Top Retail Themes in 2023 – Thematic Intelligence

Top Retail Themes Thematic Intelligence Report Overview

GlobalData has developed a unique thematic research ecosystem designed to take a holistic view of the big themes that impact companies in the retail industry. The ‘Top Retail Themes in 2023’ thematic intelligence report breaks down the top themes expected to impact the retail sector in 2023. For each theme, it offers a definition of the theme, highlights trends and opportunities, and then gives key considerations for brands and manufacturers.

Retail Theme Map 

Some of the biggest themes that are impacting the retail sector are inflation, market polarization, mergers & acquisitions, ESG, and omnichannel: the post-omnichannel era. The graphic below depicts the 2023 theme map for the retail sector. It highlights the big themes that are driving share prices for retailers and is the result of a series of interviews with senior industry executives and investors, reflecting an up-to-date view of the issues that keep them awake at night.

Market Polarization: Inflation is set to remain above average levels in 2023. Hence, consumers’ discretionary incomes will be squeezed in 2023 and beyond. This means that consumers, and therefore the retail market, will become increasingly polarized. In the apparel sector, the polarization trend is in tandem with increasing consumer awareness of the environmental and ethical implications of purchasing lower quality, higher volume clothing & footwear. As a result, many shoppers are seeking products that offer better value for money, are more versatile, and last longer, so are trading up to premium and luxury players.

Mergers & Acquisitions: With non-essential retail spending set to remain under pressure over the next few years as global inflation continues to be high, mergers & acquisitions (M&As) offer the opportunity for growth for those companies with healthy balance sheets. Retailers can utilize M&As to target rising strategic themes, particularly those in which they would struggle to become experts themselves. For example, in November 2022, Marks & Spencer acquired the intellectual property of fashion marketplace, Thread, which is a specialist in personalization, with the intention of using its technology to improve M&S’ digital shopping experience.

ESG: Consumers’ concerns about the environmental, social, and governance impacts of their retail purchases are rising and hence retailers must take action to retain appeal. Despite physical resale operators like charities, vintage, and thrift shops having been around for many years, the resale apparel market is now skyrocketing due to rising eco-consciousness. The increased dominance of online resale platforms, like Depop and Vinted, and the launch of resale propositions by retailers such as PrettyLittleThing and IKEA, have also supported this growth, especially since the pandemic, when people were forced to find alternative ways to shop amid store closures.z

Retail Sector Theme Map 2023

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Retail Sector: Thematic Research Methodology

Companies that invest in the right themes become success stories. Those that miss the important themes in their industry end up as failures.

• Viewing the world’s data by themes: GlobalData’s thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors.
• Traditional research: Companies are impacted by multiple themes that frequently conflict with one another. The difficulty in picking tomorrow’s winners and losers in any industry arises from the sheer number of technology cycles – and other themes – that are in full swing right now.
• Thematic engine: This identifies which companies are best placed to succeed in a future filled with multiple disruptive threats.

Top Retail Themes Report Overview

Scope

GlobalData breaks down the top themes expected to impact the retail sector in 2023.

Key Highlights

While we expect inflation to fall in 2023, it is not forecast to fall to below pre-pandemic 2019 levels even in 2025. The cumulative impact of inflation means that it will take significant time for retail to recover, as it needs real earnings to make up the lost ground.

With inflation set to remain above average levels, consumers’ discretionary incomes will be squeezed in 2023 and beyond. This means that consumers, and therefore the retail market, will become increasingly polarized. The gap between those with higher savings and discretionary incomes, versus those dipping into and then running out of their savings, and racking up debts, will widen significantly.

Consumers’ concerns about the environmental, social and governance impacts of their retail purchases are rising, meaning it is crucial for retailers to take action to retain appeal. As well as implementing obvious strategies like the incorporation of recycled or sustainable materials into products, players are beginning to offer more innovative initiatives too, such as furniture and clothing rental and the launch of their own resale platforms.

With non-essential retail spend set to remain under pressure over the next few years as global inflation continues to be high, mergers & acquisitions offer the opportunity for growth for those companies with healthy balance sheets. The benefits can be a quick route to diversification, enhancing technology prowess and acquiring customers, which in turn should boost sales.

Reasons to Buy

• “Themes are disruptive, so it’s easy to be blindsided by industry outsiders who invade your sector. Understanding the themes ecosystem will get you ahead of the curve.”
• Understand the themes emerging in 2023, allowing you to grasp a wider view of changes in consumer behavior and how they will impact your markets.
• Explore how emerging themes in apparel are allowing industry leaders to evolve, so you can better position yourself for long-term success.
• An easy-to-use framework for tracking themes across all companies in all sectors
• Companies who invest in the right themes become success stories; those who miss the big themes end up as failures.