By Forbes
For many in the retail industry, 2021 has been a harder year than 2020. With major shifts in consumer spending on a regular basis, and a growing fatigue with managing the impact of the pandemic, this is another year most will be happy to put in their rear-view mirror.
Looking ahead to 2022, much remains uncertain. 2021 is ending with the spectre of a rapidly spreading variant causing disruption once again.
Regardless of the uncertainty, the pandemic has continued to accelerate trends seen across the retail industry, several of which will continue to have a profound impact in 2022.
Conscious consumers and the environment
“Retailers need to evolve with the consumer to hold onto their brand relevance in 2022 and beyond… Brands need to show off their culture and purpose. Sustainability must be at the heart of their business and across the entire supply chain.” states Kyle Monk, Director of Insight & Analytics at the British Retail Consortium.
Conscious consumerism, which has been reshaping consumer behaviour for several years, is continuing to be a force to be reckoned with. From environmental concerns to a desire to see better representation in the products that are sold, the consumer in 2022 expects the businesses that they buy from to be doing better.
“Our research reveals that 90% of consumers are more concerned about sustainability than ever before,” explains Chris Biggs, Global Head of Retail for the Boston Consulting Group (BCG).
“In the UK, 41% of Brits recognised that recyclable choices and sustainable packaging influence their buying decisions, and 70% are willing to pay a price premium of 5% for sustainable products. As customers increasingly opt for eco-friendlier products, retailers have been encouraged to make sustainability a real priority.”
The onus in 2022 will be on brands and retailers not just talking about their green credentials, but convincing the customer that their efforts are genuine. Research from the Chartered Institute of Marketing shows that 63% of customer say they would like brands to be more vocal about their sustainability plans, but remain skeptical about their authenticity.
A growing awareness of the finite nature of virgin materials and the important role that the circular economy will play in minimising the environmental impact of retail has fuelled the resale market. Etsy’s purchase of Depop and Farfetch’s entry into the resale market are just two examples of how established retailers are looking to leverage this trend.
Research from ThredUp suggests that the global market for fashion resale will double to $77 billion by 2025, with growth rates expected to be 11 times that of traditional clothing retail. With a proliferation of new platforms springing up to take advantage of this trend, resale will no doubt show huge growth in 2022 in fashion, but also other areas such as homewares or electronics.
The customer in 2022 will want to see businesses be regenerative. They will expect to see thoughtful, inclusive products that meet their sustainability criteria, backed up by transparency and rigorous adherence to a code of ethics to convince them that the businesses they buy from are doing more good than harm.
Social commerce and Live Streaming
Commerce gets social – online shopping will evolve in 2022 to a more immersive, personal experience … [+] GETTY
“2022 is the year that we’ll see the social commerce model—deeply embedded commerce that meets consumers where they are and is non-disruptive to their experience—spread to more platforms and more industries,” states Amir Kabbara, Director of Product for Shopify.
After a record year for online shopping in 2021, social shopping, the fastest growing area of e-commerce, will be shaping how and where we shop in 2022. Kabbara expects to see “any platform with an audience” start to monetize that platform through “commerce and shoppable content”.
At the forefront of shoppable content is live-streaming, the ability to instantly purchase a featured product on a live-stream video. Shopify, who have partnered with TikTok to enable merchants to sell live, believe that this trend will show huge growth over the next 12 months.
“Live Streaming is already a quickly growing market, projected to reach nearly $224 billion USD by 2028. From August to October 2021, we’ve seen installs for liveselling apps increase by 40% compared to the previous three months,” explains Kabbara. He cites the technology as not just a sales channel, but an “extremely useful way for brands to connect with consumers” as “the line between shopping and entertainment blurs”.
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