The retail industry has changed dramatically since the beginning of the COVID-19 pandemic. Consumer behaviors changed, eCommerce matured significantly, marketing became more sophisticated, and so on. With changes happening rapidly, it becomes challenging to predict what will shape the future of the retail business. To help you determine what happens next, we performed research, combined it with our 11+ years of industry expertise, and developed a list of the TOP 5 Biggest Retail Trends of 2022.
This list avoids buzzy topics like cryptocurrency, metaverse, NFT (Non-Fungible Token), or VR (Virtual Reality). We’ve all heard or read about them, and if you are not leveraging them now, there likely isn’t a need to in the near future. The list below focuses only on predictions to help you boost sales and win in the retail landscape of 2022.
Without further ado, let’s begin!
Invest in Supply Chain Management
The supply chain industry is struggling. The global shipping container shortage, the situation with Evergreen, and the overall pandemic drove businesses to raise the shipping costs and delivery timing for any type of product. According to Bloomberg, in 2021, the rates for container delivery were 25-50% higher than the prior year. While the numbers may vary from region to region, we expect this retail trend to continue in 2022.
The way businesses can overcome this issue is by diversifying fulfillment options to reduce shipping costs. You might choose between moving manufacturing locations or investing in optimization of the supply process. Both options are profitable in the long-term but have different costs. We suggest optimization of the supply chain solution as it costs 5-10 times less and can be implemented in a specific timeline.
Go Beyond Traditional Delivery
Over the last few years, we have seen dramatic growth in eCommerce. This retail trend will continue in 2022, where eCommerce sales will hit 1 trillion dollars, making eCommerce around 20% of overall retail sales! Consumers, now more comfortable with online ordering, are demanding more from digital retailers. Specifically, customers are looking for fast, convenient, and reliable delivery and return options.
Related Article: Return Merchandise Authorization: how to spoil nothing
According to the Metapack Ecommerce Delivery Benchmark Report (2021), more than 50% of respondents say that delivery choice is the most important factor affecting their online shopping. If we compare 2019 and 2021, options like curbside pickup rose from 4% to 58%, and buy online pickup in-store (BOPIS) adoption rose from 66% to 76% (Total Retail, 2021). In addition, as HBR reports, 40% of Americans who have used BOPIS or curbside pick up will continue to use those after the pandemic.
This data points to the need for businesses to implement non-traditional delivery options. Think of reorganizing part of your store as a mini-warehouse with a micro-fulfillment center. This requires an accurate, real-time understanding of inventory levels across your business (different locations and warehouses, online and offline). Modern, custom POS solutions can help you make the process of stock control smooth, transparent, and effective.
Related Case Study: Check out how Maven has helped a large retail network to become a 300% more productive by overcoming the issue of inventory tracking with custom POS solutions.
Rethink Brick-and-Mortar
As we mentioned previously, eCommerce is growing faster than ever, but still represents only 20% of all retail sales. The traditional, old-fashioned format of stores is losing relevance. The new king of offline retail is a personalized, experiential customer experience.
Westfield’s last report, says that 81% of consumers globally are willing to pay more for experiences that elevate shopping. In addition, 60% of consumers expect more than half of the retail space to be devoted to experience rather than product by 2025.
You need to entice customers to visit your store and engage there, and as a result, make a purchase. Here’s a few examples of how some retailers are adapting to this new reality:
- Canada Goose is creating special “cold rooms” in some of their stores to help customers test and decide how warm the brand’s clothes are.
- Casper offers 30-minutes Nap Appointments to test their mattresses, sheets, and pillows.
- FAO Schwarz is promoting a unique “The Virtual Personal Shopper”. The brand offers two innovative ways to interact with its products. First, parents can virtually connect to a personal shopper via video call who helps find a perfect gift for the kids. Second, kids or the whole family can connect to a live stream with FAO characters to create a one-of-a-kind toy.
- Self-checkout systems and stores with no cashiers are becoming more common. Those systems deliver on the customers’ need for speed, reliability, and convenience.
Try Social Commerce and Live Streams
The percent of millennials and Gen Z in the US population is growing steadily. Today, more than 50% of the US population is under 40 years old. These consumers accounted for 62% of overall spending. More importantly, these ever more influential groups have non-classic buying behavior, and it’s changing fast.
To stay relevant in 2022, look to adopt social commerce and live streams. According to a recent study by Accenture, shopping on social media could hit $1.2 Trillion by 2025. At the same time, 97% of Gen Z consumers say they now use social media as their top source of shopping inspiration. To win in the social media age, adapt your marketing strategy, simplify a checkout experience, and use influencers. Micro and nano influencers are a great way to target niche audiences with your products.
Live streams can be a bit more confusing. This innovative approach has come from China but is already showing impressive results for some US retailers.
Livestream is a demonstration of products in a live format within the social network. The influencer or the salesperson can answer questions, discuss the brand, and share real-time experiences. This takes the personal shopping experience to a completely new level. In China, the value of the live-commerce market has grown over 280% between 2017 and 2020, and we are expecting the same growth in the US and Europe within the next few years.
Implement a sustainability strategy. It’s a must-have
Global supply chain concerns, freshly released research on climate change, and the ongoing pandemic will make sustainability a top 2022 retail trend.
What has changed? Millennials and Gen Z have seriously stepped up in areas of conservation and global care. An eMarketer study shows that 71% rate sustainability as “important” or “very important” in their lifestyle category purchase. Even more, 93% of global consumers expect more of the brands they use to support social and environmental issues. Finally, 32% of shoppers valued sustainability more than factors like price and speed and are prepared to spend up to 20% more on eco-friendly products.
Related post: 3 Powerful Technologies to Drive Sustainability in the Fashion Industry
What can you do to meet this need? Look to apply alternative packaging, make sustainability a part of your brand story, or try to recycle or resell old goods. For example, the large apparel retailer Lululemon has recently started to resell cloth to create a healthier future.
Wrapping Up
Understand that success in the modern retail world is impossible without innovation. The rapidly changing environment is dictating new rules faster than ever before, and it’s crucial to be flexible and responsive to these changes. Approaches such as omnichannel strategy or mobile-first are not future trends anymore. They are a reality that must be addressed by your business.
Start the transformation process today. Contact Maven to benefit from our strategic and technological expertise. We know how to help your business achieve maximum value from today’s retail trends!
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