Retail Trends and Predictions: Q1 2023

Retail Trends and Predictions: Q1 2023

Customer talking to cashier

This year, global retail sales are projected to exceed $30.3 trillion, a growth of 4.5% over 2022. But despite this anticipated growth, retailers are faced with increasing uncertainty as they navigate a retail landscape that remains in a constant state of flux. 

According to Deloitte, only about a third of retail executives have high confidence in their ability to maintain or improve profit margins. The culprit, this year, is inflation and the subsequent impact it’s bound to have on consumers—and their consumption habits—throughout 2023. But a host of other trends focused on technology, consumer behavior, and external factors like the economy and housing prices will influence 2023’s retail landscape, too. 

Despite these challenges, retailers have become much more resilient in the past few years. Massive demand fluctuations, supply chain problems, and sweeping changes in how consumers shop forced companies to rethink archaic systems in favor of more flexible and scalable operations. 

The changes keep coming. Staying informed of the latest trends for 2023 is the best way to navigate them. Our overview of what the 4 most impactful 2023 retail trends is gleaned from our own experience, plus the latest research from industry luminaries like Deloitte, McKinsey, and Retail Systems Research (RSR). Let’s jump in.

Trend #1: Omnichannel Retail

According to RSR, one of the top themes for retail in 2023 is relevance. Delivering relevant messaging, offers, product recommendations, and service to customers across all channels is complex, but essential for a good shopping experience. To do this well, retailers must ensure that every customer touchpoint—from website to mobile to physical store—is part of a unified, integrated experience. 

While the RSR data revealed that consumers largely begin their shopping journeys in the digital space, they tend to bounce from one channel and touchpoint to another. When surveyed, consumers indicated that their main goal when shopping at their favorite retailer was finding want at the right price. And yet, while the top priority is price, having a consistent shopping experience is (almost) equally important. 

This chart from RSR’s “What Makes Excellent Customer Experience? Customers and Retailers Weigh In,” lists shopper responses in order of priority:


RSR graph showing consumer shopping trends

Source: Retail Systems Research – March 2023 Benchmark Report

Successfully blending and unifying multiple retail channels into one consistent experience is what we mean when we say omnichannel retail – and it’s a constantly moving target. Recent data from Statista demonstrates that U.S. consumers use as many as 8 different channels when buying a product. 

Physical stores remain the top channel for 40% of consumers, followed by eCommerce websites, and eCommerce apps. Other channels include a mix of both (e.g., buy online, pick up in store), brand websites, search engines and shopping engines.

Many omnichannel retailers rely on distributed order management systems to deliver seamless omnichannel experiences. A distributed OMS uses real-time inventory data combined with capturing orders and facilitating process fulfillment across online and offline commerce channels. 

Statista chart showing consumer trends

Source: Statista

Getting your data, technology, and order management ducks in a row are critical to meeting shoppers’ expectations for relevance, which is why trend #2 on our list is all about inventory management.

Trend #2: Inventory management

Inventory management will remain a top challenge for retailers of all sizes throughout 2023. But why? What’s different now versus a few years ago? Not surprisingly, it all started with the pandemic which kicked off a rapid pivot in consumer buying behaviors, customer expectations, and retailer capabilities. It also exposed some cracks in the entire supply chain ecosystem that we’re still adjusting for. Today’s struggles with inventory are a result of several things including:

  • Panic buying – When the pandemic first hit, consumers stocked up on items like toilet paper, hand sanitizer and other essentials while demand for nonessential products evaporated. This created wild demand fluctuations that are still being felt today. When the dust settled and demand shifted again, retailers found they had overstocks on certain items (or entire categories of items), but couldn’t get others, making inventory management particularly challenging.
  • Ongoing supply chain woes – While some of the problems that tied up pandemic-era supply chains went away, retailers still face challenges in 2023. Global port congestion, limited supply chain visibility, market volatility, inflationary pressure impacting consumer buying behavior, and rising costs are some of what will make procuring inventory challenging according to Deloitte’s 2023 retail industry outlook
  • Shipping delays – Shipping delays can wreak havoc on demand forecasting and inventory management. When perishable goods don’t get shipped quickly or they get stuck in port, they may spoil in transit or incur excess port fees, forcing retailers to abandon entire shipments. And even though rates to ship a 40-ft container dropped by 80% from their peak in April 2022, some ocean carriers are now pulling back on air capacity due to reduced consumer demand. And, of course, retailers still face more mundane, but equally daunting, challenges like labor shortages, weather disruptions, and incorrect labels that lead to delays.
  • Inventory surplusesAccording to Barron’s, chain retailers like Dick’s Sporting Goods and Target are holding more inventory now than in the past. This is another symptom of how challenging it is to predict – and adapt to – shifting consumer needs and priorities in 2023. Inventory surplus causes a host of headaches for retailers. It limits their ability to increase prices, forces them to make huge markdowns to clear space for new inventory, and leads to a general lack of cash flow.

