Consumers will prioritize the price of products over the brand this year, according to two-thirds of retailers, which will pose challenges for them as shareholders increasingly pressure for price increases to offset rising costs, according to the Deloitte Retail industry outlook 2023 study.

At the same time, seven out of ten participants state that workforce management is the main challenge this year, and almost all believe that inflation will impact their profitability, while changes in consumer behavior will have medium-term consequences for their operations.

According to the study, 70% of retailers believe that persistent deficiencies in supply chains will affect industry growth in 2023.

To cope with the challenges related to changing consumer behavior, retailers need to improve their online commerce infrastructure, including delivery and return services, and develop sales through social networks, as recommended by the study.

On the other hand, online buyers have increasingly high expectations regarding order delivery, leading eight out of ten retailers to announce significant investments in modernizing supply chains and distribution this year.

More than two-thirds express high confidence that they will be able to provide consumers with a seamless shopping experience. However, to achieve this, they must invest in more profitable delivery solutions, such as automated order processing centers, which help increase storage capacity, transfer speed, order packaging for multiple stores, and ultimately optimize human resource utilization.

"Online commerce is gaining more ground in European countries, including Romania. Its growth has accelerated during the pandemic period, and although it has slightly moderated afterward, reflecting the desire of buyers to physically return to stores, the latest data shows that the future of commerce is, in fact, online.

According to Eurostat, in 2022, 64% of European Union citizens purchased products or services online, a 1% increase compared to 2021.

The most active in this direction are young people aged between 25 and 34 (87% made online purchases in 2022). In Romania, the percentage of online shoppers is only 46% of the population, but our country is among the EU states with the highest growth rate recorded in the last ten years.

Therefore, retailers must adapt to this trend and offer customers comprehensive services associated with online commerce (more attractive product presentation methods, fast order processing, efficient returns), especially considering that, at least in the EU, buyers increasingly choose products from other member states," stated Raluca Bâldea, Tax Partner at Deloitte Romania and Retail and Consumer Industry Leader.

On the other hand, according to the study, the development of online commerce has raised concerns about managing returns, which have increased compared to physical sales (30% versus 10%). Since customers cannot see and try the product, half of them order multiple sizes and colors to find the right one.

In these circumstances, retailers need to find solutions to provide accurate information about products sold online (size, image, and description) and offer more attractive presentation methods (based on augmented reality).

For example, when a product is viewed in three dimensions, the return rate decreases by 40%. Moreover, the use of artificial intelligence in analysis systems can help prevent fraudulent returns by identifying trusted customers and shortening the refund period. These tools would lead to cost reduction and improve the customer experience.

As retailers assimilate changes in consumer behavior, they see an increasing potential for "social" commerce, with 60% estimating that consumers will place orders directly on social networks this year.

A facilitating factor is that digital natives, who are more engaged in "social" commerce than previous generations, have an increasing purchasing power. Consequently, seven out of ten retailers expect closer collaboration with social networks and influencers to leverage the scope of "social" commerce.