By Alexis Damen
The pandemic forced the retail industry to quickly adapt in 2020, and these changes continued through 2021. More brick-and-mortar businesses opened an online storefront, click-and-collect order fulfillment options gained popularity, and consumers grew to expect a completely connected (and convenient) experience, regardless of the sales channel they were using.
These retail trends are here to stay, but as vaccination rates increase and parts of the world are reopening, consumers are getting more comfortable with shopping in person again.
To succeed in the future of retail, you need to enhance your omnichannel strategy, offer memorable in-store experiences, and train store staff on emerging technology to ensure a consistent shopping experience across all channels, online and offline.
Here’s an overview of retail trends to help you succeed in 2022 and beyond.
Retail Trends in 2022
- Competition in physical retail will increase as digitally native brands expand into brick-and-mortar
- Experiential retail continues to grow in importance
- Brands are using AR shopping experiences to boost conversions
- Retailers must focus on the new omnichannel shopping standard
- Showrooming is increasingly popular among retailers
- Retailers need to reimagine the store staff role to find and retain employees
- Consumers continue to be increasingly conscious
- Customer loyalty is more important than ever
- Consumers expect fast, free, and on-time delivery
- Building community is more important than personalization
- Retailers must continue to innovate the payment experience
Let’s look at these in detail.
STEP 1 – Competition in physical retail will increase as digitally native brands expand into brick-and-mortar
Shoppers are ready to get back out there to fulfill their retail therapy cravings, and with historically high retail vacancy rates and shorter, less expensive, and more flexible lease terms, digitally native brands are more eager to test the world of physical retail. According to a commissioned Forrester Consulting study conducted on behalf of Shopify, 35 percent of brands surveyed expect rising digital customer acquisition costs to be a top challenge in the next year.
Whether it’s a pop-up shop, shopping event, or short-term commercial lease, testing physical retail is a great way to reach a growing segment of consumers who prefers to shop in person.
In the United States, 81 percent of Gen Z consumers prefer to shop and discover new products in store, and more than 50 percent use in-store browsing as a way to disconnect from the digital world.
Dipping your toes in physical retail is also a great way to see if opening a permanent brick-and-mortar location is the right move for your business.
But a more crowded physical retail space means increased competition, and you’ll need to come up with strategies to succeed. We’ll cover a few of them in this article, but we recommend reading our Future of Retail Report for an in depth overview. The massive changes that 2020 brought to the retail industry are here to stay. And now that parts of the world are opening up, and consumers are craving opportunities to shop in person, they expect the buying experience to be consistent both online and off. Download this report to learn about the retail trends, insights, and advice you need to succeed in 2022.
STEP 2 – Experiential retail continues to grow in importance
As competition in physical retail increases, experiential retail is a way for you to differentiate your store. Create unique and memorable in-store experiences by focusing on community, events, and your prospective and existing customers’ interests. This way, instead of only aiming to increase sales revenue, you’ll also deliver enjoyable experiences that build brand affinity.
Let’s say you sell sustainably made cookware. You could create a community-building opportunity and bring customers in-store by hosting a mix-and-mingle experience with other businesses that create products for the same or a similar audience. For example, you could invite a chef, a tableware brand, a local farmer, and a brand that makes 100 percent natural sauces or seasoning to participate in the event.
All the brands involved can display their products, so while shoppers are experiencing how great they are, they can also make a purchase.
Depending on the POS system used at your store, you can review your customer profiles to get an overview of purchase history and interests that can help inform your strategy to create the in-store experiences your customers are looking for.
STEP 3 – Brands are using AR shopping experiences to boost conversions
According to a commissioned Forrester Consulting study conducted on behalf of Shopify, over one-third of brands say in the next year they’ll invest in using augmented reality (AR) to help shoppers visualize how the products they sell fit into customers’ lives.
During the pandemic, shoppers began to shop online more, and some larger retailers like Sephora and Rebecca Minkoff used AR technology to connect their digital and physical storefronts. But leveraging AR to improve the customer experience should be possible for all retailers, no matter the size. That’s why we created Shopify AR to help you create immersive shopping experiences. And it works.
Interactions with products having AR content showed a 94 percent higher conversion rate than interactions with products having no AR.
Level up your customer experience and make sure it’s consistent across channels with interactivity and digital immersion from augmented reality (AR), virtual reality, and 3D media.
