With cost of living increases and economic uncertainty around the world there are a lot of questions about how consumers will behave in 2023.Ā
We decided to explore where people might spend more or less next year and how brands can respond to new challenges.Ā
Optimism
While more than half of consumers aged over 55 said they felt financially secure, younger generations are less confident.Ā
Many of us are much more aware of the price of food or fuel but predictions suggest thatĀ financial optimismĀ will increase in 2023 and that people will have a little more disposable income during the year.Ā
Online vs in-store shopping
Itās not surprising that people say they are likely to continue shopping online. WellĀ over half of internet usersĀ are already buying online every week.Ā
However, brick and mortar stores will still have an important role to play. In fact, almost half of Gen Z customers say theyĀ prefer to shop in-storeĀ rather than online. From groceries to clothing there are plenty of brands withĀ store expansion plansĀ in 2023.Ā
Some businesses aim to combine the best aspects ofĀ in-store experiences and online shoppingĀ to attract customers who like to do both. Most importantly, a transition to physical and digital or āphy-gitalā shopping will require a new approach to cross-channel measurement and performance indicators.Ā
Hybrid shoppingĀ experiences using app-based augmented reality (AR) tools are also likely to increase to enhance the experiences of both online and in-store shoppers.Ā
Winners and losers
Spending on travel and entertainment is likely to increase next year after the pandemic restrictions. With money still in short supply, however, we will probably continue to make less expensive ātreat purchasesā, including clothes and accessories,Ā personal care productsĀ and technology.Ā
Larger and more expensive purchases including home appliances and furniture could be under pressure as people return to the workplace and become less focused on their home surroundings. Supply chain issues and materials shortages are likely toĀ increase costsĀ and add to the pressure in these sectors.Ā
Luxury goods
One personās luxury might be someone elseās necessity but price-conscious consumers are likely to cut back on luxury goods.Ā
There are still plenty of people willing toĀ spend on high-end brandsĀ including supercars and timepieces. Even here, however, customers are looking for quality and value and want to buy from brands that are relevant to them.Ā
Bargain hunting
Everyone likes to feel they have found a bargain, but more consumers are now taking time toĀ search for offers and special deals. Value for money will continue to be a priority, so improving the perceived value of your offer will help to increase sales without the need to reduce your prices.Ā
Sustainability
Customers across all age groups are still willing toĀ pay more for sustainable products. As Gen Z consumers play an increasingly important part in the world economy it will be important to recognize what motivates and interests a group that will represent over a quarter of world spending by 2030.Ā
Recyclable and sustainable packaging are becoming requirements for both online and in-store purchases. Ecommerce packaging is currently the largest source of emissions in the sector and isĀ six times higherĀ than for in-store purchases.Ā Consumers sayĀ they are making a conscious effort to buy more sustainable products and that they are more likely to buy from retailers if their packaging is sustainable.Ā
Social commerce
Younger shoppers in particular are using social media for product research, so making sure product details are clear and compelling will be a requirement for 2023.Ā
Social media shoppingĀ is also becoming more influential and 20% of impulse buyers say they use social media ābuyā buttons to make unplanned purchases. Enabling your customers to discover and buy without leaving their favorite platform is becoming an expectation, so the experience must be as easy as possible.
Chargeable returns
While there has been a long-standing expectation that online purchases can be returned for free, this could change in 2023. Free returns add to retailersā costs and encourage the likelihood of over-ordering. Some brands have already introducedĀ charges for returnsĀ and this trend is likely to continue.
Shipping commitments
A recentĀ survey of 3,000 consumersĀ found that a quarter would give up coffee for a year in exchange for free shipping on their online orders. In addition to fast and free deliveries, meeting promised delivery dates is also important.
Transparent shipping timelines and updates about delays are becoming essential. Poor experiences can damage reputations and make it less likely that customers will return.Ā
Be prepared for consumer expectations in 2023
At Williams Commerce our experienced team and partnerships with leading commerce platforms mean we canĀ digitally transform your business. Whether you are planning to build new online and in-store experiences in 2023, want to improve your revenue growth, or integrate your systems for improved efficiency and transparency, we can help.Ā Ā