Retailers are continuing to deal with volatility after undergoing an immense amount of change in a condensed time frame. So says Deloitte.

Only a third of retail executives are very confident about maintaining or improving profit margins in 2023. Nearly all executives expect inflation to pressure profit margins. Sixty percent of respondents shared predictions for inflation to raise operating costs. And while it has become the norm to pass higher prices on to consumers, many questioned how long the trend will be able to continue, noting hard times for consumers.

Nearly all of the respondents anticipate consumption in 2023 to diminish because of rising financial concerns. At the same time, retail theft is expected to rise, posing a threat to retailers. This changing consumer will be a key challenge in 2023.

Two-thirds of executives expect price to be more important than brand or retailer loyalty and 90 percent say consumers will expect seamless shopping experiences across all channels. Since consumers expect the best price in the most convenient way possible, retailers have offered many services, including same-day delivery and curbside pickup, to guarantee an excellent customer journey — but meeting consumers wherever they have been costly. With this fulfillment acquisition costs have increased by more than 60 percent between 2013 and 2018.