Global retail trends in 2023

As we look ahead to the next 12 months, at the forefront of our thinking has been the inflationary backdrop in most major markets. This has driven a significant increase in production costs and retail prices. Meanwhile the collective actions of central banks have increased borrowing costs, pressurising businesses and consumers. This has led to an intense focus on driving out costs, improving efficiencies and delivering value to consumers in new ways.

While many of the initiatives are reactionary, they are helping retailers to reset the cost base and develop go-to-market models for the future. Alongside this, retailers continue to progress multi-year initiatives centred on health and wellness, sustainability and digitisation.

Progress in these areas is incremental but will drive significant long-term change in the shape of our industry.

To help suppliers and retailers navigate these changes and plan for the year ahead we have published our predictions for global retail trends in 2023 and how they will shape the international retail market.

The six trends we have predicted that will shape the global grocery landscape in 2023 are:

The efficiency imperative: with cost pressures mounting and retailers having to strip out complexity from their businesses, efficiency is a priority. Technology, automation, collaboration, new ways of working and a fresh approach to marketing all have a role to play. But, caution is required as some cost-cutting initiatives are at the expense of the shopper experience.

The new value equation: value is not synonymous with price. Both brands and retailers need to factor in a broader set of variables when trying to create value for shoppers. Other factors like experience, rewards, time and doing the right thing can move the narrative beyond price alone.

The magic of stores: retailers must delight and surprise their shoppers. But this does not mean by theatre and entertainment alone. Time, convenience, checkout, value and range are areas that can be optimised, in-store and online.

Force for healthier futures: interest in improving health remains elevated, and the grocery industry’s remit and responsibility continues to grow. Building trust and making healthy choices affordable and appealing have potential for great positive change. Meaningful progress in 2023 would lay the foundations for future generations’ health.

Savings for the planet: retailers will persevere with their ESG objectives, especially the ones that make their operations more efficient and resilient. However, retailers will be forced to make tough decisions between achieving ESG targets and cost and availability implications of more sustainable solutions.

Task technology: retailers have unprecedented access to new technologies, enabling them to operate faster, more efficiently and at lower cost. Ongoing innovation will redefine retail digitisation, underpinning the development of new propositions and business models.

 

These trends are not independent of each other. Technology in particular is an enabler for all, while also being a driver of change itself. Across physical and digital stores, sustainability, health and value will be evident and contribute to the drive for greater operating efficiencies.

What to do next

1. Organise an internal session with your team to cascade across different functional and customer teams.
2. Sense check against your plans to ensure alignment.
3. Share with your retail customers as a piece of thought leadership.
4. Contact your IGD account manager at askigd@igd.com to arrange a briefing.