Retail Trends in 2022 – What Can We Learn From 2021?

After a year of pandemic-induced upheaval, things are slowly picking up for the retailers around the world as they learn to seize new opportunities and adapt to what we now call the “new normal”. That being said, shifts in consumer behavior and changes in logistics capacities will likely persist in the years ahead, despite the widespread vaccine rollouts and gradual opening of brick-and-mortar stores. 

Amidst these uncertainties, what are some of the key learnings from 2021 that will allow retailers to emerge even stronger in 2022? Here’s a list of the top industry trends from 2021 that all retailers should take note of.

#1: Rise of Social Commerce in Retail 

While social commerce — the process of purchasing products and services online through social media platforms — has been around for quite some time, only recently has it been fully embraced by retailers and consumers alike. According to a recent report by eMarketer, U.S. retail social commerce sales are projected to surpass $36 billion by the end of 2021, which is about 35% more than in 2020. 

This surge in popularity of social commerce does not come as a surprise, especially given the pandemic-driven e-commerce boom that has prompted users to become increasingly comfortable with buying from online retailers. This has made lots of retailers realize how essential it is to build a website that’s user-friendly and informative as well. On the other hand, lots of people have started buying using social media. This has also in turn encouraged more and more brands to leverage social media checkout, in-app purchases, and shopping integrations to boost their retail sales. One notable development in this field would be the Tik Tok-Shopify collaboration, which serves as an extension of Snapchat native checkout feature to selected influencer brands.

“The idea here is that a user will eventually be able to do all their shopping within Facebook or Instagram, limiting any requirements for direct site traffic. ”

– Avi Ben-Zvi, Group Director of Paid Social at Tinuiti.

Social commerce will become an even more integral part of retail e-commerce as we move into 2022. However, as much as social commerce has the potential to create seamless omnichannel retail experiences for users and connect retailers with new audiences through social media platforms, brands can only succeed if they have a clear strategy and utilise the right channels to reach out to their target audience.

#2: Same-to-Next-Day Delivery from Retailers

In the age of instant gratification, consumers long for immediacy and expect same-day delivery as a standard service. As a matter of fact, 41% of surveyed shoppers indicated their willingness to pay a small charge for same-day delivery while 24% of the same group admitted that they would not mind paying slightly more to get their packages even faster within a one or two-hour window of their choosing. 

To cope with the increased consumer demand for hyperlocal delivery options, 2021 has seen many big retailers ramping up efforts in expanding their delivery fleets. Sephora, for instance, launched a new same-day delivery service just in time for the upcoming holiday season. This gives customers the choice to receive their items within a few hours of their purchase for a flat fee of $6.95. As of this day, 38% of the top 50 retailers in Europe are offering next-day delivery and 13% are already offering same-day delivery. We believe that more will follow suit as order fulfillment technology and standards continue to evolve in the coming year. 

Needless to say, there are bound to be some challenges when it comes to retailers trying to provide same-day delivery service, one of them being inefficient dispatching and routing. The good news is that most of them can be easily overcome with the right technology partners.

#3: Shopping Experiences Powered by Augmented Reality

Last but not least, Augmented Reality (AR) applications have become commonplace in the retail industry, with more and more retailers investing in Artificial Intelligence (AI) to enhance the customer experience as well as decrease costs. Once a nice-to-have feature, AR has now become an essential part of retailers’ e-commerce offerings; the virtual “try-before-you-buy” experiences proved especially useful in the first half of the pandemic when customers had to rely solely on online shopping to make their purchases. 

In May last year, U.S. retail chain Kohl’s partnered with Snapchat to develop Kohl’s AR Virtual Closet, which lets users try on their favorite pieces before making a purchase without ever leaving the app (or their homes). Today, AR-powered commerce is no longer reserved for mega-brands like IKEA and Target as small-to-medium retailers are now able to similarly customize immersive shopping experiences with toolkits such as Shopify’s AR.

With many retailers feeling the pressure to make deep investments into AR capabilities, it is important to consider some key principles before diving right in: 

1. Understanding the needs of your consumers and then deciding on the context (at home, in-store or on the go) in which they would benefit the most from an augmented shopping experience; 

2. Focusing on a discrete, measurable use case before scaling up; and 

3. Choosing your delivery platform of the AR applications wisely (a phone-based app vs WebAR applications on the web with no downloads required).

Looking Forward

Adaptation is key to survival in an industry as fast-paced as retail. Solutions like a personal checkout assistant, are giving customers a wide variety of options to make purchases. Retailers must constantly review their offerings to ensure that their services are aligned with the shifting realities and emerging consumer needs.

With so many innovative breakthroughs on the horizon, we are excited to see what 2022 has in store for the world of retail.

Which retail trends are you looking forward to the most in 2022?

For more exclusive reports, insights, and interviews on the latest updates in e-commerce and logistics, follow us on LinkedIn or join our community as a member.