What happened in the US retail market in Q1? These three trends are worth paying attention to

It is learned that on April 5, Insider Intelligence released a first-quarter market inventory of the US retail industry. Three major trends, including the emergence of ChatGPT, the ups and downs of consumer confidence, and new moves in the field of social e-commerce, are continuing to influence the direction of the US retail market.

1. ChatGPT is being applied to the retail sector

It is reported that after ChatGPT came out, many fields including the retail industry rushed to adopt it, which also affected the way Americans work, live and even search and shop.

In addition to the two major search engines Microsoft and Google competing to introduce generative artificial intelligence, retail companies such as Instacart, Shopify, Klarna and streetwear company Snipes have also begun to explore and experiment with the application of ChatGPT in the retail industry. In the field of e-commerce, ChatGPT is being applied to multiple scenarios such as writing product descriptions, inventory management, and live streaming.

Insider Intelligence believes that the top three most promising application areas for generative AI are mobile e-commerce, social e-commerce, and voice e-commerce. As adoption rates increase and technology matures, generative AI may be applied to marketing copywriting, product design, customer service, and more.

2. Social platforms continue to promote social e-commerce strategies

Social platforms such as TikTok, Pinterest and Instagram are continuing to make efforts in the field of social e-commerce. It is predicted that social e-commerce sales in the United States will reach 68.92 billion US dollars this year and will continue to grow at a double-digit rate by 2026.

Despite political pressure in the United States, TikTok is moving full speed ahead on social commerce. The platform launched in-app checkout in the United States in February and has been quietly testing an affiliate program for American creators to promote adoption of its TikTokShop.

Another platform that has gone all-in on social commerce is Pinterest. In February, CEO Bill Ready said the platform plans to embed shopping into every aspect of the platform's core experience.

Instagram is scaling back its social e-commerce business on the platform and focusing on driving advertising revenue. But Instagram has only shut down the live shopping feature, not the shopping promotion feature on the platform.

If TikTok is banned, expect a surge in app activity to take on its large social buyer base. If it is not banned, it is expected to tie with Facebook for the highest social buyer penetration by the end of 2023.

3. Retail sales and consumer confidence fluctuate

U.S. retail sales slowed in February after a strong start in January, according to the Commerce Department. The personal consumption expenditures price index, a key inflation measure for the Federal Reserve, rose 6% in February from a year earlier amid sharp increases in food and housing prices.

Consumer sentiment has also been volatile, falling in March for the first time in four months, according to the University of Michigan. While the banking turmoil has had a limited impact on consumer sentiment, the university said its data showed multiple signs of overall pessimism among consumers.

While a recession may or may not be on the horizon, one thing is for sure: This will be a year of slowing retail sales. Total U.S. retail sales are expected to grow by just 3.3% in 2023, compared to 8.1% last year. This year will be particularly tough for brands like Best Buy or Macy's that rely on discretionary spending by consumers.

Discount and value-focused retailers, such as Walmart and Dollar General, will continue to benefit as consumers trade down in the grocery category, while luxury retailers, such as LVMH Moet Hennessy Louis Vuitton and Capri Holdings, will be favored as China recovers from the coronavirus lockdown.

Editor✎ Ashley/

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