Retail Predictions 2022

6 Top Retail Predictions for 2022 and Beyond

18 November 2021

Retail | News & trends

Already, the year is drawing to a close which means two things:

  1. It’s almost mulled wine season
  2. We’re almost 2 years deep into the pandemic

As we emerge from an era which flipped life as we know it on its head, consumers have been switching up their previous buying habits for ones that fit better into their new lifestyles.

Consumers have been spending more on products which complement rituals that have helped create emotional stability and more convenient routines during an unpredictable period. They’ve been investing in things like home workout equipment, meditation and mindfulness apps, smart speakers and meal kit delivery services. 

As we head into the festive season, the physical store is set to play a pivotal role as the preferred sales channel for last-minute Christmas shopping. In 2020, in-store sales were up 160% one week before Christmas and this trend is set to be repeated in 2021 as supply chain concerns put a strain on consumer trust in ecommerce.

But the evolution of consumer preferences doesn’t end here, and this article will list the top predictions for retail trends and new retail concepts in 2022 and beyond.

 

1) Transparent sustainability policies

As could be expected, the increasing public awareness of environmental damage and climate change is luring consumers towards greener purchasing options.

49% of adults in the UK, and 41% in the US prefer to buy environmentally sustainable products. 

Many retailers are jumping on this trend by stocking products made from recycled or sustainable materials, but this won’t cut it in the future as consumers will be on the lookout for ‘green-washing’. This is where brands present purchases as sustainable despite wastage or environmental harm in the supply chain or production.

As consumers become increasingly educated on issues around sustainability, retailers can position themselves as a trusted source of eco-friendly products by using buy back schemes or re-selling second-hand products. This gives used products a new lease of life, reduces wastage and production and also widens the consumer base to those on a lower budget, as pre-owned products are typically cheaper. 

Transparency is critical here. Customers want to know where their purchases have come from and be able to easily access information about the environmental impact of product source materials and packaging. Making this data easily available will improve perceptions of brand integrity.

 

2) Easy returns and rapid refunds

The growing consumer preference for sustainable retail seems to be at odds with the equally booming preference for free and easy returns. 

60% of US consumers prefer retailers to offer free returns shipping, and 2 in 5 want a retailer to provide refunds via the original form of payment.

62% of customers expect to be refunded within 30 days.

Ensuring frontline employees are fully trained in processing returns accurately and streamlining processes to make returns, exchanges and refunds as frictionless as possible improves customer trust and boosts brand loyalty.

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There are ways to try to balance sustainability with free returns. On average, 20% of online purchases are returned compared to 9% of products bought in a physical store, indicating that a key motivation for returns was products not being as expected.

Ensuring that product descriptions are detailed, have accurate sizing measurements and providing high quality photos and videos on company websites or well-attended fitting rooms in stores reduces the likelihood that customers will be dissatisfied with their purchase.

 

3) Investing in tech to streamline employee experience

36.8% of retailers are spending more on tech investments now than they've done in the past. Many are investing in software which benefits task management, communication and training in ways that help teams work more efficiently around the new challenges of the pandemic. 

84% or retailers have equipped store associates with mobile devices, which can enable them to use task management software and access training and communication channels without having to disrupt their work by leaving the shop floor.

60% of retail decision makers  are planning to invest in digital workplace technology for their frontline teams.

By 2026, 50% of retailers will have fully automated intelligent tasks and streamlined data processes. Digitizing these tasks gives HQ visibility into store compliance and gives employees more time to spend on higher-value tasks, like helping customers. 

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4) Reliable supply chain management

Forrester data shows that product availability is one of the most common reasons consumers purchase from a retailer other than the one they originally intended. Retailers can encourage brand loyalty by stabilizing supply chains, creating clear lines of communication between suppliers, HQ and stores, and being pro-active in informing customers about shortages and delays. 

Using AI helps to optimize the efficiency of the supply chain and ensure products are available where there is consumer demand for them.

It’s predicted that by 2025, 75% of retailers will fully integrate order and inventory data and optimize this against fulfilment needs. This will involve integrating master inventory, order and POS data into a unified system which customer service and sales associates can access. This marks the beginning of a transition to AI-based fulfilment and is predicted to improve conversion by 10% and customer satisfaction by 50%.

The enthusiasm around sustainability is also present in the consumer desire for a more eco-friendly supply chain.

It’s predicted that by 2025, 75% of retailers will implement critical supply chain KPIs that tie carbon emissions and environmental factors to both product development and supplier selection, boosting customer loyalty by 45%.

Being transparent about the sustainability of the supply chain will win the trust of consumers.

 

5) Integrating stores into omnichannel

Retailers are seeing more variety in how consumers engage with their brand, and shoppers expect to be able to easily make purchases in the format that best suits them.

The rise of social commerce means consumers can make a purchase directly through a social media app like Instagram, Facebook or TikTok without being redirected to a 3rd party site.

But this doesn’t mean that customers don’t want to visit stores anymore.

55% of consumers indicated they sometimes go to a physical store to check out an item before purchasing it online, and 67% of customers use multiple channels. Retailers need to ensure that every channel is providing a consistent customer experience, including the physical store. 

This means consistent branding, pricing, campaigns and access to customer data.

Stores need to be able to access information shared with customers via digital channels, like their personal details, payment methods and things like loyalty points. 72% of consumers expect companies to know their purchase history regardless of the method they used to make purchases from a retailer before. 

Multiple sales channels increases the opportunity for retailers to make the most of insights from customer data to provide a better customer experience and drive sales.

54% of retailers are planning to consolidate customer data and use advanced analytics to drive personalized experiences and improve omnichannel merchandising and marketing.

 

6) Using digital features to enhance the brick and mortar experience

People still like to interact with products and store associates in-store, which is why it’s predicted that digitally native brands will open 850 brick-and-mortar stores in the next 4 to 5 years.

But the role of the store has changed. The key to harnessing the value of the physical store in 2022 is using the digital capabilities of ecommerce to create more valuable customer experiences.

Features like electronic shelf labels notify teams of exactly which products have expired and need to be removed from the shelves, so there’s less chance of them being picked up by a customer.

Another example is Burberry, who have displayed their products alongside QR codes which customers can scan to discover additional content about an item and product storytelling. Additionally, the digital window display fluctuates in shape depending on the movements of customers, encouraging shoppers to take a picture of the display to share online. Customers can also unlock new menu items in the in-store cafe by earning points on their phone in a dedicated WeChat mini program.

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