Consumer Goods

2023 retail and consumer goods industry predictions

The retail and consumer goods industries continue to evolve at a rapid rate.  Overall, 2022 retail holiday spending grew 7. 6%, according to Mastercard SpendingPulse.  In-store shopping was back and grew at a higher rate than digital shopping. And consumers showed real enthusiasm for a month of Black Friday deals across both digital and in-store promotions. 

Unfortunately, not all retailers and consumer goods companies are sharing in the good news. For many inventory surplus may depress traditional holiday margins. The bull whip is in full effect, and warehouses are full of late inventory. 

Given these mixed conditions, here are my predictions for the retail and consumer goods industry in 2023.

Supply chains will gain agility and resiliency  

Inflationary pressures are driving consumers to search for value and discounts. The biggest difference between this industry’s winners and losers – as demonstrated during the 2022 holiday season — is supply chain management.  Organizations that have used data and insight to create resiliency and agility will do better than average in the battle for consumer spending.

In the coming year, look for consumer goods and retail organizations to redefine their approach to supply chain operations.  Developing a more cohesive ecosystem model based on the integration of critical decision-making data is high on the priority list. The ability to see and react to challenges through data-driven insights can help supply chain organizations move from their current state to a more resilient and agile future. Creating more insight into data reveals automation opportunities to improve operations and response. As labor and supply challenges continue to impact operations, companies will look to increase automation to improve performance and customer experience.  A renewed focus on resiliency driven by inflation and a need for increased efficiency may improve margins in 2023.

Focus on ESG continues

Retailers and consumer goods companies will continue to operationalize sustainability to reduce waste and retain customers.  Supply chain environmental, social and governance (ESG) reporting has become an investor, consumer and competitive issue.  Consumer pressure combined with new government green targets and peer pressure from competitors introducing sustainable products are forcing many supply chain leaders to embrace greener ways of working.  These improvements can also drive cost savings as sustainable operations cut down on waste and packaging while also reducing the overall environment impact from operations.

Corporate social responsibility is a growing priority and developing sustainable and ethical supply-chain practices will continue to grow in importance to all market participants.  Most large retail and consumer goods companies are focused on making a positive impact on the environment, preserving natural resources, limiting carbon emissions and global warming, and creating more sustainable processes. In all of these cases digital integration with partners and customers is an essential component of creating sustainable, ethical products with reduced environmental impacts. We expect this trend to continue in 2023.

A renewed focus on omnichannel

After several tough years for brick-and-mortar stores, in-person shopping was back for the 2022 holiday season. Data from the National Retail Federation suggests that consumers are excited by the opportunity to return to in person shopping; in September 45% of shoppers said they planned to browse or buy in person over Black Friday weekend.  This swings the focus from digital back to omni-channel, encompassing both the digital and physical worlds, and the expectation is that true omni-channel organizations will do better than digital-only channels. 

Retail and consumer goods organizations must continue to invest in creating a single view of the customer across their physical and digital presences as well as marketplaces to gain a better understanding of both demand and the customer. Options to pick up in store, ship from store, ship from distribution center and manufacturer direct-to-consumer are all in play as delivery optimization and last-mile fulfillment continue to best serve the customer.  Direct-to-consumer and omni-channel retail will continue to compete for the hearts and minds of customers by building engaging brand journeys, in-store and digital experiences and improved fulfillment. With a goal of increasing revenue through all channels, retailers and consumer goods firms are focusing on how to better guide consumers through a personalized muti-channel journey.

At OpenText, we will spend 2023 continuing to focus on meeting the supply chain, sustainability, and customer engagement requirements of our customers. 

Learn more about how OpenText solutions for consumer goods and retail industries can help you overcome your challenges.

Scott Lundstrom

Scott is a long-time industry analyst, CIO, and software developer supporting complex regulated businesses in healthcare, life sciences and consumer goods. At AMR, Scott contributed to the original SCOR model, and helped launch the Top 25 Supply-Chain program. Scott founded the health industry practice at IDC Research and lead this group for 13 years. Scott also held leadership roles in research focused on AI, Cloud, SaaS, enterprise applications and analytics.

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