STEP 4 – Retailers must focus on the new omnichannel shopping standard
In the same way that digitally native brands are moving into physical retail to reach more customers, brick-and-mortar stores also need to figure out how to make their online and offline channels work together to deliver a completely connected customer experience. That’s why many retailers are planning to increase their investment in digital channels to drive sales over the next 12 months. According to a commissioned Forrester Consulting study conducted on behalf of Shopify:
- 49 percent of retailers say they’ll spend more on their company-owned online store as well as social selling
- 46 percent of retailers say they’ll increase investment in their owned custom mobile app
- 44 percent of retailers say they’ll increase their investment in livestream selling
- Investing in tools and technology to unify all your sales channels is vital to stay competitive.
This includes technology to help you:
- Offer more order fulfillment options
- Facilitate virtual shopping
- Activate live chat
- And enable contactless checkout with QR codes.
- Offer more order fulfillment options
Some customers want to check out online but return products to a physical store, or browse in-store and buy online. According to a commissioned Forrester Consulting study conducted on behalf of Shopify, for 47 percent of consumers, these factors have a significant influence on their purchase decisions.
Give shoppers more flexibility by offering more order fulfillment options such as buy online, pickup in-store (BOPIS), curbside pickup, and click and collect. Use an app like Zapiet to let your customers select a pickup or delivery date while making sure inventory is available.
Facilitate virtual shopping
Virtual shopping apps like HERO are pandemic-proof. Shoppers can instantly connect with a store employee who’s working from home, in-store, or at a head office, via chat, text, or video. During these real-time conversations, store staff can provide tailored product recommendations, and customers can virtually try on products, ask questions, and browse your store online.
Activate live chat
According to a commissioned Forrester Consulting study conducted on behalf of Shopify, forty-two percent of consumers say they’re likely to use live chat in the next year, making it an important channel for retailers in 2022 and beyond.
Add a live chat feature to your website so shoppers can instantly contact you or your staff with questions while they browse online. Answering questions quickly and giving shoppers the same level of service they’d experience in-store will help improve the customer experience and your conversion rate. You can use Shopify Inbox to activate live chat on your eCommerce website.
Enable contactless checkout with QR codes
During the pandemic, QR codes gained popularity in retail. According to a commissioned Forrester Consulting study conducted on behalf of Shopify, in the past year, 20 percent of consumers have used QR codes in-store to add products to their shopping cart and check out later online, and 33 percent of shoppers say they’re likely to use QR codes in the same way over the next year.
Shopify’s Shopcodes app is an easy way to generate QR codes. Place them on product price tags to direct shoppers to product pages on your website or let them buy items in-store and have them shipped to their home address.
STEP 5 – Showrooming is increasingly popular among retailers
According to a commissioned Forrester Consulting study conducted on behalf of Shopify, 46 percent of brands say they’re investing in showrooming over the next year to improve the in-store customer experience. Showrooming lets customers touch, feel, and try your products in person and complete their purchase online later. Turning your retail store into a showroom has many advantages:
Easier inventory management
With showrooming, customers usually complete their purchase online, which means you can stock less inventory on your retail sales floor. This creates more space for experiential moments and engaging with customers. Depending on your space, you can either keep the bulk of your inventory in the stock room or in a warehouse.
Requires a smaller retail space
If you’re not displaying multiple units of the same products on your sales floor, you’ll likely need less floor space and can opt for a smaller store. This can help reduce your operating expenses or make it possible to afford a smaller commercial space in a more desirable location with higher foot traffic.
Provides cross selling and upselling opportunities
With showrooming, you’ll have the opportunity to spend more time with each customer who visits your retail store (also known as clienteling), giving you more opportunities to cross-sell and upsell products. Also, depending on your POS, this one-on-one time will give you more chances to make personalized recommendations based on customer profiles and buying history.
GET STARTED: Want to support showrooming at your retail store? Use Shopify POS email carts to add items to customers’ cart, send their wishlist by email, and help them buy online whenever it’s convenient for them.
STEP 6 – Retailers need to reimagine the store staff role to find and retain employees
According to a commissioned Forrester Consulting study conducted on behalf of Shopify, 49 percent of brands say hiring and retaining employees will likely be a top challenge in the next year, and it’s something 40 percent of brands are striving to improve. This isn’t surprising considering employees at major retailers have been quitting, striking, and publicly expressing their unhappiness with the industry.
In the United States, job openings have hit record highs, and in the United Kingdom, employers are facing the worst shortage of job candidates on record.
