2021 has certainly been pivotal for many industries. With technology advancing exponentially, ESG at the forefront of boardroom agendas and COVID-19 still impacting consumer behaviour, companies are having to adapt, shift, transform and innovate in order to serve new customer needs and trends. As we come to the end of the year, many are wondering whether 2022 will hold more of the same, or whether we’ll see any new, seismic shifts. So, we’ve asked our Partner team to share their thoughts.
For the Retail industry, we’ve asked one of our experts, Hermann Behrens, to share his insights on what we’re likely to see in the year ahead. What new trends will emerge? What is going to shift? Find Hermann’s thoughts below:
Consumer expectations of online delivery times and the ease of returns have shifted. This, of course, prevails as Amazon prime continues to set the bar. People know what is possible; they have seen it and experienced it. With immediate gratification becoming the norm, customers seek online purchases that bring them instant results. They would rather search than compromise. Expectations will continue to amplify, and this will bring even more pressure to retailers that haven’t yet adapted to meet these expections. The continued shift to online will further accelerate the retail consolidation of store real estate, with a greater focus on distinct offerings and experiences to create brand affinity, while also delivering commercially.
If the medical industry has managed to shift patients online, it’s hard to imagine why people wouldn’t shift their shopping to the virtual environment. Here, an assistant works with customers to explore the merchandise and make purchases. One third of retailers are going to invest in livestream shopping in the next 12 months, with a high percentage considering VR shopping. Virtual shopping presents brands with the opportunity to bring the physical world and experience to the digital world, shifting the personal touch and service we expect in stores to the online buying experience.
Less is more
Waste reduction will move from being notional to more mainstream, as consumer demand for change increases and more businesses realise the need for change. The key question is: will consumers respond to a lack of sustainable practices with their dollars to drive change? The biggest irony is the fact our increasing demand for online convenience has significantly increased the retail carbon footprint, as products are delivered with huge amounts of packaging. And we all know where that goes.
Retailers focused on waste reduction as a core proposition will continue to emerge. For example, peer-to-peer (P2P) trading of second-hand clothing and the use of recycled and biodegradable materials. The speed with which we see the move to circular economy processes will depend on significant investment and commitment from all players, including retailers, if we are going see any significant change. Fundamentally, ESG practices will need to shift from being a page in the annual report, to a key business driver of value and future commercial return.
Luxury on loan
The regrowth of the retail rental market has had mixed commercial success, but consumer appetite shows there is room to grow in this space. We will continue to see the move to rental, particularly for luxury goods, to broader audiences. Luxury brands will tread the fine line between making their products more accessible, while retaining their luxury positioning, esteem and prestige. We will see brands shifting from pure sale of goods, to broader luxury product experiences that people can experience on a short-term basis, or through longer term commitments to membership propositions.
Retail in the metaverse
The metaverse is a new reality, just pop into your 10 years old’s world for a day and you will no longer be in denial. We will see an increasing number of young people placing far more value on what they experience and possess in the metaverse than physical everyday goods. Beyond living in gaming environments, innovation in the metaverse space will lead us to an entirely new shopping landscape. The metaverse could place the consumer into the full experience of their product. You’ll no longer have to imagine climbing Machu Picchu when you try on hiking boots – you’re already there. Businesses will need to plan for how their physical spaces are now used, how best to enhance the metaverse experience and how it will change the way we shop.
We can help you navigate and exploit these opportunities. Get in touch today to talk to one of our experts.