To combat these issues, 2023 will bring with it a renewed focus on inventory management software and updates to existing systems. Technology like Kibo’s flexible, distributed order management system that provides real-time global inventory visibility can help retailers address inventory challenges above by creating accurate, real-time inventory visibility across all channels. This is the best way to avoid overcommit and out-of-stock scenarios, reduce markdowns, and support an omnichannel retail strategy.

Trend #3: Fulfillment/Delivery

In 2023, consumers will leverage the shopping skills they’ve honed over the last two years, blending digital touchpoints with familiar physical channels to procure the items they want. 

Retailers with both digital and physical locations should focus on eliminating friction and accommodating shoppers as they navigate a buying journey that moves from the digital to the physical and back again. Things you should include on your fulfillment-capabilities checklist include:

Fast shipping, within reason – Over 90% of US shoppers expected free 2-to-3-day shipping in 2021, but delivery speed is less important this year. Only 10% of online shoppers said they want same or next-day delivery in 2022, according to a recent Shippo survey. Providing options and being flexible will be key to meeting customers’ expectations around shipping and fulfillment this year.

Physical-digital hybrid options – Consumers want what they want when they want it. But they’re also willing to wait if a specific item they need isn’t immediately available in-store. The point here is to provide multiple options and methods of fulfillment. 

For example, over half of shoppers surveyed by RSR said they want a retailer to offer to ship a product directly to them if it’s not available in store. Consumers are increasingly using buy online pickup in-store (BOPIS) options across multiple countries, but it’s a particularly strong trend in the U.S. 

According to a survey of over 13,000 global consumers 31.5% of U.S. consumers picked up their most recent eCommerce order in-store or curbside in 2022, up from 23% in 2021. It’s not always about price. Consumers also want economy delivery options, meaning an item takes longer to arrive, but shipping is lower. 

A seamless fulfillment experience – Regardless of what shipping or fulfillment method that a shopper ultimately chooses, they expect a seamless and error-free delivery experience. 76% of shoppers surveyed by RSR said that it’s the retailer’s responsibility to deliver products to consumers no matter what. A good experience is often about good communication. Providing order updates, delivery tracking, and a variety of pickup options all work towards creating a better experience.

Automated order management – A comprehensive order management system that leverages automation is key to helping retailers overcome the challenges and complexities around omnichannel fulfillment. Your OMS should integrate with popular domestic and international shipping partners, provide real-time inventory visibility/optimization, facilitate accurate order capture, and optimize order routing to maximize delivery speed.

Trend #4: Retail product subscriptions

Retail product subscriptions is another pandemic-era trend that continues into 2023 as consumers seek convenience, variety, and personalization. Subscriptions for everything from pet food and supplies, household products like laundry detergent and toilet paper, and beauty, wellness, and fitness products continue to gain traction and popularity with consumers. 

According to My Subscription Addiction, some of the most popular retail subscription boxes in 2023 include FabFitBurn (wellness and lifestyle products for women), Kiwo Crates (educational and creative products for kids), and Ipsy (makeup and skincare products aimed at teens). Creating or enhancing a product subscription offering requires the right technology.  

Some developments to focus on this year include:

  • Cultivating subscriber relationships by offering customization, loyalty programs, and feedback mechanisms.
  • Creating the optimal acquisition environment by optimizing pricing strategies, offering free trials or samples, and leveraging social media and influencers.
  • Offering customization to increase customer lifetime value (LTV) by allowing subscribers to choose products, delivery frequency, packaging options, and payment methods.
  • Prioritizing payments as a growth strategy by reducing payment friction, optimizing payment methods, and preventing involuntary churn due to payment failures.
  • Ensuring operational efficiencies by investing in supply chain resilience, automation, data analytics, and sustainability.

A subscriptions management platform enables you to offer various subscription models focused on product replenishment, access to new items, and custom curation tailored to each shopper. 

Kibo’s Subscription Management tool lets retailers offer subscriptions for digital goods, physical goods, and services and accommodate a flexible shopping cart to handle subscription and non-subscription items. All these features are important to consumers as they incorporate new shopping behaviors, technologies, and tools into their buying journeys.

