The Retail Landscape in 2022: What’s in Store?

Consumer shopping habits have changed drastically in the past two years. Retailers from all business environments transformed to accommodate fluctuating customer expectations. The adoption of retail tech has also increased among brands to not only survive but thrive during these uncertain times. As the year comes to a close, what key retail trends are expected in 2022?  

Shifting Consumer Priorities and Habits 

Customer personalization 

According to Gregory Ng, CEO of Brooks Bell, today’s customers want to connect with their favorite brands smoothly on their own time. As more retailers provide an omnichannel experience, customers expect to receive quick, responsive, and personalized engagements throughout their buying journey. Several initiatives brands have taken include offering personalized product recommendations based on previous purchases, designing quizzes to ensure the product is tailored to individual customer needs, and gifting customers coupons during their birthday month. Whether retailers have a presence online, in-store, or both, a personalized shopping experience yields positive results. A study by Boston Consulting Group found that customers who experienced high personalization were 110% more likely to add more items to their carts and gave higher net promoter scores.  

Sustainability

Results from PwC’s December 2021 Global Consumer Insights Pulse Survey shed light on the increasing influence of sustainability on purchasing decisions. Consumers have become more eco-friendly compared to six months ago, and 51% of respondents take sustainability into consideration when buying a product, alongside pricing and convenience. Retailers are responding accordingly, introducing greener products, processes, and services. At Systembolaget, more organic products in climate-smart packaging are on their shelves due to customer demand. “It is about designing your channel and products in the most sustainable way and thinking it through from start to finish,” says Systembolaget CEO, Magdalena Gerger. A growing number of companies, from fashion to furniture, are also embracing the circular economy to reduce waste and extend product lifecycles.  

Smartphone shopping

Smartphones have made the online shopping experience seamless, accessible, and convenient. In PwC’s December 2021 Global Consumer Insights Pulse Survey, 41% of respondents state that they shop daily or weekly on their smartphones. For e-commerce sites and retailers, websites and apps are their shopfronts and they need to be mobile-friendly to boost sales and engagement. As smartphone usage is high among consumers, retailers must rewire their marketing efforts for the highest visibility in a mobile environment.  

Rethinking Retail Marketing Strategies 

An optichannel approach

Retailers who want to elevate customer experience levels should consider an optichannel strategy. By enhancing existing omnichannel marketing with statistics and user insights, retailers have a strong framework to improve automation, resource allocation, and communication with customers. The transformation from omnichannel to optichannel can be made possible with immediate steps such as mapping out customer journeys, quickening social media response time, and repurposing content.  

Customer data utilization

The more consumer data retailers collect, the better it is for business. But where should brands draw the line? Data privacy and protection must always be a priority for retailers and they need to strike a balance between collecting the data needed and making customers feel safe. However, finding this balance may be challenging with Google’s decision to end third-party cookies by 2023 and Apple’s new privacy policies. Retailers will now have to find creative ways to collect and leverage first-party data for marketing purposes.  

2022 Technology Trends in Retail 

AR and VR 

Augmented and virtual reality technologies provided solutions to create in-person shopping experiences during a time when customers preferred not to leave their homes. Fashion and beauty retailers were quick to adopt AR and VR, allowing customers to virtually try on their products before buying. Earlier this year, H&Mbeyond announced their collaboration with NeXR Technologies to develop a virtual fitting room. A personal avatar of a customer is created with the help of body scanning, giving them the freedom to adorn their avatars in different outfit combinations on an app before committing to a purchase. Virtual fitting rooms have the potential to increase online conversion rates and reduce returns. 

Sensor technology

The ubiquity of smartphones has paved the way for sensor technology in retail. This technology is a game changer for physical retailers where consumer data collection is slower than their e-commerce competitors. With sensor technology, physical retailers can gain valuable customer information to enhance experiences and improve marketing efforts. For instance, scan & go apps allow customers to purchase and pay for items on their mobile phones, making their shopping trips fast and secure. Retailers can also install sensor technology inside store floors to track customer paths and determine the most-visited aisles and shelves.  

Headless commerce  

This system gives brands the flexibility to build composable and customizable applications to fulfill their customers’ needs. Companies that embrace headless commerce can launch and optimize new updates quickly as the front-end and back-end of an application are separated. Furthermore, headless commerce ensures the compatibility of a brand’s website across all viewing formats and devices. Even without a huge budget and experienced development teams, companies can utilize these headless commerce solutions to modernize their shopping platforms.

As the retail and e-commerce space gets more crowded, brands have to consistently find innovative ways to stand out and remain profitable. Leveraging the right technology and strengthening customer relationships are the building blocks for a resilient and sustainable retail business.