2023 is in the rearview; however, it is not quite finished with us yet. It was an uneven year for most companies and as much as we would like to wipe the slate clean for 2024, there will be a carryover effect, though that is not necessarily a negative. 2023 was supposed to be a year free of supply chain disasters and the struggles of the pandemic where companies could flourish and return to expansion and innovation. It didn’t quite play out that way and an unreliable economy left most scrounging for profits and relying on end of year shopping to make it back in the black. The good news is that Black Friday shopping worked well for those who participated and has set up 2024 as a year of prosperity instead of one of recovery. What did we learn from a rollercoaster 2023 and will it be enough for 2024?

It’s impossible to talk about 2023 without addressing inflation issues that stifled many companies, especially early in the year. Rising prices did the job of scaring off consumers and they spent most of last year reluctant to spend. Traffic fell in restaurants and retailers finally had fully stocked shelves that no one was cleaning out. Raising prices was an early solution, especially in restaurants, where higher priced items could offset fewer customers. This improved profits for some, yet it did nothing to convince customers to return. What turned out to be a more sustainable venture, and perhaps one we will see expanded in 2024, is the push for loyalty programs and the integration of physical and digital storefronts. Giving consumers unprecedented freedom in how they want to shop while also offering personalized deals has paid dividends and combatted higher prices. It has not been a perfect solution and inflation will continue to be a problem in 2024.

The trend of using technology to bolster physical stores looks to continue this year. We saw more companies make the jump last year with loyalty or rewards programs debuting every month. It has become clear that without an online presence it will be hard to stand out and grow any brand. We also saw companies begin pushing expansion plans again after having them on hold for several years. It’s not just that companies are expanding again, it is how they are expanding that is important. Prior to the pandemic, companies were more focused on traditional stores for expansion and in the years immediately following 2020 we saw businesses pivot to non-traditional offerings like ghost kitchens or pop-up stores. What we are seeing now is an amalgamation of these ideas where each company has plans to open multiple types of stores that fit different formats depending on location. This is in line with the commitment to meet customers where they are with regards to physical and digital shopping channels. These hybrid stores and restaurants will be a big deal in 2024 and we will hopefully see some new types of stores added this year.

The ending of 2023 was punctuated by Black Friday, and it needed to deliver. Retailers pulled out all the stops by extending sales for months at a time in some cases. They continued to push online shopping with many of the earliest and best deals appearing exclusively through apps and websites. It paid off with consumers spending $9.8 billion in online sales, a 7.5% increase from last year, according to Adobe Analytics. Consumers that had been reluctant to spend throughout the year finally turned up and gave retailers the relief they had been looking for. Companies will be looking to continue this momentum into the new year and prevent traffic from declining like it did for much of last year.

2023 did not go the way many thought it would, yet it still ended up being a success for many. The focus for 2024 will be consistency and avoiding the need for a shopping surge at the end of the year. Companies learned valuable lessons last year and the commitment to evolving digital options while increasing convenience for consumers seems like the most viable path to success going forward. There will likely be new challenges this year, yet the issues of the last four years have taught us that anything can be overcome.