Many companies report negative trends in sales growth. Even the best-run organizations can’t prevent declines in both volume and value. Sales Trends for 2023 , If you’re a growing company, you should expect a period of slow growth before your next bump in revenue generation. Fortunately, there are ways to reduce the impact of falling sales on your business. Let’s explore some ways that your sales data could be misleading, and discuss strategies for minimizing drops in revenue and profits.
In fact, a 2021 survey of business leaders worldwide found that 75% believe that the steps they’ve taken to adapt to recent challenges will serve them well in the future. Customers’ preference for unassisted channels corresponds with 23% higher purchase regret, compared to purchases that involve human interaction.
Let’s explore 5 Sales Trends for 2023 ;
1. Companies report negative trends in sales data
Sales data can often be misleading. The best-run companies rarely see a decline in revenue for several quarters in a row. However, some companies don’t see a drop in sales until their cash flow starts to contract in the fourth or fifth quarter of the year. Sales Trends for 2023 , When this happens, executives often wonder if the company is in a sales slump or if demand for its products is falling.
Sales trends analysis refers to collecting sales data over a period of time from multiple sources and comparing it with previous timeframes to identify patterns and project future trends. Simply put, sales trends analysis allows you to use what has already happened in the past to predict what will possibly happen in the future.
To avoid making the same mistake, it’s important to look at the trends in your sales data and check for patterns that indicate a decline in demand for your products. By doing this, you can identify any potential causes of a potential sales slump.
2. Shifting buying habits
One common cause of negative trends in sales data is shifting buying habits. When people discover a new product or service, they tend to start using it more often, and make purchase decisions accordingly. As a retailer, this is good news! As more customers use your products, you’re likely to see more sales. Unfortunately, people also tend to research your competitors’ products more before making a purchase decision.
Your sales reps have roughly 5% of a customer’s time during their B2B buying journey. Lack of time with buyers coupled with rapidly shifting buying dynamics, fueled by digital buying behavior, is reshaping the strategic focus of sales organizations.
In fact‚ Gartner research finds that when B2B buyers are considering a purchase‚ they spend only 17% of that time meeting with potential suppliers. When buyers are comparing multiple suppliers‚ the amount of time spent with anyone sales rep may be only 5% or 6%.
As a result, they may decide to test the water with your products before committing to a purchase decision for one of your products. This means that as people become more familiar with your products, their buying habits begin to shift towards others in the industry. Sales Trends for 2023 , This shift in buying habits can be a precursor to a decline in sales, or it can be a result of a decline in sales. It’s important to note that a decline in sales does not necessarily mean a decline in profit.
3. Lower spending on new products and services
Another factor that can cause sales to decline is a lack of new product development. New product development is expensive. It takes time and money to develop new products and market them. Sales Trends for 2023, To make matters worse, some new product development projects are never finished. Companies then try to launch the product, only to have the market drive them out of business.
More interestingly, these habits seem like they’re going to stick as US consumers report an intent to shop online even after the COVID-19 crisis. Categories where expected growth in online shoppers exceeds 35 percent include essentials such as over-the-counter (OTC) medicine, groceries, household supplies, and personal-care products. Even discretionary categories such as skin care and makeup, apparel, and jewelry and accessories show expected customer growth of more than 15 percent.
Even if new product development does succeed in the beginning, the project is likely to fail in the end. This is because new product development is a long-term project that relies on customers being able to identify need and want with your new product. Sales Trends for 2023, At best, you’ll be able to trial the product for a few months and see if it works for consumers. If not, you’ll have wasted a significant amount of money and resources that could have gone towards developing a new product.
4. A lack of new product development
Another factor that can cause sales to decline is a lack of new product development. This is a problem that retailers face all too often. A lack of new product development can be caused by a number of things. Sales Trends for 2023, Some companies decide that new product development is too expensive, and prefer to invest their resources on other, more profitable activities.
New products are good for the organization. They tend to exploit as yet untapped R&D discoveries and revitalize the engineering corps. New product campaigns offer top managers opportunities to reorganize and to get more out of a sales force, factory, or field service network, for example. New products capitalize on old investments.
When new product development is too expensive, some retailers choose to carry products that are already available at lower prices. This kind of “sales blocking” happens all too often in the eCommerce industry.
5. Shifting to digital channels
One strategy that retailers can use to try and combat a lack of new product development is to shift their business to digital channels. Digital channels don’t require a huge investment up-front, and they can generate sales even in a cyclical retail environment. Sales Trends for 2023, In addition, sales from digital channels don’t show up on your actual earnings statement, so you don’t have to worry about them affecting your bottom line.
We can help you integrate your data, apply advanced analytics to extract usable insights, and apply data and insights to improve marketing performance. What’s more, we’ll show your marketing and analytics teams how to do it so that you enhance your in-house digital capabilities.
What’s more, retailers can try out new technologies and innovation before seeing it in action in their own stores. This is a great way to test out new technologies without risk. Many digital channels are easy to use, and customers can easily find what they’re looking for using a single view technology. One downside to digital channels is that they can be hard to find in some parts of the world. Sales Trends for 2023, If you’re an international company, you’ll likely have more issues with this as you try to find a digital channel in your country.
Bottom line
If you’re a growing company, you should expect a period of slow growth before your next bump in revenue generation. Fortunately, there are ways to reduce the impact of falling sales on your business. Sales Trends for 2023, Let’s explore some ways that your sales data could be misleading, and discuss strategies for minimizing drops in revenue and profits.
