The sky won’t fall, and other retail predictions for 2023
This is the first in a series of articles from members of RetailWire’s BrainTrust panel speculating on coming retail trends and developments for 2023.
The year 2023 is going to be better at retail than expected (that doesn’t mean great, btw) especially for those companies that appeal to the higher and lower ends of the market. Those catering to the middle will likely have a tough go of it.
We’re likely to see a continuation of recent trends, with lower income consumers moving to discounters and off-pricers to stretch their dollars spent on necessities. Higher income folks (who won’t feel the woes of a potential downturn anywhere near as much as the aforementioned) will continue to spend, albeit also for less frivolous goods.
The national job numbers are high and likely to remain that way. Unemployment is low (even with tech companies laying off thousands), sentiment is okay and the general mood from consumers we speak with is not gloomy at all.
So what will happen?
We will start to see more showroom stores, like the new Best Buy models. There are plenty of advantages built in with showrooms, including lower build-out costs, reduced labor/payroll, less on-hand inventory, and lower rent and next day shipping charges, which make this type of investment sort of a no-brainer.
More and more retailers will settle into smaller spaces for the reasons listed above, plus the advantage of getting into more attractive “neighborhood” or high street locations, like J.Crew, Target and Amazon.com (with its c-store concept).
Resale/used/circular retail (pick a moniker) is set to explode. WD Partners’ recent study showed that consumers are receptive to visiting “used” areas in every retail vertical, including big box, consumer electronics, hardware, department stores and, of course, specialty retail. Everything is right about it; fun to shop, good for the environment and inexpensive to boot. When the operational elements are figured out, look for used to be a driving force in retail for years to come.
DISCUSSION QUESTIONS: How do you think the national economy will affect consumer behavior and retail in 2023? Will showroom locations, smaller stores and resale become more prominent over the next year?