From the rise of the Metaverse to non-premiumisation of sustainable products, the new year will see a mix of old and new concepts gaining ground
Mumbai: The year 2022 was one of recovery and expansion, with many brands logging record sales during the festive season and several brands stepping up their expansion plans. 2022 also saw people returning to their workplaces, once again increasing the demand for related products such as officewear. [bs_input_restrict]
With a steady increase in purchasing power and a revival of offline shopping, it could be termed a good year for retail. Not only physical stores recorded a growth in sales but businesses on social media and e-commerce also logged good business.
There is optimism about the year ahead with retailers and brands alike prepping for a productive and profitable year, despite the lingering clouds of the pandemic. Chat with retail business leaders revealed that the trends that are expected to dominate 2023 are a mixed bag–with some new trends like Metaverse catching up and some old ones like private labels and D2C gaining ground in a modified avatar.
1. More and more retailers on the Metaverse
While there haven’t been many metaverse retailers active in India at present, it is expected that the brands will take it as an opportunity to shape a bright future. According to a report by Netscribes, the metaverse market is expected to hit over $800 billion in 2024 and it is predicted that by 2026, consumers will spend one hour more on the metaverse each day.
Abhishek Bajpai, CEO, Apparel Group India said, “Retailers are gravitating towards Metaverse, taking this opportunity as a chance to empower the gen-Z, tech-savvy, and millennial consumer. They are using technology to create immersive shopping experiences with a focus on in-person interactions and enhancing the relationship between the brand and its consumers.”
Virtual shopping, virtual navigation, virtual fitting rooms, and in-store displays are some innovative ways for retailers to reap the most out of this next-gen technology, he added.
2. Domination, consolidation and expansion of D2C brands
It is expected that by 2023, there will be a gradual rise in the number of D2C companies and existing brands will expand their market presence. If the growth continues, the Indian D2C market is expected to hit the $100 billion mark by 2025.
“It is projected that D2C sales will surpass traditional retail sales in terms of value and volume. 2023 will be crucial for firms to strengthen their consumer-centric retail strategies in order to thrive in the digitally-driven retail environment as customers adjust to these technology interventions,” said Anil Shetty Founder of MetaMan said, speaking about the expected growth of D2C.
There is yet another trend within D2C that will gain prominence in this year. “After the prolific number of new D2C brand launches in 2022, the year 2023 will be all about consolidation,” said Abhinav Mathur, CEO of Something’s Brewing.
“The cost of acquiring customers has become unsustainable through digital channels and hence brands are seeking alternate avenues,” he added.
The year will also witness many D2C brands launch their own physical brand shops to build consumer connect and familiarity.
3. Emergence of vertical marketplaces
This year is also expected to be one when vertical marketplaces emerge, taking space away from pureplay D2C brands. “With too much choice and low differentiation amongst D2C brands, consumers will seek the expertise of specialized curated marketplaces, where consumers get the benefit of both varieties alongside access to smaller niche communities sharing common interests,” said Mathur.
Speaking about the change Sanjana Desai, executive director of Mother’s Recipe said, “D2C brands tend to achieve an expansion in the market opportunities quicker and gain a higher margin than B2C. This year we expect the entire D2C ecosystem to undergo a tough maturity phase.”
4. More preference for private labels
A recent report said consumers are becoming price-conscious and are holding back on non-essential purchases. A fallout of this is the preference for private-label brands. Read more about it here. According to a survey by Netscribes, 45% consumers switched to private labels due to their affordable prices while 58% found the quality of private-label products better than national brands. Experts expect the preference for private-label brands to grow significantly in 2023.
5. Rise of experiential retail
According to insights by Adobe, 32% consumers prefer in-store experience over online and 74% said that they are likely to buy the products after having a good in-store experience. Experiential retail is on the rise, thanks to consumers’ shift towards it. As a result, a physical store is now a place to engage customers with innovative ideas and experiences such as offering samples, exclusive in-store deals, product demos and consultation. Technology-enabled experiences too will gain ground.
6. Growth of hybrid retail
“We are positive that omnichannel retailing, which allows customers to shop at their convenience is the way to go. This hybrid structure will advance with new technology and change the way that retail is done because of the added advantages of both the offline and internet channels,” said Abhishek Bajpai, chief executive officer, Apparel Group India.
7. Non-premiumisation of sustainable products and packing
While more and more brands are opting for sustainable and recyclable materials for their products, there has been a positive impact of the same on consumers. Various surveys claim that sustainability will no longer be a luxury but will be mandatory in 2023. As per a report by Insider Intelligence, 24% of shoppers wanted products that were free from any synthetic ingredients, 19% wanted brands to donate the dead inventory while the rest 19% desired economical shipping packaging. Despite the increasing inclination towards all things sustainable, consumers may not be willing to pay a premium for the same. As per a Capgemini Research Insitute consumer trends report, only 41% of consumers globally said that they were willing to pay more for a product they believe to be sustainable.[/bs_input_restrict]
