Retailers, partners and members of the media participated in NRF’s third annual State of Retail & the Consumer virtual conversation, hearing from retail leaders, prominent economists and consumer experts who explored the health of the American consumer, the economy and the retail industry.
At the top of the program, NRF Chief Economist Jack Kleinhenz announced the National Retail Federation’s annual forecast anticipating that retail sales will grow between 4% and 6% to more than $5.13 trillion in 2023.
Throughout the event, attendees asked questions and received answers from NRF through a live Q&A. Below are the three most frequently asked questions:
What has the consumer behavior shift during and after the pandemic looked like across different retail sectors?
With the first influx of stimulus payments and the spike in personal savings in 2020, lower-income households were the first to increase their spending on luxury and accessible luxury apparel, accessories and footwear, growing their spending at a faster rate than on other, non-luxury, brands in these same categories. These households were also the fastest to pull back on their spending on these same luxury and accessible luxury items in 2022, as their savings dried up and they faced higher costs in other areas of their lives. Notably, higher-income households, who make up the bulk of spending on luxury and accessible luxury goods, initially pulled back on these items in 2020 before rebounding in 2021. They have yet to feel pressured to pull back.
Watch NRF's State of Retail & the Consumer 2023 event to catch up on consumer spending and trends.
Many restaurants expanded their delivery and pick-up options during the pandemic, begging the question that if consumers could experience their favorite local restaurant from the comfort of their home, would they ever want to return in person? The data points to a resounding yes. Online orders from restaurants and fast food surged in 2020 but quickly tapered off in 2021 as vaccines and the lifting of many restrictions made consumers more comfortable dining inside. Even with the tremendous growth of online during the pandemic, bricks-and-mortar remains the dominant channel for both restaurants and shopping.
Learn more about consumer behavior trends across categories in our recent report.
What are the top technology trends retailers are focused on?
Retailers are constantly innovating to meet the changing needs and preferences of consumers, employing new tools and strategies to drive customer engagement, retention and value.
Many retailers invested in technology throughout the pandemic whether that was streamlining ecommerce experiences or rolling out contactless payment. These investments are paying off today as consumers have become more comfortable shopping across channels, depending on what is most convenient or cost-effective for them.
Artificial intelligence, machine learning, augmented reality, virtual reality, blockchain and robotics are all emerging technologies on retailers’ minds. Here’s a few tech predictions from NRF for 2023:
- Investments in the metaverse will increase for some companies, but not across the board.
- As the next generation of AI computing power takes root, retailers will be able to deliver personalized and relevant digital marketing messages, enhanced by first-party data.
- Progress in Web3 will advance – especially blockchain technologies, but overall acceptance is still in the early stages.
- Smaller footprint stores will flourish as retailers experiment with new formats.
- Generation Alpha is poised to be the largest and most technologically connected demographic in history, ready to test retailers like none before.
- Expect less chaos in the supply chain and a greater focus on projects that enable visibility and a spotlight on emerging third-party logistics platforms.
More insights can be found in NRF's 2023 predictions blog post.
Take a look at this year's annual retail sales forecast FAQ's.
What economic factors does NRF’s retail sales forecast take into account?
NRF’s forecast is based on economic modeling that considers a variety of economic indicators including employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales. The calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail. Learn more in our forecast FAQ.
Inflation is taken into consideration as it can impact how, and how much, consumers spend. However, the forecast is presented on a nominal basis, which means that it is not inflation adjusted.
Check out more insights from NRF’s State of Retail & the Consumer and watch a recording of March 29’s event.
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