The retail industry has had to do a lot of maneuvering over the last 18 months. But that hasn’t stopped businesses from adapting to the changing marketplace and finding innovative solutions.
Some retailers were forced to close shop for weeks or months at a time, placing a great deal of stress on brick-and-mortar locations. Investing in e-commerce was the solution for many, but the rise of omnichannel retailers has shown us how important it was and still is for brands to offer unique, personalized experiences.
The pandemic isn’t over yet, and until all mandates, restrictions, and lockdowns are concluded, brands will need to act with foresight and purpose to meet the needs of their customers.
Retailers shouldn’t expect one-size-fits-all solutions, but the industry trends that have shaped 2021 are key indicators for where we’re headed in 2022 and beyond.
Consumer sales are in the green
The pandemic has affected virtually every aspect of our lives, but it hasn’t diminished the importance of consumer goods. Consumer sales are in the green and that’s allowed more retailers to reopen after lockdowns put a halt to operations back in 2020.
This year’s holiday season has also shed some light on consumer purchasing habits going into next year, as brick-and-mortar and e-commerce sales saw a substantial uptick throughout November and on Black Friday.
Further, consumers are excited to make experienced-based purchases such as flights, hotel bookings, and vehicle rentals. Both regional and international travel has encouraged the reopening of the global market, which means more opportunities for consumers in 2022.
E-commerce continues to thrive
E-commerce sales have been on the rise for years, but pandemic-enforced lockdowns introduced a wave of online purchases made in the US and around the world.
Not only are e-commerce sales considerably higher than they were in 2019, but a Verizon Look Forward study from earlier this year revealed that the percentage of adults who shop in-person came down from 60% before the pandemic to now 37%.
Adobe also reported this month that consumers spent nearly $110 billion online throughout November—a 12% increase from last year. This percentage is unlikely to hold if reopenings continue, but retailers across the board have adopted digital-first approaches while investing in online-only warehouses and new technologies.
Should these consumer trends continue into 2022, e-commerce will continue to act as the backbone for the retail market and wider economy.
Last-mile solutions meet supply chain demands
Retail giants like Amazon have shown us how fast fulfillment and delivery processes can be, but supply chain delays throughout the summer and fall put consumer expectations in check. The supply chain will inevitably speed up as global economies reopen, but retailers will need to invest in last-mile solutions that prioritize speed and affordability.
The Verizon Look Forward study again reinforced the strength of the e-commerce market—reporting that 90% of consumers say they would purchase goods online more often if free shipping was an option.
Further, they found that companies that offer free shipping had 20% higher conversion rates than those that didn’t. Different retail segments require different delivery speeds, but we’re seeing the same trend across the board: consumers expect two-day shipping.
Retailers like Sephora, Bed, Bath and Beyond, and Michaels have already teamed up with same-day delivery service providers and other brands will need to do the same if they wish to compete in this speed-driven market.
Personalized experiences present a clear path forward
As the effects of the pandemic subside, omnichannel retailers must find ways to incorporate personalized experiences into their brick-and-mortar and online stores. Retailers provide each customer a unique, tailored experience and in return, they receive valuable data they can use to boost brand loyalty.
Thanks again to Amazon and their competitors, consumers have grown to expect personalized experiences from the point of entry to the point of purchase. A 2018 survey by Epsilor and GBH Insights found that 80% of adults were more likely to make a purchase when brands offer personalized experiences.
Consumers care about diversity and inclusion
2020 wasn’t just defined by the pandemic, as millions of people across the country stood in protest against racial inequality and bigotry. Attitudes have remained quite the same over the last 18 months and retailers are affected just the same as other industries by social pressure and demands.
Gap and Sephora are two retailers who’ve taken steps towards improving diversity, racial equity, and inclusivity. The former has doubled its Black and Latino representation in its headquarters and the latter dedicated 15% of its shelf space to Black-owned businesses.
There is a lot of work to be done in these areas, but 2022 represents an opportunity for retailers large and small to make transformational steps.
Retailers have an enormous opportunity in 2022
Looking ahead, there’s an enormous opportunity for retailers who want to capitalize on the events of the 12-18 months. Most brands understand the importance of digital-first solutions, but industry trends go much deeper, and retailers have a lot of considerations to make for the new year.
With the pandemic not quite out of the picture, retailers will need to act in alignment with these trends to meet the needs of consumers across the country.