Retail industry trends are moving faster than Usain Bolt on a travelator. With more ways to shop than ever before, retailers need to find ways to deliver against consumers’ sky-high, ever-changing expectations.
So what are consumers buying right now? And what are the major shopping trends to watch in 2023?
Luckily we’ve got bags of consumer insight at the ready to help you work out what’s next for the retail industry. Let’s jump right in.
Top 10 retail trends worth watching:
- Hybrid shopping
- Frictionless delivery
- AI and personalization
- Augmented reality
- Inspiration-led purchase journeys
- Social commerce
- Impulse buying
- In-store efficiency
- Sustainable shopping
- Luxury goods
Unlock deeper insights into retail trends
1. Hybrid shopping
Globally, 59% of consumers would rather shop online, while 41% would rather shop in-store
Just because baby boomers are the only generation who’d rather shop in-store (54% say this), it doesn’t mean you should rule out in-store shopping. Quite the opposite, actually.
Over 2 in 5 Gen Z say they prefer it to shopping online, a figure that’s remained steady since Q3 2020. This retail trend is a reminder that despite digital advancements, the physical store experience still holds a lot of value for older and younger shoppers alike.
Brands should focus on creating seamless, integrated omnichannel retail experiences that offer customers the best of both worlds, however and wherever they choose to shop.
So what does that look like? “Phygital retail” is a good solution for stores – combining the speed and convenience of online shopping with immersive in-person experiences and top-notch customer service. Look at Sephora, who give customers the option to try on makeup in-store or via their AR-driven Virtual Artist App. Their success aligns with our data; when shopping in-store, US Gen Zers and millennials want to be left alone (as if shopping online), so offer immersive product demos they can interact with on their own. If they need help from staff, they’ll ask for it.
Streamlining the checkout experience will also help win over older shoppers – and the same goes for online shopping. Prioritizing fast delivery and free returns is an easy win, as 28% of US baby boomers say they buy more online when returns are free. More on this next.
2. Frictionless delivery
83% of US online shoppers say free shipping is important to them when shopping online
Our on-demand world has raised the bar for the retail supply chain. Speed is just as important as convenience, from fast checkout to express delivery. And if you can’t meet consumer expectations? You can bet your bottom dollar your next best competitor will.
As retail trends go, this one isn’t going anywhere. Among US baby boomers, same-day delivery (+39%) and next-day delivery (+10%) have both grown in importance as key purchase drivers since Q2 2021. And looking at the wider consumer pool, fuss-free returns are a big selling point for 64% of US online shoppers.
In the same timeframe, the following factors have also grown in importance for online shoppers in the US:
- Loyalty points (+9%)
- Good reviews from other consumers (+7%)
- Special offers (e.g. buy one, get one free) (+7%)
- Coupons/codes (+7%)
This growing interest in loyalty points is also true when it comes to in-store shopping, rising 11% in the same timeframe. In the current cost of living crisis, it’s likely Americans are seeking rewards that help their money stretch further.
3. AI and personalization
Younger US shoppers stand out for wanting tailored recommendations when shopping online
Despite the negative rep it’s getting in the media, 65% of Gen Z are actually excited about the development of AI (artificial intelligence) and believe it will benefit society. Brands in the retail industry would be mad to ignore it.
Not only is AI useful for creative purposes, it’s also an effective way to improve omnichannel shopping experiences. Retailers can quickly understand customer preferences, then personalize promotions and product recommendations across ecommerce sites, social media, apps, and marketing channels.
Convenience is key to success. Zara’s AI robots are a great example of automation being used to speed up collection and cut down queue time, while online giant Amazon has rolled out AI-powered shopping with their checkout-free “Just Walk Out” experience. These examples are forcing other retailers to step up their game, as consumers now expect this level of ease elsewhere.
Use AI to create customized, seamless shopping experiences that boost customer loyalty. People want to feel seen and understood by brands.
4. Augmented reality (AR)
24% of Instagram users use filters every month
Now an integral part of social commerce, AR is expanding: catering to hybrid shopping experiences, and fast becoming a solutions provider for home goods industries.
The more personalized, interactive, and frictionless you can make the virtual shopping experience, the more effective it’ll be. Giving consumers a clearer idea of what they’re buying will also help reduce returns.
It’s clear this tech is a hit with younger audiences, so it’s worth every retailer experimenting with it to find new ways to engage today’s shoppers and drive more tailored experiences.
5. Inspiration-led purchase journeys
Gen Z are more likely to use the internet to find new ideas and inspiration (49%) than to research products/brands (41%)
These days, people aren’t necessarily looking for something to buy. With more consumers going online to discover something new, inspiration is playing an increasingly important role in retail purchases.
It’s a retail trend primarily driven by younger shoppers, with social media ads now the top way Gen Z find new brands and products – even beating out search engines. We all know social platforms are packed with tempting opportunities to buy, and luxury buyers in particular can be swayed by a well-placed “Buy now” button.
With older consumers starting to follow suit, retailers should optimize their ad targeting across the board to entice shoppers to buy on a whim. People want to be inspired.
6. Social commerce
Around 1 in 5 Gen Z say they’re more likely to buy a product with lots of “likes” or positive comments
As we just covered, social media is an incredibly powerful selling tool, with social ads creating an inspirational path to purchase for many brands. Temptation is everywhere – with opportunities to buy blended into everyday interactions, social shopping feels like the most natural thing in the world. Users can easily check out in a few clicks.
Gen Z and millennials’ standout reasons for impulse buying include using the “buy” button on social ads, and influencer/celebrity recommendations. This trend just goes to show what a crucial part of the omnichannel retail experience social commerce is.
