Retailers Report 2023: Looking ahead
2022 was a whirlwind of global uncertainty, and those effects are seeping into the consumption habits of 2023.
As we head into a new year, more than 80% of individuals are anxious about the rising cost of living prices, with 75% worried about the prospect of a prolonged economic recession. Despite these changes in buying habits, and concerns from the consumer, in 2023 retailers can use this to look for the right opportunity to pull ahead of the competition.
We have been championing retailers for over 100 years as award-winning specialists in wholesale distribution. To help navigate retailers to a happy and successful new year, and maximise returns on the everchanging picture of consumption habits, we surveyed Harrison’s Direct customers, with questions spanning a number of topics, from product preferences, to trends for 2023, and what is most important to their customers.
Biggest concerns for 2023
From our recent survey, it was revealed that the rise of living costs is the most concerning external factor (81%) going into 2023 for retailers, with ‘consumer caution’ coming in at 23%.
The third annual UK Consumer Trends report has revealed that 46% of British consumers are positive as they go into 2023, with 30% the contrary.
One of the biggest takeaways however, is that many shoppers are mostly worried about energy bills (59%), and that 61% of consumers are pulling back on spending because of this, alongside the worries of the Ukraine war (7%), and the increase in petrol prices (6%).
The report also suggests that people are steering away from rampant consumerism, and many will be turning to discount shopping to combat the rising cost of living. While the price of products will have a heavy influence on consumer buying decisions in 2023, quality should not be overlooked as consumers look to buy fewer things and keep them for longer, according to the survey conducted by Attest.
Consumerism stems from the reaction of changing economic conditions, and as retailers, it’s an opportunity to support consumers by providing them with product options that complement their buying habits, and the products you offer are value-driven.
This year will be a test for retailers and the consumer alike, which may be an indication of the shift of consumerism reactive of the pandemic, into a long-term pattern. It’s a good idea to keep up with the demands of the marketplace, and be well positioned to maximise your profits.
The year of social media trends
Social media is now more intertwined with business than ever before, and 2023 will bring many more exciting and challenging developments for retailers. Our survey revealed that around 27% of our retailers now sell their products on social media channels; and this comes at no surprise. The popular social media platforms have integrated and elevated tools for the best business practices, and have allowed for companies to utilise them as not only a tool for brand marketing, but for research purposes too.
The platforms play a significant role in the consumer buying process, amplifying the consideration you must make in your buying decisions and how social media and its trends affect that. They’re a treasure trove of customer data, and give brands real-time data and a cost-effective look into what customers want.
The adoption of social media as an awareness, selling and customer relationship management tool has evolved, and now it’s encouraged that retailers of all sizes use social media, due to its impact on targeting, and the cost-effectiveness it has.
Social media has created a level playing field for small businesses and retailers unlocking a refreshing relationship with their customers, and serves as a liaison between the two. Consumers gravitate towards brands that listen to them and to the marketplace, so ensuring that you stock products that the customer wants is the most important thing.
For years, consumers are more likely to buy when they get recommendations for a person they trust, and particular platforms play their part in giving recommendations more than others. Consumer recommendations and trends are heavily featured on the more visual platforms such as, TikTok and Instagram, which explains the huge influence online trends now have on consumer buying habits.
TikTok: Changing the landscape of consumerism
TikTok has a growing commerce power, and this is evident when overseeing the hashtags trending on the platform. #TikTokMadeMeBuyIt in particular has mustered some 9.5 billion views, and that is growing as more and more trends are introduced.
Gen-Z – those loosely born between 1995 and 2010 – are still young in the landscape of consumerism, but their buying powers are significant, particularly because they are of the age bracket with the most disposable income. According to a Bloomberg report from last year, young students and professionals command $360 billion in disposable income.
4 out of 5 of Gen Z shoppers now use TIkTok for getting inspiration, and finding new brands.
The fast-paced marketplace TikTok is now influencing means that the supply chain is having to keep up with the demands too. 55% of Harrison’s Direct customers say that an ‘Ease of Ordering’ is something that they look for when purchasing from a wholesaler, with 37% saying that ‘Delivery’ is desirable.
It’s highly encouraged that as buyers you monitor TikTok and its trends to keep up to date with what the consumer wants, as they’re more than likely getting inspiration from the platform.
A prime example of TikTok’s powers is its influence on the cleaning industry. To date, #CleanTok has racked up over 58.8 billion views, and many users are finding new tricks and tips of cleaning their houses with useful hacks. Not only does it give users motivation to clean their home, it also gets the spending on household cleaning products. Going into 2023, it’s been revealed that around 47% of Harrison’s Direct customers will be purchasing household cleaning products over the next 3 months, whilst Health and Beauty took the top spot with 68% most likely to purchase.
Sustainability
27% of respondents in our recent survey highlighted that their environmental impact is of the highest importance. As we head into 2023, shopping sustainably will be at the forefront of consumers’ buying decisions, and will heavily influence what they buy, and where they choose to buy it.
Despite the rising uncertainty in the cost of living crisis, it’s important to highlight that in a recent BCG report, 51% of consumers have a growing desire to buy locally and from purpose-driven companies, reinforcing the power of UK retailers in today’s saturated market.
Consumer’s awareness of sustainable shopping is only increasing, with the over-saturated information sources in our day-to-day lives. The annual Social Media Trends report in 2023, conducted by Talkwalker, in partnership with Khoros, has revealed that 82% of shoppers want companies to put the planet before people, and see sustainability as a priority over brand names; and as consumers are concerned about the rising costs of living, they’ll be seeking high quality products which are sustainable and last a long time.
Given the growth and popularity of companies with a positive social responsibility, it’s important to remember that as a retailer, you should be focusing on the short and long term focus of your business, and continue to invest in green schemes and align your product portfolio with that.
2023 will see retailers changing the face of how they combat the reduction of waste, climate change, and eradicating their carbon footprint, which will only help build rapport and maintain long-lasting relationships with their customers; built on trust and credibility.
Feeling optimistic
This year will see new changes, and we’ll all be facing new challenges. But, there will be bright times ahead, with retailers equipped with the right knowledge to handle the pressures.
The narrative can often sound negative, but the landscape of consumerism will always remain, and as retailers, it’s an opportunity to be agile and remain amidst the ever changing wave of the marketplace.