There is clear evidence consumers have been driven to change their purchasing habits in terms of what they buy, how they expect to be served, and how they want to pay.
The recent in-depth 2021 MasterCard “Top Retail Trends To Watch In 2022” report detailed what many of us are already seeing: despite the opening up of more in-person retail options in 2021, consumers are still doing a large share of their purchasing through digital channels. “And much of the growth in digital commerce is expected to stick for the long term,” says the MasterCard report. “That means the pandemic-induced shift to digital is moving to a new phase of digital innovation, especially as the line between online and in-person continues to blur.”
There has been ample evidence of a big shift in aftermarket e-tailing, though it is much more pronounced in the U.S. than in Canada. Across all industries, no sector has been left untouched.
And while each segment, from grocery to hardware and the aftermarket – where everything from more conventional service items to big moves in the DIY custom and accessories segment – has its nuance, the big trends in retail run across the entire retail landscape. Here are some of the key trends detailed.
Shoppers head to a different type of market
Brick-and-mortar stores offer their e-retail platform to third-party sellers. Walmart, which launched its online marketplace in 2009, is one such example. The company’s gross merchandise value sales more than doubled in 2020, with sales hitting triple-digit growth, surpassing the company’s own e-commerce business.
Changing consumers remain a constant
As Covid sent consumers running to digital channels for everything from toilet paper to art classes, it also forced retailers to pay closer attention to solving consumer challenges in new ways. The pressure on retailers has intensified because of a growing willingness by shoppers to try new brands and even new categories, where they traditionally have not made purchases before.
For retailers, this means an unprecedented need for more data and insights on changing consumer preferences and needs in 2022. Consumer insights can help retailers continue innovation in new programs and strategies that can sustain as things stabilize.
Supply chain challenges started at the beginning of 2021 and will likely spill over into 2022. Mobility restrictions and government stimulus funds boosted consumer savings. In the absence of available services, demand for goods spiked dramatically – in fact, faster than at any time in history.
As the demand and flow of goods normalize, supply tensions may ease and price pressures could fade by mid-2022.
Methods of Payment
A 2021 Mastercard survey across 18 worldwide markets found that the adoption of new payment technologies is rising, and consumer appetite for fresh, fast and flexible digital experiences continues to grow. In the survey, 93% of consumers said they are considering emerging payments such as biometrics, digital currencies and QR codes in addition to contactless.
Now, nearly 90% of in-person transactions globally occur at a contactless-enabled merchant.
Consumers now expect businesses to provide multiple ways to shop and pay. More than half of consumers say they would avoid businesses that do not accept electronic payments of any kind. As we move into 2022, companies that can provide multiple ways to shop and pay will be best positioned to meet these consumer expectations.
Interactive and on-your-own
Retailers will increasingly look to distribution or fulfillment centres to get goods to consumers quicker and more efficiently in 2022. The 25 largest U.S. retailers acquired about 38 million rentable square feet in new industrial space last year, up from 18.8 million square feet the previous year, according to commercial-real-estate data provider CoStar Group Inc. That is the highest total for at least the past 10 years.
Many retailers accommodate various shoppers by operating as fulfillment centres with distribution hubs for e-commerce marketplaces. The approach offers consumers a wide variety of merchandising to meet their needs, and includes the convenience of pickup to satisfy their lifestyles.
Other retailers cater to leisurely shoppers by establishing experiential stores that straddle interactive showrooms and immersive commerce websites.
Retailers are also reimagining their storefronts – with self-service kiosks and unattended stores. For example, RiteAid, Dunkin’ and Circle K in the U.S., and Couche-Tard in Canada, have launched concept stores in the last three years.
Touch-free stores bridge the physical and digital to streamline the overall experience, including stores that eliminate wait times at the checkout and allow shoppers to pay using secure payments. It also gives consumers access to stores outside of normal opening hours, if selected by the retailer, in addition to unique and exclusive merchandise.
A host of other larger trends, such as the increasing emphasis on privacy and cybersecurity, will also shape the retail landscape. But on the whole, near-term trends as outlined in the report indicate a massive acceleration in digital transformation of the retail landscape, even as brick-and-mortar transitions to a new world of in person-shopping.