Fourth investigates the retail industry’s priorities for 2023
Retailers across the US have spent the past few years navigating a turbulent retail landscape, including store closures, supply chain issues, and talent shortages. This year, the challenges are evolving, and retail now faces a global recession, soaring inflation, and the spiraling cost of living.
Despite these challenges, retailers remain resilient, and there is renewed optimism for recovery and growth. Although spending remained strong by the end of 2022, retailers should plan effectively and procure technology that meets their needs and unique business challenges, to navigate this unpredictable landscape successfully.
In our latest research, Fourth surveyed 250 retail leaders and 250 retail employees in the US to explore the state of the retail industry.
We delved into four focus areas:
Retailers across the US have spent the past few years navigating a rapidly changing landscape — from store closures and supply chain disruption to talent shortages. Entering 2023, these challenges have evolved further, with retailers facing a global recession, soaring inflation, and a spiraling cost-of-living crisis.
Despite these pressures, retailers remain resilient. US retail sales experienced their biggest increase in eight months toward the end of 2022, signaling continued consumer demand and a strong finish to the year.
However, recovery is not guaranteed. Retailers must plan carefully and adopt flexible strategies, supported by technology that aligns with their unique business challenges, to navigate the year ahead successfully.
This white paper is based on insights from two surveys conducted in November 2022 in collaboration with Censuswide.
The first survey included 250 HR, finance, operations, IT, and digital transformation decision makers in US companies with 100–2,500 employees across retail, health and wellness, entertainment and attractions, automotive services, and beauty and salon services.
The second survey captured the views of 250 US retail employees working in the same sectors.
Retail’s recovery remained strong through the final months of 2022, with 59% of retail leaders reporting profits in line with pre-pandemic revenue. Over a quarter of leaders reported making more profit than before the pandemic, particularly in entertainment, sports and attractions, and health and wellness.
Not all sectors experienced the same growth. Beauty and salon services saw slower recovery, with 12% making less revenue than pre-pandemic levels. Rising prices and reduced consumer spending continue to present challenges, but the overall outlook for 2023 remains optimistic.
Consumer purchasing behavior has been more resilient than headlines suggest. At the end of 2022, 38% of retailers saw an increase in in-store purchases, particularly in grocery and convenience stores.
Online spending remained strong, with four in five retail leaders reporting increased online purchases in Q4. Nearly half also reported an increase in average spend per visit or digital transaction.
“From the supply chain to talent shortages, the business challenges are clear for 2023. Retailers that listen to both employees and customers — and leverage technology — will be the most likely to succeed.”
Clinton Anderson, CEO, Fourth
Retail employs approximately 32 million Americans, making it the largest private-sector employer in the US. However, the industry continues to face high employee churn.
More than 87% of retail leaders are worried about talent shortages in 2023, with concern especially high in beauty and salon services. Employees share these concerns, with 94% worried about how labor shortages will impact their roles and wellbeing.
Rising food, energy, and commuting costs are placing significant financial strain on retail employees, while wages struggle to keep pace. Supporting staff through this crisis is critical to maintaining motivation, engagement, and retention.
More than half of retail leaders plan to increase salaries in 2023, while many are also offering financial education and earned wage access. Over four in five employees believe earned wage access would reduce financial stress.
Technology investment is becoming increasingly critical amid economic uncertainty. HR technology and workforce management solutions rank among the top priorities for both retail leaders and employees.
While 2023 presents uncertainty due to economic volatility, it also presents opportunity. Retailers remain resilient and focused on meeting consumer needs while supporting the employees at the heart of their businesses.
Key priorities include addressing talent shortages, helping employees manage financial stress, and investing in technology that boosts efficiency, communication, and engagement.
By leveraging workforce management technology, demand forecasting, and earned wage access, retailers can remain agile, improve the shopping experience, and build long-term resilience.
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