Social commerce goes hand-in-hand with the rise of livestream shopping, which continues to gain traction. Globally, consumers in APAC and LatAM are most likely to say they use social media to watch livestreams; they’re 16% and 17% more likely than the average consumer to say it’s their main reason for using it. It’s no wonder TikTok is expanding its in-app shopping capability with “Trendy Beat” – a place to buy products that go viral.
By tapping into what’s culturally relevant to target audiences, brands can share timely inspirational content to drive mega sales on social media. Pay attention to what audiences want, and find ways to reflect this in your messaging.
7. Impulse buying
47% of impulse buyers say taking advantage of sales/deals is their biggest reason to splurge
While it’s true people are becoming more price-conscious, financial optimism isn’t as low as you might expect. Looking at our July Zeitgeist data, 39% of consumers said they save the amount of money they want to, which may explain why many are still treating themselves to everyday luxuries.
One of the most interesting retail trends? Impulse buying is on the rise. Younger shoppers are more likely to impulse buy – and as we already know, they’re using social media much more for inspiration and product research. In the US, over a quarter of Gen Z say they often make impulse purchases, up 14% year-on-year. But what about wider audiences?
In January, 43% of consumers said they planned to spend less on treats/luxuries, which shows how attitudes have changed despite all the negative news on inflation and rising prices. So what are shoppers willing to splash out on now?
In the last year (since Q2 2022 compared to Q2 2023), the number who purchased the following in the last 3-6 months has increased:
- Travel tickets (+10%)
- Vacations abroad (+20%)
- Domestic vacations (+11%)
It’s clear people are still prioritizing experiences, buying big ticket items like these on a whim to treat themselves. Impulse spending is a big opportunity for ecommerce, and retailers who can best target the needs and desires of these customers will reap the rewards.
8. In-store efficiency
64% of US online shoppers say product availability and store tidiness is important to them when shopping in-store
Many brands already understand that consumers aren’t ready to walk away from the high street. The likes of Kohl’s, Target, and Barnes and Noble all plan to open smaller-format retail stores in 2023.
Meanwhile in the UK, a new initiative has been introduced to spruce up London’s Oxford Street and help up-and-coming businesses open pop-up shops in this prime location.
The main thing to keep in mind? Great customer experience is still at the heart of in-store shopping – and in fact, all future retail trends.
9. Sustainable shopping (sort of)
58% of consumers would rather pay more for an eco-friendly product
On the surface, this sounds like a positive move for the retail industry, but let’s look at the bigger picture here: consumers’ desire for brands to be eco-friendly has declined. So how do those two retail trends align?
It’s no secret they don’t. Consumers can be contrary, and what they say they do doesn’t always match what they actually do. Our Core Plus research sees a similar downward trend across four key European markets. When choosing an energy provider, the number of consumers saying environmental credentials are the most important factor has plummeted 16% since Q1 2022.
People have good intentions. But as prices rise, sustainability is becoming more of a luxury; consumers will only make eco-friendly choices if they can afford to.
10. Luxury goods retail trend
Consumers in APAC are 13% more likely to buy a product now at full price – the most likely of all world regions
The difference in behavior between “aspirational” luxury buyers and the ultra-high earners keeps on growing. With challenging living costs in mind, both high and low earners are cutting back on luxury goods – but a few are actually splashing out and spending more on big ticket items. (Remember what we said about impulse spending?)
Gen Z and millennials are a major driving force behind luxury sales right now, and brands like Ralph Lauren are seizing the opportunity by offering digital-first experiences that appeal to younger shoppers. With 66% of Gen Z still living at home with their parents (and a financial safety net), they have more spending power than you might think.
“Quiet luxury” is also having a major moment in the Asia-Pacific (APAC) region, where consumers are buying minimalist, less flashy goods. Quality matters more than price to luxury buyers here, being the top reason they buy a luxury product. If infusing this into your brand messaging isn’t key, we don’t know what is.
Key takeaways
Looking at these top retail trends, the future of shopping points in one direction: Frictionless retail. Expect to see this take center stage as physical and digital journeys become more interlinked and personalized with the help of AI and emerging retail technology.
Ultimately, it’s about listening to what consumers want. Simplicity, speed, and flexibility are all key to enticing shoppers and winning brand loyalty in an increasingly competitive retail landscape.
Why are retail trends important?
Retail trends not only help you shape and improve the customer experience, they also steer businesses in the right direction (more ROI, please and thank you). Staying ahead of today’s top retail trends will help you:
Gain a competitive edge
If you don’t keep up with trends in the retail industry, you’re fighting a losing battle. Use on-demand consumer insights to quickly understand what’s driving shoppers to buy, and you’ll uncover cross-market opportunities you never knew existed.
Shape your strategy
Knowing the retail trends that matter helps you make better data-led decisions and stay on top of what matters to your customers at any given time. Keeping your finger on the pulse is how you keep revenue rolling in – even as things change.
Manage customer expectations
Customer expectations are sky high, so you need to know exactly what they want from you, and how best to deliver it. This is becoming increasingly vital to customer satisfaction as retail expectations continue to shift.
Retail Trends FAQs
What are retail trends?
Retail trends are key changes in the retail sector that affect the way customers shop and businesses operate. They can be influenced by multiple factors, like new technology and the economic climate.
How do you gauge future retail trends?
To get a better steer on what’s happening in the market, look to consumer insights. Changes in consumer behavior around how, where, and what people are a big indicator of wider shifts in the retail landscape.
