Retail Market Insights 2023
From staff shortages to a potential economic downturn and evolving consumer behaviour, it's essential for business owners to stay informed about what's on the horizon. In this blog post, we'll delve into what the year ahead may hold for your business, and explore strategies to help you adapt and thrive in a changing landscape.
Let’s start off with the elephant in the room; a looming recession. The mention of the ‘R’ word can be daunting, however, recent reports indicate that the recession likely isn’t going to be as long (or bad) as originally thought, especially for the retail industry.1
Retaining talent, finding skilled candidates, and competing with increasing salaries all while driving sales and the success of your business will be at the forefront of people's minds. However, the retail industry has faced these challenges (although driven by different external factors) since 2020.
Candidates are well aware that we are in a ‘job seekers’ market. They are much more likely to move around rapidly and jump to wherever will offer better pay and perks. To counteract this we are seeing businesses increasing their focus on strategies to engage and retain talent. Companies are looking for more internal progression opportunities for their staff to decrease turnover, a widespread increase in salaries across all sectors has left employers with no choice but to align their salary packages to meet expectations in order to hire and retain talent.
However, despite the looming recession, there aren’t likely to be major layoffs in the retail industry. Businesses are already cognizant of the impacts of staffing shortages and will carry the lessons learnt over the past 3 years into decision-making when the recession hits. In some cases, we are seeing employers hold back from increasing their headcount in growth roles for the foreseeable future and opting to focus on business-critical roles in all channels across shopfront and support office.
Luckily for store owners, after the boom of pandemic-driven online shopping, we are now seeing a growing shift towards the return of in-store shopping and greater amounts of foot traffic, with many retailers investing in refurbishments and new fit outs to take their customer experience to the next level
Just as businesses reevaluate their spending, consumers are doing the same with an increased interest and preference for higher-quality items that last longer so consumers can get more value for money. There has also been a large shift in what drives consumers' decisions to purchase from a company, aligning your ethos to your products and integrating these at every touchpoint for the consumer will help drive more success and sales for your business. Also over the last few years, consumers have been shifting their focus towards products and services that are sustainable and ethically sourced. Combining the most recent shifts in consumer habits to tell a story about your product and demonstrate how it aligns with their values highlighting it’s high-quality is a surefire way to gain their interest.
For business owners, it’s imperative to take ownership of the performance of your business. Review the productivity of each employee, analyze the data and review the output of your business to identify any gaps or areas that could be improved. If the result is not positive, implement performance metrics and processes to drive the right behaviour. This is important for two reasons, firstly it will give you an understanding of what areas to focus on to ensure your team is retained and engaged (the recession is expected to be quick, and hasty decisions, when caught off guard, can lead to letting the wrong people go) And, secondly, to make sure your business continues to perform well throughout the recession. A drop in headcount, either from lack of retention or staff layoffs can cause you difficulties when re-recruiting once the economy stabilises, as our staffing/candidate shortages are unlikely to dissipate.
To retain your staff we recommend reviewing what succession planning realistically looks like in your business. What you are doing to invest in your high-performing staff, if you haven't done so already ask your team how they feel, what does career progression look like to them and do they see their career advancing within your organisation? How are you boosting your staff's engagement and productivity? Consider creating new training plans, going back to basics and spending time with the people that make your business tick. Seek insight from your staff, as they have firsthand insight into what areas are pain points and could be improved as well as an understanding of what's working from both an internal and customer-facing perspective.
Looking at the data on how consumers' habits are changing will ensure your business doesn’t invest money, time or resources in the wrong areas. Plus, changes in staff (training, changing KPIs etc) will always aid in a better customer experience. Concentration on your customers is going to give you a huge advantage.
Remember to focus on your brand/business and don't solely rely on what the media is saying will happen. Look at the facts and data that appear in your business and apply the relevant advice that relates to your company.
There will always be things we can’t predict, but by focusing on genuinely selling your brand's ethos and your company values while also keeping an eye on rapidly changing economic trends your business will thrive throughout an uncertain time. Putting extra effort into your staff and business when pressure is already on can be hard, but as any business owner knows, incredibly rewarding!