Five retail imperatives for the new year
Retailers will face considerable hurdles in 2023, but they can ease the challenges by thinking strategically about the needs of shoppers, employees and communities.
These needs are changing, and retailers have an opportunity to bring innovative new solutions. Let’s take a look at five 2023 imperatives to see how this can play out.
1. Accelerate Customer Experience: Retailers should prioritize customer experience in 2023. This aspect wasn’t necessarily top of mind during the height of the pandemic, in the face of enormous hurdles. But now it’s essential to customers and is more measurable than ever. The 2022 American Innovation Index identified retailer innovation leaders based on customers’ experiences. Top supermarkets cited included Trader Joe’s, Whole Foods Market and Publix Super Markets. Drug store leaders included CVS, Walgreens and Rite Aid. The index is driven by Fordham University and market research firm Rockbridge Associates. A key point of the index is that consumers expect more than just satisfactory experiences. Retailers can drive further progress in 2023 by making offerings and experiences more consistent across omnichannel, pursuing innovative loyalty programs and offering entertaining in-store experiences.
2. Boost Employee Retention: The retail trade industry is trailing most other sectors when it comes to employee retention. That finding is based on a 2022 study from SmallPDF that analyzed data from the Bureau of Labor Statistics to determine “quit rates'' and “quite levels.” Retail trade jobs include those such as cashiers, customer service representatives and stock clerks. Retailers including supermarkets and drug stores have an opportunity to improve retention in 2023 by fine-tuning their strategies in areas such as compensation and benefits, training and development, and scheduling flexibility.
3. Understand Younger Consumers: Gen Z consumers are increasingly crucial for retailers, who need to understand the preferences and behaviors of these younger shoppers. A 2022 survey of U.S. shoppers under 25 found that 80% expected to use social media to locate holiday gifts and 41% anticipated using it for most or all of their holiday shopping. The research was conducted by social commerce company SimplicityDX. Retailers need to delve deep into these kinds of shopper insights to better understand younger customers and bring new and relevant approaches. Not all of the research insights will apply to supermarket and drug store retailers, but much of it will.
4. Get Innovative about Shopper Savings: Inflation isn’t disappearing anytime soon and there are lots of concerns about the state of the economy. Retailers need to find innovative ways to help shoppers save money in order to improve loyalty and engagement. Kroger set a creative example during the Thanksgiving season by unveiling a “zero-compromise shopping guide with meal options that can feed 10 people for as little as $5 per person.” It also opted to avoid shifting the rising cost of turkeys onto customers. Shoppers appreciate these kinds of unique strategies. However, they want savings all year long. In 2023 retailers can increase loyalty by offering new and creative ways to save throughout the year.
5. Prioritize Access and Equity: Local communities increasingly expect retailers to support access and equity, in aspects ranging from housing to food insecurity. Retailers are stepping up. As a case in point, CVS made big investments in 2022 to help build affordable housing in communities such as Bel Aire, Kan., and Seattle. Retailers, in fact, have expanded the definition of what it means to support communities. Those making commitments and executing well will differentiate their businesses. In the future these kinds of commitments will be more and more expected by communities.
The five retail imperatives outlined here will be crucial in 2023. Retailers that ace these aspects will be ahead of the game in satisfying shoppers, employees and communities, regardless of what the new year brings.
