2023 Retail Trends: Video Emerging Leader in Tech Innovation and Retailers to Double Down on Data and Digital Literacy
2022 was a year marked by innovation. Retailers increasingly dove into immersive experiences and leveraged tech such as artificial intelligence and machine learning to automate processes and increase efficiencies.
It was, however, also a year marked by challenges. COVID continues to plague the industry, and the bumpy economic climate, stifled by inflation, is impacting retailers and CPGs across the globe, leading to layoffs, stores closing, and overall more mindful, strategic, long-term ventures rather than big investments with an eye toward quick implementation.
So what does 2023 hold for us? Expert consultants, analysts, and vendors from across the retail industry shed light on what retail can expect in this new year.
From transforming consumer journeys to making huge advancements in technology, the retail industry is prepared to tackle obstacles new and old in order to keep innovating and elevating the consumer experience.
A Broad Look at the Industry
Retail and CPG president of SymphonyAI Manish Choudhary sees data being increasingly leveraged to make real-time decisions, while the next-gen store will lean on this data for personalization purposes. And what of the supply chain, which has taken a hard hit in 2022? Choudhary predicts resiliency is the name of the game for the new year.
IDC made several predictions for the year in their recent IDC FutureScape: Worldwide Manufacturing 2023 Predictions report (#US48630122) — many of which focused on technology.
The research company predicts that by 2024, digital-first operations enabled by 5G connectivity will improve worker safety, which could result in a 20% reduction in lost time accidents. Additionally, IDC predicts that by next year, 40% of manufacturers will have deployed AI-based tools across their enterprise to support the decision-making process and maximize the value of data. This could result in up to 5% improvement in revenue/profit.
But how many of these efforts are continuations of initiatives long in the pipeline, and how many will grow as new ideas in 2023 — and how many will require an infrastructure overhaul? According to SmartSense president Guy Yehiav, 2023 will focus more on “let’s do more with what we have” instead of adding new hardware or software capabilities.
Data, Consumer Targeting, and Privacy Practices
2023 should see more of a shift toward real-time and predictive solutions, says Diane Keng, CEO and co-founder of Breinif.
“Brands that can leverage data in real-time and provide dynamic predictions and experiences will differentiate themselves vs. brands that only look at historical data,” Keng adds.
Hyper-personalization will be an area of focus, says Rajesh Varrier, SVP, head of digital experience and Microsoft business at Infosys.” It will continue to prevail with targeted campaigns based on first-party (data collected directly from customers) and zero-party data (data shared voluntarily by a customer).”
As we move toward a cookie-less future, brands must look for new ways to collect valuable customer data, while adhering to privacy laws.
“With tightening data privacy restrictions, retailers must be prepared to leverage alternative solutions to reach new customers, such as tapping into accessible first-party data from other sources, and asking consumers to consent to receive engaging marketing email newsletters,” says Luke Amery, CEO and founder of Codisto. “Online retailers set themselves up for success if they adopt a comprehensive e-commerce tool that optimizes processes to make these efforts successful.”
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Technology: Video Will Grow in 2023
There are several areas that retailers are zoning in on for 2023, including artificial intelligence, machine learning, and video. According to Globaledit and CoCreativ CEO Mathieu Champigny, the company is seeing growth in video content, showing that 18% of SKUs are getting a video component.
“Our clients tell us that their 2023 budget will include an additional 15% to 20% of SKUs getting a video for their e-commerce website, so the growth of e-commerce video production is just at its infancy.”
But a successful video strategy requires more than just “creating a visually-pleasing video,” says Amit Erental, senior manager, business lines strategy, at Cloudinary. In order to create high levels of engagement, it will be necessary for retailers to implement AI and ML to truly understand a customer’s wants and needs.
“When integrated effectively into the video tech stack, these technologies make it possible to enhance all aspects of creative design, optimization, and personalization at the immense scale required by modern commerce,” says Erental.
Additionally, Erental says that as consumers rely more on visually-rich media, brands will need to make their content more accessible, building in resources “for individuals of all auditory, movement, sight, and cognitive abilities to understand, enjoy, and absorb content.” This includes increasing the use of subtitles and sign language, and tapping lighting and brightness alternatives.