Top digital trends in retail for 2023

Our annual research report "2023 Digital Trends — Retail in Focus" is here. Adobe has once again partnered with Econsultancy to survey marketers across industries to identify trends in customer experience with this year’s sample including nearly 400 retail executives.

In 2022, retailers faced a number of new challenges — including supply chain problems, tight labor markets, inflation, and more. Leading retailers have adapted by using new tools and personalization strategies to meet customers where they are in their purchasing journey.

Read on to learn how industry leaders are aligning their people, processes, and technology to meet rising customer expectations across all channels.

Retail moves to hyper-personalization

To retain your existing customer relationships and forge new ones, you’ll need to deliver impactful shopping experiences that feel hyper-personal. But beyond that, these experiences need to dazzle each shopper, all at scale, and all while respecting customer data privacy and streamlining your operations. It may seem like a lot of work, but when you do it right, you'll deliver retail experiences that wow your customers and increase revenue for your business.

• Customers expect personalization wherever they are. No matter which demographic you’re targeting, customers are shopping across websites, in store, and on mobile and social apps — and expect to be met with one-to-one personalization. Forrester research found that 73% of customers want to be delighted by companies, but just 18% say that companies have met that standard.
• Retailers are innovating how they use physical spaces. Personalization is happening with both digital and in-store customers. Physical stores offer customers a chance to connect with brands on a deeper level with hands-on, fully immersive shopping experiences and events.
• Mobile bridges digital and physical. Mobile experiences are key to delivering the best hybrid shopping experience possible. Recent consumer research found that 54% of shoppers use their phones to compare costs in store. And merchants that integrate mobile and digital features into physical store experiences leave consumers more satisfied.

Case study — Gymshark

Where retailers once wondered how to translate the personal in-store experience online, now companies like Gymshark are bringing that bespoke experience based on insight and customer behavior back in store again. The British fitness apparel brand launched as an online-only, direct-to-consumer business. And in October 2022, Gymshark opened its first physical store on London’s Regent Street.

The goal was not only to sell gym clothes in its physical stores. The outlet also features “The Sweat Room” — a fitness studio with a regular program of events and classes, plus community sessions. Gymshark aims to bring personalized experiences full circle.

Unleashing creativity with automation and streamlined processes

Automation gives time back to employees

It’s essential that employees have enough time to be creative. Unfortunately, 37% of retail leaders and 57% of mainstream retailers are still reporting that a lack of time to be creative is a barrier in their organization. Creative doesn’t necessarily mean dressing the shop floor or developing an ad. Creativity applies to other aspects of retail as well, including developing new strategies and thinking innovatively about customer data and what new trends to examine next.

This lack of time is the perfect problem for automation to solve. Automation frees up time for employees to focus on higher value, more creative work. When you remove the need to complete basic, repetitive tasks, your employees can focus on other ways to improve the business and enhance your customers’ experiences. And keeping your customers happy is what will drive loyalty to your brand — and ultimately more revenue.

Choose the right technology to empower employees

Adopting new technology to improve the customer experience is a crucial step for modern retailers. Choosing the right tool can be the difference between frustrating your team and empowering your employees.

If your tools don’t work together seamlessly, your employees risk being held back by data silos, slow processes, or lack of integration with other solutions. In fact, 50% of respondents cited integration between tech systems as a key internal barrier holding them back. A complex hybrid retail environment demands a broad portfolio of tools, but without a unifying or integrated platform the tech intended to solve problems can get in the way instead.

Despite the clear benefits of using a single unified platform, 45% of retailers are still juggling multiple technologies and vendors for their customer experience management with no unifying platform. If you’re finding yourself constantly switching back and forth between platforms — or struggling with siloed data — you could probably benefit from a better data management system.

That’s where a customer data platform (CDP) comes in. A CDP helps unify all of your data from across systems and creates customer profiles ready to activate on in milliseconds — using machine learning, AI-powered propensity scoring, and contextual insights.

Case study — The Home Depot

The Home Depot used AI to build audience segments from its 170 million profiles to send the right experience to the right customer in real time. As a result, the company increased its personalized campaigns by 62% year-over-year.

