Decisions to Shape Retail in 2022
Today’s retailers may have never been through such a turbulent time. While the majority’s priority is to ensure their businesses don’t go bankrupt, some retailers have managed to achieve extremely high growth rates by acting to meet demand in new and unexpected areas. While we are not yet entirely out of crisis mode, it is time to go beyond the current situation and consider preparing your business for recovery and growth.
Retailers that offer vital services in the digital environment will increase their sales in the next five years.
In 2022, retail is stepping into a year that most will be happy with, with regular significant changes in consumer spending and growing fatigued to manage the impact of the pandemic.
Looking at 2022, while many things remain uncertain, 2021 ended with introducing a rapidly spreading variant that once again caused disruptions.
Conscious consumerism, which has been reshaping consumer behavior for several years, remains a force to be reckoned with.
From environmental concerns to the desire to be better represented in the products sold, the consumer expects the businesses they interact with to do better in 2022.
In the UK, 41% of Britons agree that recyclable choices and sustainable packaging influence their purchasing decisions, and 70% are willing to pay a 5% price premium for sustainable products. As customers increasingly opt for eco–friendly products, retailers are encouraged to make sustainability an absolute priority.
In 2022, responsibility will talk about the green identities of brands and retailers and convince the customer that their efforts are genuine.
With the proliferation of new platforms emerging to capitalize on this trend, second–hand sales will undoubtedly see massive growth in 2022 in fashion and other areas such as household goods or electronics.
Backed by transparency and strict adherence to ethics, and convince themselves that the businesses they buy are doing more good than harm.
- Live Stream
Live streaming can instantly purchase a product featured in live streaming video at the forefront of shoppable content.
- Hybrid Retail
We should expect the shopping journey to start online in 2022, but that doesn’t mean it has to continue online all the time.
For many years, retailers have gained a more complex understanding of the customer’s purchase journey and how they go online to offline several times before making a purchase.
This highlights the need for genuinely hybrid retail, which is being embraced by retailers both large and small.
We see smaller retailers develop “hybrid” retail models, taking better advantage of the internet’s opportunity to complement their physical stores.
An omnichannel strategy can be implemented by in–store shopping appointments to elevate the consumer experience, accessing customers’ online sales history to offer in–store discounts, or equipping affiliates with customer order history so they can share personalized recommendations. Moreover, the store has become a sales channel that matches Instagram, TikTok, or the online store in today’s commerce environment.
That means revealing live store stocks on Google, Facebook, and many other social networks that we’ll see launch local commerce offerings in 2022.
Whether this focuses on reputation management and offers customers more flexibility in managing their finances by providing a range of payment options such as buying now, paying later, or capitalizing on an increased desire to shop locally, retailers will need to focus on retention.
As retailers try to survive the waves of change in the coming year, they will want to leverage the power of the local grocery store to increase loyalty and look for other ways to strengthen relationships with existing customers.
- Consumer Spending to Contract in 2022
Ultimately, individual retailers will always need to provide consumers with a solid reason to buy.
But it may also be helpful to consider which types of retailers consumers prefer, rather than just thinking about the channels through which they transact. The research results show that even if customers prefer to shop in the physical store, retailers that offer vital services in the digital environment will increase their sales in the next five years. This highlights the importance of presenting retail experiences in an integrated way, both online and offline.
By 2024, 53% of retail revenues will belong to retailers that offer digital services as part of their business model. If stricter quarantine measures are extended or reinstated, this rate could rise to 56% as consumers prefer online shopping over in–store shopping. In digitally savvy markets like the UK and the US, two–thirds of revenue will go to retailers operating in digital channels.
Due to the richness of the retail ecosystem, the expression “sellers providing digital services” can appear in quite different forms. These include retailers that have already embarked on their digital transformation journey and offer services mainly in the physical environment. The range we’re talking about also includes local vendors that continue to grow through multinational companies and will increase their share in most markets over the next five years. Retailers that only provide services over the internet but expand their services by opening stores and physical venues are also included in this range.
Over five years, omnichannel players and commerce sites will account for 86% of sales growth.
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