InsideOutdoor | WINTER 2023 12 One burning question retailers want to know going into the new year is: Will the economic rollercoaster ride even out? Since March 2020, when the COVID-19 pandemic resulted in stark changes to the economic world and how business is done worldwide, the economy has been volatile. During the past year we are beginning to see positive signs of recovery from shutdowns in manufacturing and the effects that had on the supply chain, and yes, the inflationary pressures caused by the supply chain problems and the government’s COVID stimulus programs. But during the past two years, we’ve also seen a new paradigm emerge in the relationship between employer and employees because of the so-called “Great Resignation” and the ever-present “Silent Quitting.” The further distance we put between the onset of the pandemic, the stronger the economy appears to be. Or is it? Perhaps there was just too much damage done by the pandemic to resume growth at the levels that were apparent prior to it? For the past year, economists and financial professionals have been predicting a recession. Yet, strong job growth and the gentle tamping down – in the last three months – of inflation makes that forecast questionable. While some major investment bankers say a mild recession may become reality late in the year or early in 2024, others say the way the Federal Reserve is managing inflation may allow us to escape recession altogether. Even the National Retail Federation (NRF) isn’t quite sure. NRF Chief Economist Jack Kleinhenz acknowledges the U.S. economy’s rate of growth is slowing, but consumers remain financially healthy. However, he says there is about a 33 percent chance it will be “touch and go” in 2023. Holiday spending overall was good, but does that portend anything for the coming year? Kleinhenz said that “despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been steadfast in their spending and remain in the driver’s seat.” So what does all this mean for the retail industry, and especially the outdoor sector, which experienced a resurgence of popularity during the pandemic lock down, as people seemed to rediscover the great outdoors. According to Forrester – the company that produces research to help businesses pursue their most pressing initiatives – this year will not necessarily end the roller-coaster ride. In its research, Forrester concludes that in 2023 retailers and brand manufacturers will balance their growth strategies with tactics to manage continued uncertain economic and (post-) pandemic conditions as well as rising consumer expectations. Forrester suggests retailers will choose between doubling down on or outright outsourcing supply chain capabilities. “They’ll turn (or even return) to automation to both shore up staffing and raise competencies in-store and at headquarters. And they’ll find that paid membership programs and retail media success depend on yet more investment, not dabbling.” It also states online-only brands are in for a “reckoning,” listing an “omnichannel presence” as one of five trends detailed in its Predictions 2023: Retail report. The report estimates that total U.S. retail sales in 2023 will hit $4.7 trillion, of which online sales will top $1.1 trillion. “To succeed, retailers must focus on becoming ‘future fit’ as they position their business model, marketing, stores, and operations to weather and grow through economic issues — not least of which is global inflation — and into the post-pandemic world,” the report states. Among Forrester’s 2023 Retail predictions are: Continued Bumpy Economic Ride Forecast for 2023 By Bruce Christian
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