In a downloadable report, MasterCard Services has made their predictions about 2023 and what it could mean for retail. Sections of the 29-page report detail the Economic Outlook, Understanding Consumers, Reaching Consumers, Keeping Customers, Paying for Purchases and Shopping In-store and Virtual.
MasterCard looks at trends in a new report
Economic Outlook
Inflation is impacting household budgets as 2023 begins, but the report says consumers are still in buying mode, with a backlog of demand for travel and eating out after the pandemic shut downs. Many consumers will opt for cheaper options and spend less on discretionary retail like furniture, electronics and apparel. One result of the pandemic may be a permanent reduction in in-person shopping.
Regarding understanding consumers, the report emphasizes the need to data to inform retailers’ decision-making and flexibility to change with trends. Consumers are increasingly looking for personalized experiences in retail.
Privacy concerns has driven a change in the way some retailers are reaching consumers. Apple’s decision to allow iPhone users to opt out of allowing apps to track their activity is a big factor with 96% of iPhone users choosing to opt out. Another factor is websites giving users the ability to opt out of “cookies.” These and other factors have caused Retail Media Networks to grow, giving large retailers a platform to sell ads to vendors. Social media and commerce on social media is growing as well. The report expects a 31% increase in social commerce from 2022 to 2030.
The report states that periods of economic change cause customer loyalty to be unpredictable, so rewards programs become more important for retaining customers. Paid memberships is another innovation that the report explores.
How customers pay is of course a big concern to MasterCard, and the report has a section devoted to that subject as well. The payment choices available have exploded in recent years, from bank phone apps to apps like Venmo and PayPal to cryptocurrency, payment is now much more than “cash, check or card?” In a survey, 44% of consumers said they have made a contactless payment in the past year, rather than inserting or swiping a card.
Increasingly the lines between shopping in person and shopping online are blurring as consumers just think of both as “shopping,” but each will continue to have their own advantages and unique needs.
