The retail industry is reshaping the shopping experience in 2023, redefining not only how we shop and sell, but where we shop and what we buy. The cutting-edge retail trends below are guiding each step of the way.

Square teamed up with Wakefield Research and surveyed 2,000 consumers and 500 retail owners and managers about the retail industry trends that capture where they’re headed in 2023. 

All data cited below comes from the survey results. For a more in-depth look at these 2023 retail industry trends, download the full 2023 Future of Retail report.

1. Retailers are expanding where they sell.

As social media continues to evolve, so do the opportunities for retail. 81% of retailers are planning to expand the number of digital channels they sell on in the next 12 months. 

Online shopping continues to be non-negotiable when it comes to ways to sell products, with businesses reporting that 43% of their revenue comes from online sales, but retailers may benefit from other modes of selling, such as virtual reality. 22% of customers are interested in trying a virtual reality that allows them to experience products in a virtual shop. 

2. Retailers are planning for economic uncertainty.

Amid economic uncertainty, retailers are taking steps to prepare their businesses. When asked what steps they were considering to weather an economic downturn, 44% noted raising prices as their top choice. 

Given the impact of inflation and the rising costs of goods, 88% of consumers say they’d understand if their favorite local business raised its prices. In fact, 38% of consumers would be more likely to shop at a smaller business to support those who may be struggling.

3. Automation can enhance customer experience.

Retail customers are a fan of automation, and, in most cases, they tend to prefer it. 73% of consumers actually prefer that local retailers use automation instead of staff in at least one area of the shopping experience.

According to the 2023 Future of Retail report, 44% of consumers want an automated tool to check product information or inventory. To support this, retailers may consider investing in automated software or upgrading what they currently use to meet the changing needs of customers.

4. Customers want to engage with brands.

Communicating with customers and keeping them engaged is often a delicate balance for any business. Knowing when to send the email or when to promote the sale via text — or both — typically depends on your audience, but understanding where to start can make all the difference. 

The good news is that customers want to hear from businesses they frequent. In fact, 86% of them do. Email ranked the highest, with 60% of consumers listing it as their preferred option. Communicating through Facebook came in second at 32%, noticeably outranking other social media platforms like Instagram and Tik Tok, which are preferred by 17% and 10% of consumers, respectively. 

5. Social and mobile commerce are two of the biggest digital trends in the retail industry — and they’re booming.

From selling on Instagram to launching an online store, retailers are experimenting with multiple ways of meeting the evolving needs of customers. This new omnichannel landscape is thrilling, with 91% of retailers surveyed now selling on social media.

Whether it’s through a fully shoppable store or flash sales, social and mobile selling are made possible by eCommerce tools, helping retailers reach more customers at a time when people may be even more glued to their devices. And it’s working, with 79% of consumers making purchases directly from their mobile devices.

6. Experiential retail experiences are rapidly evolving.

2023 is shaping up to see the return of the experience. While virtual and digital experiences still matter, the in-store experience is returning to prominence and 94% of retailers are focused on enhancing it for their business overall.

Prioritizing modern ways of shopping, like mobile checkout, VR/AR, or QR codes, are a top focus, with 70% of retailers reporting it as their goal. Mobile checkout options and QR codes, for instance, can often create a seamless experience for customers that helps increase engagement and overall satisfaction. Quick mobile checkout methods that incorporate options such as buy now, pay later (BNPL) can also make all the difference for customers by giving them the flexibility they need.

7. The borders between verticals continue to blur.

Businesses are continuing to look for new ways to reach customers and stand out against the competition, and there’s one method that’s just not going away: multi-hyphenate stores. These mixed-use concepts often involve restaurants selling branded merchandise and retailers offering digital services like subscriptions, and they’re becoming increasingly normal.

Nearly three in five consumers have purchased retail items at a local restaurant in the past year, and, on average, 21% of restaurants’ revenue is currently coming from products and services outside of their core restaurant offerings.

8. Flexible payment options are becoming increasingly important to younger consumers — especially Gen Z.

Buy now, pay later (BNPL) options are improving the shopping experience, and customers — especially younger customers — are looking for them. 

While 33% of retailers are currently offering BNPL options, 41% of Gen Z retailers plan to add BNPL to their payment options to enhance their in-store experience. The data noticeably drops off for other generations, but for stores that are searching for ways to bring in a new generation of customers, BNPL options may be worth it.

Source: Square Up