Embracing the sea of retail change

The retail sector faces a challenging environment in 2023. According to sources like Deloitte and Economist Intelligence, retailers can embrace changing consumer needs and expectations by offering seamless experiences across channels, customizing products and services to individual consumers (e.g., the product subscription model) and by focusing on was to cultivate authenticity and connection. 

Some strategies and approaches to consider as you prepare for the year ahead include:


According to RSR, sustainability is becoming an imperative in 2023. But retailers and consumers view it differently. 79% of consumers change buying preferences based on sustainability, but only 37% of organizations believe that to be a true fact. More consumers are staying away from companies that follow non-sustainable practices, such as single-use plastics and contributing to deforestation.

This disconnect represents an opportunity for smart retailers to put sustainability at the forefront of their business model. Many retailers are leveraging their order management system to implement sustainable fulfillment practices. There are several ways order routing can help with sustainability efforts:

  1. Minimizing transportation emissions: By using order routing, companies can optimize their delivery routes, reducing the total distance traveled and the associated transportation emissions.
  2. Reducing waste: Order routing can help companies to better manage their inventory levels, reducing the amount of excess stock that is held and ultimately wasted. 
  3. Sustainable packaging: Order routing can be used to source orders from distribution centers or warehouses that have recyclable packaging or right-size packaging to minimize waste.

Consumers – particularly younger generations – value sustainability. Making it a priority can help you weather the uncertainty of the current retail environment, gain new customers, and build loyalty with existing shoppers.

Supply chain capabilities

While you can’t anticipate every issue, investing in technology and working with partners that help you expand your supply chain capabilities can help you minimize problems. For example, last-mile delivery capabilities and reverse logistics technology enable you to streamline and expedite shipping, better manage returns, and add transparency to the fulfillment process. 

Reverse logistics, which moves inventory from the customer back to the seller or manufacturer, requires an order management system that can handle things like inventory tracking, quality control, transportation logistics, and data visibility. 

Last-mile delivery is when merchandise is transported from the distribution hub or store nearest to a customer’s physical location. It’s crucial for things like food delivery and same-day or next-day ordering. Retailers can improve their last-mile delivery capabilities with the right technology, for example, by centralizing all logistics data, providing real-time driver tracking, and automating route planning and dispatch.


Being flexible about how you earn money, including exploring and adding new revenue streams, is the best way to prepare for the future. Some of the opportunities for retailers in 2023 include leveraging retail media networks to generate new revenue streams from advertising, expanding into new markets and segments, and adopting innovative technologies like artificial intelligence and augmented reality to enhance customer engagement. 

Walmart Connect is an example of how a traditional retailer successfully expanded into the media space. They made $2.1 billion in advertising revenue in 2021 by offering ad products and other media products to advertisers, all of whom were also Walmart suppliers. 

Retailers are also looking into flexible solutions for fulfillment. Flexible fulfillment enables retailers, manufacturers, and distributors to quickly pivot fulfillment strategies based on consumer trends and efficiently fulfill customer orders through a variety of channels, such as in-store, online, and marketplaces. This strategy typically requires a modern order management system that can manage complex inventory and omnichannel distribution models and has extensible fulfillment capabilities.

The endless aisle 

An Endless Aisle solution allows customers to order from your entire inventory, even if it’s not in-store or online. It pulls on your entire inventory across all store locations and distribution centers. This trend is gaining widespread attention as more brands look for ways to extend their product offerings beyond what is available in-store. 

Endless Aisle technology enables retailers to use their existing locations to manage inventory more seamlessly, selling inventory at full price more readily while reducing overall storage needs. For customers, it makes products more readily accessible. Shoppers can browse and order products from a retailer’s entire catalog and have them shipped to their homes or their nearest store location. 

Social commerce 

Selling on social platforms via social storefronts or shoppable posts is a great way to connect directly with consumers while augmenting your existing retail channels. And with social commerce projected to reach 20% of global retail eCommerce sales in 2023, it’s also effective in generating sales. 

Social commerce allows you to leverage tools like video, word-of-mouth, and viral messaging to reach younger consumers. Think of it as a way to create an irresistible experience where customers can shop for products and services on their own terms and in their own spaces.

At Kibo, we offer composable commerce solutions such as order management, extensible order routing, subscriptions, inventory visibility, eCommerce, and more. Learn More about our Order Management Solution or register for a 15-minute demo.

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