There was a time, two years back, when the retail industry was hit by the challenges thrown by the life-changing Covid pandemic which took over the world and had massive effects on the economy. Cut to 2023, the opportunities for retail and ecommerce have grown significantly as the world moved almost completely towards digital and the shopper’s experience changed accordingly.

Although 2023 brings in renewed consumer sentiment, challenges remain as countries grapple with recession fears and uncertain economic conditions. So, in a market that proposes both opportunities and challenges, what kind of advertising can we expect from this industry?

According to a report by market research company Technavio, the digital retail marketing market is estimated to grow at a CAGR of 26.39% between 2022 and 2027 and size of the market is forecast to increase by USD 902.88 billion. APAC is estimated to contribute 41% to the growth of the global market during the forecast period.

“The rapid growth in social media is a major factor driving the global digital retail marketing market share growth. Social media platforms allow the advertising of the websites of individuals or organizations on a larger scale than most other advertising media. Advertisers are able to build brand acquaintance among users by putting up posts and updates on brand pages, which get shared among their network. Regular updates enhance brand visibility and help acquire new customers as well as increase familiarity among existing customers. The Covid-19 pandemic has had a significant influence on social media usage,” the report mentioned.

Vinay Chatlani, CEO of Soch Apparels in India, swears by digital transformation as being essential for retailers to focus on. "The advertising outlook for Indian retail in 2023 is expected to be heavily influenced by the ongoing digital transformation and the increasing use of technology. Companies will have to become digital-first. Digital advertising, such as social media advertising, email marketing, and influencer partnerships, will most likely continue to be popular options as e-commerce continues to grow at a fast pace. Personalization and targeting will also be key for reaching specific demographics and interests.”

Shreya Sachdev, Head of Marketing at Puma India, however, believes the marketers will return to a balance between both digital and offline advertising. “After witnessing a skewed split of advertising spend between digital and offline media for the last three years, there will be return to a more even distribution between the two channels in 2023. Ease of online shopping has turned retail stores from merely points of sale, to opportunities for deeper and more meaningful engagement with consumers,” opined Sachdev.

She added, “This is also the first year that we will witness sports fans back in the stadiums after a hiatus of three years, opening whole new avenues for marketing.”

Manvi Aggarwal, Chief of staff Mensa Brands, talks about increased spending on content platforms. “With higher focus on profitability and capital efficiency, Indian brands are looking for higher ROI on their advertising spends. Focus on retail media networks, whether e-commerce players or physical retail stores, will continue to increase to capture higher-intent consumers in 2023. We are also seeing increased spends on content platforms & communities (like MensXP and iDiva) that lend credibility to brands and can serve the dual purpose of brand building and performance.”

Study of the consumer is key

Lloyd Mathias, Business Strategist and Angel Investor, feels brands will start working towards acquiring more customers. “In a recessionary world, I think the focus will be on demand-led marketing, which is marketing that will drive demand or will get consumers to go and buy products on ecommerce platforms and other retail platforms. So, I think a lot of it will be focused, not so much on brand building, but on specific reasons to buy, whether it's the big Independence Day Sale, festival offers, special occasions etc. I think a lot of it will be very driven towards getting more customers on the platform.”

According to Nilesh Gupta, Senior Director, Growth, Meesho, “Business objectives will continue to be the driving force behind advertising. And since the macro challenges are expected to sustain at least in H1, I expect brands to continue stressing on their core value prop to maximize returns from their core TG rather than being too experimental. Even in media mix, we'll continue seeing a sharp ROI lens.”

Sourav Ray, CSO, Cheil India, also believes connecting with consumers will be the right approach for marketing in the kind of economy we are living in. “Smart retailers will also activate their loyal base to lower cost of acquisition & selling. Retailers are already capitalising on innovative ways to establish a direct connect with their loyal customers. Be it hosting category-focused shopping festivals which are quite popular in tier 2 towns to sharing personalised communication with their consumers, retailers can leverage myriad tact to connect with consumers. The nub of the matter is that continuous connect with customers is important.”

Vinay Chatlani talks about focus on VR and other new exciting methods of marketing technology to entice customers.  “To effectively target consumers, retailers should use available consumer data to develop clustered advertising strategies that match products to the appropriate audience. Post the pandemic, as more people return to physical stores, in-store advertising and experiential marketing will also become important for retailers in India this year. Retailers will likely focus on creating engaging in-store experiences and using technology such as augmented reality and virtual reality, to create immersive advertising campaigns. Companies will continue to create impactful content through digital catalogues to elevate their presence through media and reach more consumers on a daily basis."

Manvi Aggarwal puts it in the right words, “In the post pandemic world, more consumers are looking for strong purpose-driven brands, whether it's a real effort towards sustainability or focus on employment generation for marginal communities. We are also seeing a higher focus on brands that develop and manufacture their products in India. Consumers are looking for brands they can trust and for that, it's important to invest behind content and creators that resonate with the TG and create a consistent strategy across all channels of distribution.”