The pandemic accelerated the evolution of the store associate’s role from an entry level position to “experience hosts” who manage shopping channels such as live chat, virtual shopping, appointment shopping, and a new range of order fulfillment options. If you don’t provide training, growth opportunities, and compensation to match their new role, you’ll have a hard time keeping employees, which could damage your reputation with customers.
Happy and engaged employees lead to happy and loyal customers. But how can you achieve this?
STEP 7 – Consumers continue to be increasingly conscious
Ethics, values, and transparency are increasingly important to shoppers. In fact, 83 percent of millennials want brands to align with their values. And according to Forrester, 68 percent of US consumers say a brand’s social responsibility reputation has at least some influence on their purchasing decisions, while 48 percent of US consumers prefer to buy from a brand associated with social, political, or environmental ideals.
Offering transparency into your business practices and employee treatment, and sharing your viewpoint on political, social, or environmental issues can help foster trust in your brand and increase customer loyalty and advocacy.
STEP 8 – Customer loyalty is more important than ever
According to McKinsey, 75 percent of consumers globally have changed brands at least once during the pandemic, and value, quality, and brand purpose are among the top reasons for trying a new brand. In the same study, McKinsey also reports, when it comes to physical retail, convenience, value, and availability are the top reasons globally for shopping at a new retailer.
While convenience remains a top retail trend, we can see that value is equally important to boost customer loyalty and retention. Value refers to the quality and price of your products as well as the values your business stands for. According to a commissioned Forrester Consulting study conducted on behalf of Shopify, in the next year, 58 percent of brands say they’re improving the quality of existing products and 53 percent are creating products that align with their company values.
STEP 9 – Consumers expect fast, free, and on-time delivery
Free and fast delivery has a significant impact on purchasing decisions.
According to a commissioned Forrester Consulting study conducted on behalf of Shopify:
- 75 percent of global shoppers want free shipping, while 58 percent of consumers expect free next-day delivery.
- 68 percent of shoppers also want to know the estimated delivery date upfront, something they find valuable when making purchasing decisions.
- 49 percent of brands are investing in being transparent with not only their delivery practices but also their delivery promises (i.e., the date the order will be delivered).
PRO TIP: Want to speed up last mile delivery? Try setting up local pickup and local delivery in Shopify to give customers more order fulfillment options while speeding up last-mile delivery times.
STEP 10 – Building community is more important than personalization
Brand communities have become increasingly popular over the last few years, and for a good reason — communities increase customer retention and brand awareness, and decrease customer support costs.
And using personalization to retain customers isn’t the best way forward. According to a commissioned Forrester Consulting study conducted on behalf of Shopify, 60 percent of consumers are increasingly concerned with how brands are using their personal information.
In fact, consumers are over three times more likely to abandon brands that “over-personalize,” compared to brands that fail to personalize enough. Customized communication that includes too much personalized data makes consumers feel like you’re stalking them.
But you can still generate customer loyalty and data through community. Accessing customer data is highly dependent on trust, that’s why brands plan to invest more in connecting with shoppers to increase customer acquisition and retention. According to a commissioned Forrester Consulting study conducted on behalf of Shopify, 40 percent of retailers are investing in creating more opportunities for customers to directly interact with their brand — including building community.
STEP 11 – Retailers must continue to innovate the payment experience
According to a commissioned Forrester Consulting study conducted on behalf of Shopify, in the next year, 58 percent of retailers plan to offer more payment methods, 48 percent plan to offer buy now, pay later solutions to customers, and 38 percent are investing in enabling one-click checkout.
With payment methods like buy now, pay later (BNPL) becoming one of the most popular financing options preferred by customers, retailers must continue to innovate the payment experience, whether it’s in-store or online. But this isn’t limited to financing options.
According to a commissioned Forrester Consulting study conducted on behalf of Shopify, in the last year, nearly one-third of shoppers abandoned their purchase because they couldn’t use their preferred payment method. It’s crucial to offer a wide range of payment methods, including local payment methods or local currencies, and make the checkout process as frictionless as possible.
It’s your turn to implement a few of these retail trends
Now that you know what retail trends are in store for 2022, it’s time to put them to work. Diving deeper into all the trends we listed above is impossible, but you can pick a few that apply most to your business and go from there. And if you’re not sure how to get started, check out our Future of Commerce report for recommendations to implement these retail trends.
Alexis Damen is a Shopify merchant turned digital marketer who specializes in content marketing and writing for SaaS and D2C eCommerce companies.