Future Mind conducted the first Retail Barometer survey in 2023 by getting in touch with 65 decision makers associated with the retail sector to predict the direction of the industry for the coming months.
Only about 15% of retailers in Poland rate the situation of the industry as very good in 2023. Nearly half of them believe that the mobile app will be the fastest-growing sales channel this year.
Future Mind conducted the first Retail Barometer survey in 2023 by getting in touch with 65 decision makers associated with the retail sector to predict the direction of the industry for the coming months and help us understand where retail is headed.
In 2022, we could observe a deceleration in the e-commerce industry. The dampening trend is attributed to the post-pandemic mood that followed the unprecedented boom of e-commerce in 2020 and 2021.
As the competition intensifies, the most technologically advanced retailers are gaining the upper hand thanks to the use of tools such as cutting-edge mobile applications, hyper-personalization, optimized advertising spending, or the use of their own communication channels.
Looking ahead to 2023, experts forecast that we are in for a difficult time due to the battle against inflation and difficulties in accessing raw materials. Supply chain disruptions and shortages of key inputs could lead to delays in production and delivery of products, which can impact the overall customer experience.
However, there is a silver lining: customers’ love for mobile apps. Market research has found that 78% of consumers prefer to shop via an app rather than on mobile sites. App users also exhibit much greater loyalty: as many as 67% of customers do not remove the apps of their favorite brands from their phones.
The popularity of mobile apps as a preferred sales channel is attributed to two key factors: the ease of use and the speed and convenience of payment. This translates into twice the value of orders, 4.6 times the conversion rate, and three times the time spent browsing products compared to traditional stores. In fact, some of our clients have achieved close to 70% share of sales from their apps across all their digital channels, underscoring the significant impact that choosing a mobile app as a sales channel can have on a retailer's bottom line.
As we look ahead to 2023, pricing strategies will likely play a decisive role in consumer decisions, according to surveyed experts . Retailers will need to carefully consider their pricing approach in order to remain competitive and drive business success, especially during a period of crisis. In addition, factors such as online product availability and the availability of a mobile application will also be key considerations for consumers.
It is worth noting that the conversion rate will also remain a critical metric for retailers in the coming year, with nearly half of those surveyed believing it will play a key role in their business success. Additionally, long-term customer value and abandoned shopping carts will continue to be significant factors that retailers must address in order to optimize their performance. By keeping these factors in mind and adapting their strategies accordingly, retailers can position themselves for success.
Motivating customers to buy online is another challenge that retailers will need to face. The introduction of a mobile application as a sales channel could definitely affect the success of a brand, but an equally important factor is to convince potential customers to use this form of shopping. Experts believe that customers are attracted by the possibility of discounts for regular customers, so introducing systems like loyalty programs or cards could be the answer.
Some other factors that influence consumer motivation is a wide choice of delivery methods and order pickup, a wider range of products available when compared to traditional stores, or extensive product information.
We believe that personalization will also play a major role – a customer with a choice between two brands offering a similar assortment will choose the brand that matches the offer to their particular needs better than the competitor. Personalized promotions and prices are also important factors in motivating customers to shop online. Additionally, proper implementation of personalization can help brands succeed and affect their ROI.
Industry experts believe in the most important trend of the recent months, artificial intelligence, to likely become a game-changer for retail. Retailers who want to gain an even greater edge over the competition should consider taking advantage of the AI tools available on the market, such as ones utilizing machine learning algorithms to optimize their processes.
In an ideal world, a brand will only reach its full maturity when all customers receive a different recommendation based on the offer they spent the most time browsing, their purchase and return history, and data from paid ad campaigns. However, the vast majority of companies still fall short of providing truly personalized recommendations based on individual browsing and purchasing behaviors.
So, what’s the main takeoff from Future Mind’s first Barometr Retail survey? Industry experts recommend investing in mobile apps and personalization, as well as closely monitoring conversion rates and pricing strategies. They also suggest embracing AI-based tools to better understand consumer behavior and deliver more effective marketing messages. By following these recommendations, brands can enhance their customer engagement and maximize their bottom line in the ever-changing retail landscape.
We’ll keep you posted on the sentiment amongst industry leaders in the CEE area as we keep exploring the retail environment together thorough 2023 in our upcoming surveys.