The editors of Retail TouchPoints are sharing our picks for the seven most consequential stories of 2023. As usual, there were lots to choose from — that’s standard for such a dynamic industry — but these were the topics that had “legs” (and are likely to continue to be important in 2024).
1. Resale Continued its Rise but Came Under Financial Scrutiny
Consumers’ enthusiasm for secondhand goods, as well as other forms of more sustainable consumption like rental and repair services, showed no sign of slowing in 2023. Retailers heeded the call by entering resale in droves; Crocs, J.Crew, Kate Spade, The Container Store and American Eagle are just a handful of the brands that launched new resale or reuse initiatives this year.
But in the midst of this rampant sector growth, public companies operating in resale, like ThredUp and The RealReal, found themselves under increasing pressure from investors and shareholders to make not just headlines but actual profits. The sector’s money woes aren’t because consumers aren’t spending — ThredUp’s latest annual report predicts that secondhand sales will double by 2027 to reach $350 billion globally — but because online purveyors of secondhand goods face a number of unique challenges that make resale complicated and expensive, including single-SKU inventories (CarMax’s Jim Lyski described resale inventory as “snowflakes”) and complex reverse logistics needs.
While resale can give companies a nice brand image bump, if these programs don’t make sense financially it’s doubtful that they’ll last. Which is why this year (and likely next year as well), the focus for resale operators, and the retailers that employ their services, was on tightening up operations as much as expanding them. — Nicole Silberstein
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2. Media and Advertising Became More Contextual (and Measurable)
Marketing teams are feeling more pressure to perform. Although they have no shortage of channels and tactics to use, they need to ensure they’re prioritizing the right methods for their ever-evolving consumers. Some brands, like Anthropologie, have masterfully blended traditional tactics (like catalogs) and new digital channels to reach new and loyal customers alike. Other brands are exploring how to embrace more contextual advertising vehicles — such as retail media, CTV or even shoppable TV — that allow them to reach consumers in a more contextual way.
But these new media and advertising channels don’t just help create seamless and personalized brand experiences, from the sofa to the store. They also offer more robust measurement and attribution for teams that need to prove the impact of their investments. In 2023, we even saw social players, from Meta to TikTok, strive to offer the same depth of reporting and insights to empower brand partners. — Alicia Esposito
3. Accessibility Moved into the Mainstream
The fight for inclusion by people with disabilities saw some key victories in 2023, as retailers and brands began to recognize the buying power of this sector: Market Reports World has forecast an annual CAGR of 5.74% for adaptive apparel from now through 2030. Kohl’s and Nine West launched an adaptive apparel line, and QVC leveraged some star power by launching an accessible fashion line in partnership with Selma Blair and Isaac Mizrahi.
However, accessibility and inclusion aren’t just about the products retailers sell, but also the experiences they provide. Walmart set an example for the industry by initiating “sensory-friendly” hours on Saturday mornings (including tuning display TVs to static images, turning off the radio and lowering the lights where possible) during the back-to-school season. The retailer got such a positive response that it expanded the program to all its U.S. stores in November. — Adam Blair
4. Bed Bath & Beyond Said Goodbye & Hello
The one-time “category killer,” Bed Bath & Beyond (BB&B), founded in 1971, breathed its last in 2023 — sort of. BB&B had been in decline over the past few years, fueled in part by an ill-fated foray into private label that began in March 2021 along with store closures and layoffs following disappointing financial results in August 2022. Ad exec Ellis Verdi identified several structural weaknesses in BB&B’s operating model that, along with changes in consumer shopping patterns, finally caught up with the retailer.
But even though its brick-and-mortar stores have closed, the BB&B name lives on: Overstock.com, which purchased the retailer’s IP, renamed its website Bed Bath & Beyond in early August, part of CEO Jonathan Johnson’s plan to marry the retailer’s name and reputation with Overstock’s “asset-light” operating model. In an ironic twist, Johnson himself had to say “goodbye” to the new Bed Bath & Beyond in November. — Adam Blair
5. Marketplace Competition Drove Ecommerce Innovations
The last few years have seen a veritable explosion of online marketplaces, and a number of these are becoming sophisticated enough to threaten Amazon’s dominance in the U.S. In 2023, that’s exactly what they did.
Among the biggest challengers were Chinese-based discount shopping apps Shein and Temu. The latter had always been based on a marketplace model, and Shein added a marketplace in May to expand its reach beyond fast fashion. Both companies regularly made headlines this year not just for their meteoric rises but also for their numerous legal challenges (including against each other) and questionable business practices. But negative press didn’t stop either app from drawing U.S. consumers in droves, thus striking fear in the hearts of established players, both digital (read: Amazon) and physical (with consumers shifting some spending away from discount and dollar stores in light of this new alternative).
The form and function of marketplaces continues to expand rapidly, and many other companies used them in innovative ways this year: Macy’s to broaden its consumer appeal; NBCUniversal to enable its shoppable TV ambitions; Hearst to evolve beyond affiliate marketing; and Party City to expand into services. We expect marketplaces will continue to drive innovative new ecommerce experiences, and intensifying competition among retailers, in 2024. — Nicole Silberstein
6. All Things Gen AI
The surging popularity of ChatGPT made generative AI a mainstream topic of discussion — and debate. While many industry practitioners, especially store design teams, have eagerly turned to tools like ChatGPT and DALL-E to facilitate research and ideation, others have warned that these platforms are brimming with copyright and privacy issues.
These conversations will undoubtedly continue, especially as politicians and pundits weigh the future of AI legislation. However, that certainly will not stop retailers from testing generative AI to drive business productivity and revenue. Some retailers, such as PUMA and 1-800-FLOWERS, have eagerly tested gen AI capabilities to create more personalized customer experiences at scale. — Alicia Esposito
7. Crime Stats Got a Second Look
Crime, including shrink and more violent offenses, is a serious and perennial problem for retailers, but exactly how big the problem is became less certain this year. In early December, the National Retail Federation (NRF) had to retract a statement about the impact of organized retail crime (ORC), saying that a report issued earlier in 2023 had mistakenly reported that “nearly half” of 2021’s $94.5 billion in retail shrink was due to ORC.
The perception that retail was suffering from a rampant crime wave was bolstered by statements from executives at Dick’s Sporting Goods, Target and Lowe’s, all blaming shrink as one of the factors negatively affecting not just their financial results but the safety of employees and customers.
Were these retailers just looking for a convenient scapegoat? Count on more conflicting data next year, particularly if this often politically charged issue becomes a factor in the Presidential contest. — Adam Blair