The Home Depot’s use of integrated technology to drive its marketing campaigns hasn’t been entirely focused on sales performance. The new technology has impacted staff internally too. “We give our associates opportunities to grow their skillsets, learn, and make mistakes in a safe way. It allows people to improve and transform themselves,” said Melanie Babcock, vice president of integrated media at The Home Depot.

Expand the customer universe with data

When your tools and data work together to seamlessly serve the right content at the right time, your systems will foster creativity that will elevate your customer experiences above the competition. However, the data that retailers have to work with is shifting. With third-party cookies on their way out, first- and second-party data will play an essential role for businesses looking to understand their consumers’ buying signals and meet them where they are in the purchase process.

Embracing new data approaches to drive personalization at scale

Retailers are turning to new data practices to learn more about their customers and to improve the results of their personalization efforts. Here are a few ways that businesses are elevating their data processes to discover more valuable insights about their customers:

• Data clean rooms. A data clean room provides aggregated and anonymized user information to protect user privacy while still providing advertisers with non-personally identifiable information to target a specific demographic.
• Data partnerships. These partnerships are when two organizations share data with each other — giving them safe and secure access to more information about their potential or existing customers.
• Retail media networks (RMN). RMNs are a type of advertising infrastructure composed of multiple digital channels — websites, mobile apps, and more — that allow third-party brands to advertise across other retailers’ channels.

Elevate your content and personalization efforts

The need for dynamic, personalized content across an exploding number of channels is making marketing and CX teams’ jobs more difficult. Despite more and more retailers prioritizing personalization, only 16% of retailers can personalize experiences based on customer interaction history. And only 9% can provide personalized experiences based on intent.

Consumers expect to see high-quality content and context related to your products — tailored specifically to their past purchases, browsing behavior, and preferred channel or device. Not surprisingly, 67% of retailers are working on extending their customer experience efforts to new channels — including shoppable TV, livestreaming, and social commerce — to meet their customers wherever they are.

As you move toward a truly unified commerce experience, each touchpoint becomes an opportunity to give shoppers the personalized experience they desire while also collecting further data about preferences and behavior.

Kickstart your retail personalization journey

Better customer experiences are built on personalization at scale. To stand out in today’s dynamic shopping era, you’ll need to deliver tailored, relevant, and consistent experiences to each shopper and at every touchpoint.

• Data and insights. Prove you understand and respect your customers by unifying your data from any relevant sources and discovering insights from real-time interactions — all while complying with data privacy and security regulations.
• Content and collaboration. Launch campaigns faster and tailor content to specific audiences, channels, and touchpoints by simplifying the way your teams plan, produce, and deliver content across the organization.
• Journeys. Meet your customers wherever they are by orchestrating smooth, consistent journeys across all channels and boosting customer satisfaction, retention, and brand affinity.
• Commerce. Use high-intent shopper data to deliver differentiated, personalized shopping experiences at scale to increase conversions, revenue, and operational efficiencies.

If you want to continue to grow the reach of your retail business in 2023 and beyond, you need to provide personalized experiences for every customer, automate and streamline your processes, and maximize your data capabilities.

Now that we’ve taken a look at some of the high level trends in retail, you can take a more in-depth look at our findings in 2023 Digital Trends — Retail in Focus. Think of this as a chance to stop for a moment, take stock of your business, get creative, and chart the course for long-term growth in the digital economy.

Read the full report here.

Learn more about Adobe for Retail and how we help businesses deliver hyper-personalized experiences to drive revenue and customer loyalty.

Bruce Richards is senior industry marketing manager – retail & consumer goods for Adobe. He specializes in customer experience, digital strategy, and marketing. Bruce joined Adobe in 2018 with over 25 years of professional experience as an executive leader within the retail and consumer goods industries. He has a wealth of experience in customer advisory roles — having held client services roles in several consulting and marketing services organizations. Bruce has worked with some of the world’s largest retailers and brands including Macy’s, Estée Lauder, Bloomingdale’s, CVS Pharmacy, Hanes, Kohl’s, and El Corte Inglés.