Uncertainty remains the watchword for brands and retailers. From supply chain challenges to logistic price shocks and overstock issues, the past several years have been a wild ride.
And while conditions are improving, this uncertainty remains: Many companies aren’t sure how best to position themselves to make the most of current markets and avoid potential pitfalls.
Explore the top trends in the global economy, their impact on specific markets, and what companies can do to survive and thrive under changing conditions.
This period of time offers challenges and opportunities for brands and retailers. Here, three broad trend categories are critical: Ecommerce, brick-and-mortar businesses, and consumer expectations.
On the ecommerce side, several trends in the global economy are set to impact business operations. First is the growing impact of viral videos, especially on platforms like TikTok. With billions of users, the social site is a potential profit magnet for brands — if they can partner with the right creators and target the right audience.
Also impacting ecommerce is the rise of cryptocurrency payments. Despite ongoing uncertainty in this industry, a recent Deloitte survey found that almost 75% of U.S. retailers plan to accept cryptocurrencies as payment in the next two years.
When it comes to physical retail, trends on track for significant impact include automation and sustainability.
When it comes to automation, businesses must be prepared for the widespread adoption of contactless payments and self-checkout technologies that let customers complete transactions ASAP.
From a sustainability perspective, brands need to clearly communicate intention and action.
According to research firm Capgemini, 79% of global consumers are now changing their purchase preferences based on sustainability.
From a shopper perspective, personalization and the omnichannel experience are consumer trends to watch.
According to Salsify’s “Consumer Research 2023” report, a survey of more than 6,000 shoppers in the U.S., Great Britain, France, Germany, and Australia, 68% still plan to shop in-store. However, 38% of these shoppers used mobile devices for product and price comparisons while in-store.
This means that companies can’t afford to capture just ecommerce conversions or brick-and-mortar businesses — they need omnichannel strategies capable of doing both.
On the personalization side, McKinsey & Company notes that 71% of U.S. consumers now expect customized experiences, and 76% get frustrated when this doesn’t happen.
Retailers like Sephora are getting this right. The company offers a “Skincare Routine Quiz” that helps provide customers with a personalized skincare product lineup, while also helping the company collect valuable customer data to increase overall personalization.
Trends in the global economy are also impacted by local market factors. Here’s a look at what five markets may have in store.
In the U.S., a prominent retail economy trend is the rise of merchandise returns tied to omnichannel shopping. As noted by Deloitte, online purchases have a return rate of 30% compared to 10% in-store — largely because customers can’t see, feel, or try on items.
As a result, there’s a growing need to create product pages that don’t skimp on the details and that include new technologies like augmented reality (AR) to help customers find what they like — and keep it.
For U.K. businesses, data suggests a slower retail year ahead. As noted by Reuters, 33% of U.K. households will likely have enough money just for essentials, with only 5% able to spend freely. Predictions put retail growth in the country at just 5% this year, meaning businesses will need to stand out from the crowd if they want to capture business.
Fifty-three percent of French business leaders expect a recession this year, while 63% say supply chain issues are worse than in 2022, according to JP Morgan Chase. This creates a brand and retail market that puts companies in a position of spending more to get less, meaning every consumer conversion counts.
In Germany, the country’s HDE retail association notes that while consumer sentiment has been experiencing a positive upward trend for the past five months, it remains below historical averages. While the association suggests that if the trend continues, it could have a positive impact on national economic recovery, the situation remains uncertain for brands and retailers.
According to professional services firm KPMG, Australian retailers say their biggest challenge in 2023 is consumer confidence. What’s more, 58% say that the biggest area of consumer expectations — and the most significant potential challenge or opportunity in building confidence — is in price, followed by customer service (44%) and online delivery speed (38%).
Both consumers and businesses have a role to play in evolving global markets.
For brands and retailers, it’s all about delivering a seamless experience that allows customers to shop when, where, and how they want.
In practice, this means creating and implementing omnichannel strategies that allow consumers to connect with companies using the channel(s) of their choice.
For consumers, navigating the new market landscape means making sure they’re equipped with as much information as possible to help improve purchase decision-making.
This often takes the form of hybrid digital/physical shopping experiences that combine in-store product evaluation with online comparisons for customers to ensure they’re getting the best deal and the best quality.
To facilitate this effort, companies must create winning shopping experiences that address both trends in the global economy and incorporate local market factors.