has the potential to transform the way businesses interact with consumers and sell products.
Specific to Convenience and Energy
7. Expanded Food Offerings with Kitchen Management Systems
Along with the rise of EV charging adoption comes the need to occupy the consumer for the time it takes to charge a vehicle. “Chains that have limited food offerings, who have not yet implemented made-to-order or other fresh food offerings, need to be thinking about how they become a destination of choice,” explains Loren Allston. “People need to be comfortable while they wait for their vehicles to charge, and this comfort may require incremental technology capabilities or changes to physical layouts.”
8. Visa Fleet 2.0
Visa Fleet 2.0 is a new generation of fleet card payments that Visa is introducing through the Visa Ready Program. Focused on providing a secure, reliable and efficient payments experience, Visa Fleet 2.0 aims to provide fleet managers with better control of their expenses, allowing them to digitize transactions and automate expense tracking through real-time analytics. “If implemented correctly, Visa Fleet 2.0 will help retailers reduce costs, improve efficiency and increase their bottom line,” offers Victor Madera, Senior Consultant at W. Capra. “An additional benefit of Visa Fleet 2.0 is that has the potential to enhance existing security by transacting through digital means, even facilitating compliance with security regulations.”
For further discussion on how to position your organization for success in any of the domains listed above, please contact Daniel Kahan at [email protected].