InsideOutdoor | WINTER 2023 13 • Retail’s “e-pocalypse” will bankrupt U.S. online-only brands that lack a physical strategy – As consumers revert to pre-pandemic behaviors, the year-over-year change in online retail penetration in 2023 will settle back at 1.5 percent (down from 3.5 percent in 2020), meaning that 76 percent of total U.S. retail sales will occur offline. In 2023, midmarket to enterprise-level pure-play retailers will need to choose one of three options: • Open physical stores • Develop shop-in-shop locations or wholesale partnerships • Close their (virtual) doors • Retailers will choose one of two supply chain paths: own it or outsource it – Companies such as American Eagle Outfitters and Gap Inc. now offer supply chain as a service, orchestrating execution of contract manufacturing, transportation or storage to share capacity with other brands. But some retailers will opt to outsource outright — moving resources, talent and capital into more customer-facing functions that include marketing, commerce, tech and customer experience. • Automation will be the savior for continued retail labor shortages – Ripple effects from the Great Resignation will force retailers and brands to invest more heavily — and more strategically — in automation. Investments will automate functions required to run the business in corporate areas (e.g., marketing, HR, analytics) — and in the store. • Paid membership programs will boom, but most will be so-so programs that fizzle fast – Taking a page from programs such as Amazon Prime, Costco and Walmart+, Forrester predicts many retailers will channel marketing dollars into a glut of paid membership programs to cultivate recurring customer relationships and more predictable revenue streams. But unless a retailer can articulate clearly to customers why they should sign up and stick with the program, the ROI on that spend will tank. • Retail media strategies will yield far more conversation for most than actual revenue – The bottomline impact of retail media dollars will be notable for only a few massive retailers — and remain negligible for most others. Forrester expects the U.S. market to double to $62 billion by 2024, up from $29 billion in 2021. It says retailers should compete for retail media dollars with advertising in their stores that will reach far more customers than their digital properties. m For more information, you can access the Forrester's predictions hub by going here: https://www. forrester.com/predictions/?utm_ source=chainstoreage&utm_ medium=pr&utm_campaign= predictions_2023
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