It goes without saying: 2021 was a wild year in retail.
The COVID-19 pandemic continued to affect businesses through irregular and unpredictable forced closures as it had in 2020. In addition, businesses also had to contend with the knock-on effects of the pandemic. Supply chain disruptions caused shortages and forced many retailers to adjust their shipping and delivery timelines. Temporary closures at some of Canada’s biggest shipping ports caused by the massive flooding in British Columbia only exacerbated the issue.
Consumer shopping habits shifted in some predictable ways—more online shopping, for example—and in some unpredictable ways. Businesses have had to adapt quickly by adopting new technologies, new strategies and aggressively augmenting their omnichannel capabilities.
While it might sound—and feel—like the world flipped upside-down in 2021, the change has been, largely, for the better. Businesses that embraced the changing retail landscape in 2021 were able to streamline and expand their operations, grow their digital presence, and reach new markets. For those businesses, the change was all good news—and the proof was in the profits.
With new variants of the SARS-CoV-2 virus cropping up late in 2021, it seems unlikely that 2022 will be any less chaotic than its preceding two years. While the retail seas might not be getting any calmer, smooth seas never did make for good sailors… or captains of retail. Chart a course ahead to treasure islands with these trends in retail.
There’s nothing necessarily new about social commerce—the practice of shopping and buying online through social media platforms has been around since at least 2005—but the trend is catching on. The pandemic made businesses and consumers alike far more comfortable with online shopping and social media is a natural expansion.
The Tik Tok/Shopify partnership in late-summer 2021 is an indication of where major industry players see the market going. As social media platforms become more and more engaging, retailers that take advantage of the authentic and organic forms of advertising on those apps can reap the benefits of social commerce.
Furthermore, to fully round out a seamless omnichannel presence and maximize online sales potential, retailers will need to fully integrate their social media presence with their storefronts.
Free and Fast Shipping
For better or worse, instant gratification is part of our world. And leading online retailers such as Amazon Inc. have embraced this trend fully, much to their advantage.
Whether it’s with same-day or next-day shipping, consumers have come to expect their online purchases to appear on their front porch almost immediately after they close their browser. In fact, with online shopping, much of the customer experience comes down to how quickly they can get their hands on that online order. But speed isn’t the only variable.
For years now, part of Amazon Inc.’s business model has been to offer free shipping to its paying members. Just as consumers have come to expect fast shipping, so too have they come to expect free shipping.
Needless to say, not every retailer has the logistical infrastructure that permits Amazon Inc. or Walmart Canada to offer that level of convenience to its customers. Not to mention, their deep pockets and steady revenue stream from paying members. However, even small and local retailers can take advantage of new technologies in inventory management and “last-mile shipping” to reduce shipping costs and time.
Welcome to the Matrix: AR and VR
If the lightning speed of technological advancement has you feeling a little like Alice falling down a rabbit hole, then… brace for impact. The future is here. Augmented reality, virtual reality, and artificial intelligence are, perhaps, the newest additions to retail technology but they’re quickly becoming the norm.
Part of the challenge with online shopping in the olden days—and by olden, we mean, like, 5minutes ago—was the inability to interact with the product on the screen. Retail shoppers couldn’t picture that perfect sofa in their living room or try on that cashmere sweater to make sure they got just the right size. Increasingly, however, that’s becoming less and less of a problem.
Whether it’s furniture in IKEA Place or makeup in Sephora Virtual Artist, augmented and virtual reality are tools that permit customers to try out or try on items just like they would in-store. In the case of IKEA Place, AR and VR tools even offer greater functionality than in-person shopping would.
Developing AR and VR tools can definitely get expensive—complex apps can easily cost upwards of $200,000 in development. And that’s saying nothing of maintenance. For large retailers, however, the investment is more than worth it. Allowing customers to interact with virtual representations of products can cut down on the cost of displays and samples and reduce returns and exchanges.
Online Stores Go Brick-and-Mortar Retro
If 2022 is starting to sound too much like an Orwellian nightmare or digital doomsday, this trend will put your concerns to bed. Online retailers are yearning for real estate. Even Amazon Inc.—the digital dynamo—hasn’t been able to resist the benefits of brick-and-mortar and has been opening up physical stores.
In 2020 and 2021, consumers took to click-and-collect or curbside pick-up like ducks to water. Or, more accurately, like eager shoppers to a brilliant innovation. It’s not entirely surprising then that, as traditional retailers moved more into the digital space, digital retailers moved more into the traditional space.
Further integration of the online with the only-in-store will be a major key to success in 2022.
Retail Experiences Lead the Way
Some trends never really die down. They just get more important. Such as when it comes to crafting a killer retail experience.
With pandemic fatigue in full swing and an end in sight for pandemic-related restrictions in many jurisdictions, consumers are ready to get back to life as normal. Only, they want it to be bigger and better than ever before. Consumer spending on intangible “experiences” rather than on material goods has been on the up and consumers aren’t showing any signs that it’ll go down.
While it might seem like the travel or entertainment industries have cornered the consumer “experience”, retailers are masters at creating memorable shopping excursions. Now, more so than ever, it’s important for retailers to capitalize on this pre-existing skill.
The Reset Team has some tips on how you can make the most of the shopping experience in 2022
Retailers have survived—and thrived—more than a few challenges in the past couple of years and 2022 definitely won’t be a cakewalk either. But retailers who read the waters—or, this blog—will have a better understanding of how to navigate the seas ahead, regardless of what they bring. Krakens and other sea monsters notwithstanding.
However you choose to chart your course ahead, The Reset Team would love to be part of your crew. Learn more about our expert team and how we can help you sail the retail seas.