The retail industry is constantly evolving. So while it might be impossible to predict exact consumer behaviour, past patterns can inform future trends. If you own a retail business, these are trends you should implement in 2023.
- TikTok and Gen Z will shape social commerce
A 2022 Accenture survey found that almost 2 billion social buyers globally, or two-thirds (64%) of social media users, said they purchased an item via social media. Social commerce, in which sellers use social media platforms like TikTok and Instagram to market and sell products and services, is expected to rise. Accenture predicts the global social commerce industry will grow thrice as fast as traditional e-commerce to $1.2 trillion by 2025. Growth is driven primarily by Gen Z (born between 1995 – 2010) and Millennial social media users(1989-1994), accounting for 62% of global social commerce spending by 2025.
Online is where Gen Z gets inspiration on where to spend their money, and social media is a crucial shop front. A Forbes survey shows that 97% of Gen Z use social media as their primary source of shopping inspiration. And for many Gen Zs, the #1 platform for online shopping is TikTok. The social commerce site is unique because its ecosystem allows a dynamic combination of merchants, influencers and users to build hype online around a product. Merchants on TikTok are shown to shoppers through a “discovery first” approach, using the same algorithms for its personalised video content recommendations.
An example is the independent beauty brand Glow Recipe. It joined TikTok’s shopping program in April 2021 and generated 90% of its sales from first-time buyers. Additionally, the brand’s sales increased 600% after an influencer talked about their products on TikTok.
In 2023, retailers must realise that social commerce presents a huge revenue opportunity and a tremendous source of income. If you haven’t already, dedicating time and effort to building an online presence on social media will see you reap its benefits this year.
- Buy Now, Pay Later will continue to be popular in Southeast Asia
Buy Now, Pay Later (BNPL), in which consumers can choose to make purchases, split the cost and pay for them at separate dates, often interest-free, is expected to reach USD 576 billion by 2023. Countries such as Australia, India, China, Singapore, Indonesia, and Malaysia recorded strong demand for BNPL payment options in 2022. From Atome to GrabPay Later, some of the largest BPNL companies are in Southeast Asia, and the competition will continue to heat up.
A large population of young people in Southeast Asia are primarily driving the demand and market growth. With the rising demand for BNPL, retailers must provide more transparent and flexible payment solutions at point-of-sale. And in this challenging economic climate, the flexibility of BPNL solutions will appeal even more to consumers.
- Continued increase in mobile payment transactions
Survey results from Juniper Research show that mobile contactless transaction volumes will significantly exceed contactless card (credit card or debit card) volumes by 2023. Transaction volumes for mobile payments will increase by 92%, from 26 billion in 2021 to 49 billion in 2023. This prediction means more people will pay using their e-wallets stored on mobile phones. Therefore, retailers who haven’t done so need to adapt by choosing a smart POS solution that lets consumers tap to pay using their smartphones.
For small businesses, another mobile payment solution is set to take off. In 2023, Tap to Phone or Tap on Phone technology will transform the merchant into an omnichannel business without requiring additional hardware. Tap on Phone technology is when a merchant installs a mobile app, turning the smartphone or tablet into a contactless point-of-sale (POS) terminal. The terminal can receive payments from customers’ contactless cards or mobile wallets. As smartphone technology advances, e-payment solutions will become increasingly convenient. As a result, retailers can look forward to more accessible payment collections.
- Customer experience
- Seamless shopping experience through data collection
For years, brands have used third-party cookies to track website visitors, improve the user experience, and collect data for targeted ads. Marketers also use them to learn what visitors want to find online. With the phasing out of third-party cookie data by 2024 that has been widely available through Google, retailers will need to increase efforts to synchronise the data they have throughout their organisation. In addition, retailers will need consumer data from various platforms to create a seamless, hybrid journey for their shoppers. All consumer shopping data must be easily retrievable, from warehouses to e-commerce platforms. It should also be accessible by multiple groups within the organisation and updated in real time. Such synchronised data will help retail businesses create personalised experiences for segmented groups of customers.
- Personalisation will be more important
Retailers need to adopt a new data-driven channel model to blend experiences around the consumer. The pandemic has accelerated fundamental changes in consumer behaviour. For example, 46% plan to consolidate shopping trips and shop less frequently. 36% will do more shopping online and only visit stores that provide great experiences. In addition, 43% will shop more at local small businesses. (Source: EY) This means retailers must create an environment where consumers can move across their physical and digital shopping experiences without differentiating between them.
Instead of attempting to replicate online shopping, the solution is for physical retail spaces to create flexible, multifunctional physical spaces. Hybrid spaces that blend offline and online experiences will become more popular. These spaces should showcase products that can be bought through any channel and host various services and events. Such reasons will make consumers want to visit a store, browse and purchase.
Of course, bold and creative store designs are crucial to fulfilling this function. Retailers will need to redesign store layouts for experiential retailing. Sporting goods retailer Decathlon is an excellent example of a company that has taken steps to provide a hybrid shopping experience. The retailer’s Experience Stores allow customers to “discover, touch, try and feel” its products and services, with dedicated areas for testing different sports equipment. Shoppers can also immerse themselves in experiences like virtual reality test zones that simulate camping. It also has in-store spaces that act as convenient pickup points for online purchases.
These 2023 trends highlight the need for retailers to create immersive shopping experiences. These experiences must be seamless, fuss-free, and convenient so customers do not feel a separation when transitioning from online to brick-and-mortar shops. Integrated data in all areas must be well aligned between online and offline. Transparent and flexible payment options with easy cashless payments will also take precedence in physical stores.
Qashier: Your partner for the New Year
The new year brings fresh opportunities for everyone. So start on the right foot and ring in the new year with a reliable smart POS solution like Qashier.
Our smart POS system can handle different operational aspects, from QR code table ordering to table management (F&B), employee management, customer relationship management (loyalty programs), inventory management, data analytics, and cashless payments.