The US retail industry faces growth difficulties! This article will show you five major trends in the future

According to the "Retail Forecast 2023" report released by Forrester, total retail sales in the United States will reach 4.7 trillion U.S. dollars in 2023, a much slower growth rate than during the outbreak. Forrester also pointed out that in 2023, online sales in the United States will exceed 1.1 trillion U.S. dollars.

Forrester predicts that the following five trends will emerge in the development of the US retail industry:

Online-only brands without a physical strategy will go out of business. As consumers return to pre-pandemic purchasing behaviors, year-over-year growth in U.S. online retail penetration will stabilize at around 1.5% in 2023 (down from 3.5% in 2020), meaning offline sales will account for 76% of total U.S. retail sales.

Forrester notes that pure online retailers need to adopt one of three strategies: opening physical stores (like Casper and Warby Parker), developing store-in-stores (like Macy's/Toys "R" Us) or wholesale partnerships (like Allbirds with Nordstrom and Zalando).

Retailers have two supply chain paths: self-sufficiency or outsourcing. Companies like American Eagle Outfitters and Gap Inc. now work with each other to manufacture, transport or store together, sharing capacity with other brands. Of course, some retailers choose to outsource directly, that is, to transfer resources, talent and capital to more customer-facing functions, including marketing, commerce, technology and CX.

Automation will save the retail industry from labor shortages. The ripple effect of mass layoffs will force retailers and brands to make more and more strategic investments in automation. Investments will make companies smarter and more efficient in areas such as marketing, human resources, and analytics.

Paid membership has reached a turning point. Many retailers will learn from Amazon Prime, Costco, and Walmart+ and use marketing funds for paid membership programs to provide user loyalty and increase revenue sources. As the ranks of "paid members" continue to grow and consumers become more savvy, if retailers cannot provide valuable membership programs, they will face a decline in return on investment.

Retail media advertising drives business growth. Forrester predicts that by 2024, the US retail media advertising market will grow to $62 billion, more than double the $29 billion in 2021. Amazon will account for 69% of the market share. Active advertising will help retail media reach more customers.

In the report, Forrester pointed out that retailers must actively adjust their business models, marketing, stores and operational strategies to meet the changing needs of consumers, which will help them gain growth in the harsh environment of inflation and economic recession.

Editor ✎ Nicole/

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