The ONS reported a 40% growth in ecommerce in 2020 since consumers had no option but to shop online during times when the Covid-19 virus was prevalent.
Fast forward to 2023, consumers are changing their shopping habits once again to manage pent up desire for experiences as well as finances during a time of economic turmoil. According to a Forrester report, 73% of all UK sales and 76% of all U.S. sales are expected to be offline in brick-and-mortar stores this year.
The growth of offline sales will inevitably lead to a decline in ecommerce – only 20.8% of total sales worldwide is expected to be online. Large online retailers such as Amazon have already scaled back their warehouse and fulfilment centre expansion plans to deal with the decline of online sales. In fact, Amazon has been focusing more on opening Amazon Go stores.
Meanwhile, retailers such as M&S, Crew Clothing, and Homebase have ambitious plans to open new stores to account for the demand for in-store shopping. New shopping centres such as Battersea Power Station and revamping of existing ones is going to encourage shoppers further to shop in-store this year.
In-store shopping in 2023 is all about the experience so retailers should be ready provide great products, service, as well as experience. This can include buy now, pay later options, BOPIS, an extra layer of service, technology such as smart mirrors, personalisation. These trends are here to stay.
Let’s take personalisation as an example. 71% of consumers expect personalisation and 76% are frustrated when retailers don’t offer it, according to a McKinsey survey. Consumers are willing to share personal data in return for hyper-specific recommendation based on their browser history, past purchases, age, gender, location etc. Retailers providing high levels of personalisation will increases sales and generated 40% more revenue.
Much like 2022, omnichannel retailing will still be a necessity in 2023. Retailers are now dealing with multichannel consumers who’s purchasing journey could start anywhere, online, offline, social media and more. Some retailers have found their customers research online and often purchase in store. Others have said, for the more expensive products, customers engage with the product in-store and purchase online after searching for the best deal.
Having multiple buying channels gives consumers a level of convenience and satisfaction which they will reward. In fact, omnichannel shoppers shop 1.7 times more than single-channel shoppers and spend more overall.
Thus, having a focus on brick-and-mortar stores this year is crucial. Smaller footprint stores are a perfect balance of having a physical presence without it being too costly. Location and customer experience are important when dealing with physical stores.
However, to successfully choose the best location with the target demographic and provide great customer experience, retailers need to understand their customers: their age and gender, behaviour in store, products they’re interested in, how they navigate the store etc. This is where having good in-store analytics to collect such data becomes important.
Retailers can use video analytics to understand customers’ needs and behaviour to effectively personalise shopping experiences and make the brand more enjoyable.
Please get in contact to discuss video analytics.