Retail Trends That will Affect 2022 and Further.

COVID-19 has been the most significant factor affecting retail trends in 2021 which carried on from 2020 and will most likely carry on into the new year, 2022. While some of the retail trends cannot be due to COVID, it has accelerated many of them. A perfect example of this is the shift into online shopping, even though there was a shift in that direction anyhow.

In this post, we will look at some retail trends and how they could move in the future. Below are some of the trends I believe will carry into 2022

1: Threat of Ongoing Shop Closures.

As you may have seen over the last few years, there have been a huge amount of shops closing. This started long before COVID with the rise of the internet and all the new features for online shopping and also the huge rise of Amazon over the years. However, since the pandemic started and the whole world has had multiple lockdowns forcing many shops to close and move into the e-commerce space. COVID accelerated the movement.

Even though, especially here in the UK, that life has someone returned to 'normal' post-COVID, the trend of shops closing is unlikely to reverse. It will be slowed down as there aren't any restrictions or lockdowns in place. I do think that there will be more shop closures to come.

2: Move Towards Online Shopping.

As shops have been closing the counter point to that is many businesses are moving into the ecommerce space. According to the Office of National Statistics (ONS) over the past five years the percentage of online retail sales has increased, quite dramatically over the last two years.

Last year at Christmas time, around 5.7 million households shopped online for Christmas groceries. Tesco's online grocery sales reached more than £1 billion during the 19-week Christmas shopping period. Sainsburys also saw a huge increase in growth for online grocery sales reported at 128% over the Christmas Period.

As lockdown restrictions have eased and the world opens up to a certain degree, there has been and will be some more rebalancing in the number of people claiming to us online shopping predominantly. 16% of people expect to shop mostly online in a year's time, which is 6% higher than it was before the pandemic started but it is a decrease by 8% compared to today.

As many retailers have now adopted a digital-first approach, and placing their focus on their online stores instead of physical locations. Over the years to come and especially 2022 retailers will be heavily investing in digital technology and some have built online-only warehouses.

4: Free Shipping and Speedy Delivery.

Consumers expectation are clashing with the realities of COVID at the moment. As consumers are doing more of their shopping online, yet they still want access to their purchases as possible. Speedy deliveries are expected and big online players, like Amazon, have put so much effort into expediting this.

Unfortunately, there has been a colossal shipping crisis due to COVID, with delivery delays happening across the globe. As lockdowns are becoming less and less, there should be some improvement in logistics and those average delivery times will come back down again.

Online shoppers can be deterred from buying anything if there isn't any free shipping. Roughly 90% of consumers say they would shop online more often if free shipping was an option, and around 24% of online shoppers would spend more to qualify for free shipping. Those retailers that offer free shipping have a higher conversion rate of around 20% and those retailers who do not offer it.

5: 'At Home' Economy Growth.

While the pandemic has been going on, the 'at home' economy has started and grown a lot. It seems to be staying put even though restrictions have been loosened. This trend shows that consumers have shifted their priorities into areas such as home cooking, online shopping and digital products. Fewer people are now working from home than a year ago, but a lot of people have found that they prefer to work at home and are choosing hybrid working options or staying at home full time to work instead. Going into 2022 people may still prefer to work at home or have hybrid working options, and continue to do their shopping online instead of going to physical shop locations.

6: Retailers Discover the Advantages of AI.

Retailers are now incorporating Artificial Intelligence into their operations. It did take some time for the internet of things to make it to reality, but now in 2021 its commonplace. Within the retail industry typically uses AI for inventory management, dynamic outreach, interactive chat, guided discovery, adaptive homepage, visual curation, conversational support, customer engagement, and there are more.

Many retailers use AI for personalised shopping experiences, and one obvious application for AI is chatbots. There are estimates that roughly 91% of internet users have interacted with chatbots daily.

6: Seniors Finally Uptake New Technology.

Traditionally seniors are usually the last group of people to take on any type of new technology. The have spent a lot of their life without technology and they usually don't like change over the final years. But the pandemic came along and they had to adapt to staying at home because they were most at risk from COVID. During this time many seniors have been forced to accept the new retail technologies, like online shopping and telehealth consultations. Some seniors have take to using some smart home devices and assistant technology to avoid nursing homes. Even though economies are opening up this trend is less likely to go back on itself, so it would be interesting to see how this trend influences online shopping.

7: Increase in Social Commerce on Instagram.

Instagram shopping was a feature that was added to Instagram, one of the biggest social media platforms, which allows users to make purchases directly from the app. It was ground breaking. Instagram is the most advanced social network for social commerce. Retailers can make their products easily discoverable on Instagram, you're able to tell your story and highlight your products. It's great because consumers can shop at the moment a product they like is found, pushing them through the purchasing journey.

Social commerce allows retailers to customise and personalise the shopping experience for their consumers. For example, a checkout on Instagram will allow retailers to give their customers the all-in-one experience. This would allow brands to interact with customers, set personalised discounts, and gain important feedback and sell their product all without the customer leaving the Instagram app. Over the next few years Instagram shopping will most likely add new features to make the selling of products more seamless experience for consumers and users.

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It will be interesting to see they way retail marketing shifts over the next year as we are moving into the post-COVID world. The trends above will be taking the retail industry into the digital world and I expect that with Metaverse on the horizon and many companies gearing up for it and working towards it, it will be interesting to see what impact that will have on retail marketing trends going forward.

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