The 2022 trends every retail leader needs to know about

The retail sec­tor spent the past 12 months deal­ing with the impact of Covid-19. How­ev­er, 2022 looks set to be a year of fast-mov­ing inno­va­tion. 

Bricks-and-mor­tar retail­ers spent Q1 2021 in lock­down. How­ev­er, the rest of the year felt decid­ed­ly more promis­ing – and the stats back it up. In Octo­ber 2021 alone, the UK’s retail spend­ing was up by 6.3% com­pared to the same peri­od in 2019.

“2021 has been a real mixed bag for retail­ers across the board,” says Wizz Selvey, founder of retail con­sul­tan­cy Wizz & Co. “There have been many new open­ings but a lot of clo­sures, too. 2022 will con­tin­ue to see a lot of change. Every­thing has accel­er­at­ed, and we’ll con­tin­ue to see the evo­lu­tion of retail­ers who have tak­en on the chal­lenge of the last 18 months and react­ed quick­ly to change.”

Retail­ers need to think about their phys­i­cal and their online pres­ence as one, rather than as two sep­a­rate enti­ties

Kate Orwin, UK leas­ing direc­tor at shop­ping cen­tre oper­a­tor Uni­bail-Rodam­co-West­field (URW), is also feel­ing opti­mistic. Since open­ing in April 2021, URW has wel­comed more than 40 mil­lion vis­i­tors to West­field Lon­don and West­field Strat­ford City, she notes. 

“What’s more, when peo­ple vis­it phys­i­cal retail stores, they’re com­ing with a real inten­tion to spend. Online will con­tin­ue to lead the way but offline will be even more impor­tant for brands, includ­ing dig­i­tal­ly native brands, who are look­ing to tru­ly engage with con­sumers.”

The retail sec­tor is head­ing full steam towards the future. How­ev­er, ele­ments like cus­tomer expe­ri­ence, brand loy­al­ty and the need to encour­age post-pan­dem­ic foot­fall will be as cru­cial as ever. Here are some of the most excit­ing retail trends for 2022.

Business buddies 

The past year has seen a stream of US busi­ness­es part­ner up, with one retail­er incor­po­rat­ing anoth­er into its stores for an exclu­sive cus­tomer oppor­tu­ni­ty. Tar­get is a prime exam­ple. In the last year alone, it’s brought micro-shops from Dis­ney, Apple and Ulta Beau­ty into many of its stores and extend­ed exist­ing part­ner­ships with Lego and Levi’s. 

There can be many ben­e­fits to ‘bud­dy­ing up’ and play­ing host to anoth­er care­ful­ly cho­sen busi­ness, not least because you’re dou­bling your poten­tial foot­fall by attract­ing a whole new cus­tomer base. In 2022, UK retail­ers should con­sid­er how they can tap into the trend and think about poten­tial part­ners. 

“This is a huge oppor­tu­ni­ty for retail­ers if the right part­ner­ship can be found,” says Selvey. “Both brands will be focused on cre­at­ing engag­ing con­tent, so a col­lab­o­ra­tion pro­vides an oppor­tu­ni­ty to co-cre­ate and edu­cate cus­tomers.”

Be care­ful who you approach. It could be a boost to sales “if the col­lab­o­ra­tion is made with a busi­ness that has sim­i­lar val­ues but sits in a non-com­pet­i­tive cat­e­go­ry”, Selvey notes.

This trend will be par­tic­u­lar­ly impor­tant for depart­ment stores. “They’ll want to be increas­ing dwell time by adding exclu­sive ser­vices and host­ing brand col­lab­o­ra­tions or pop-ups,” pre­dicts Selvey. “These can all act as change-mak­ers with­in big depart­ment stores and cre­ate rea­sons for shop­pers to return.”

Digital bricks

‘Dig­i­tal bricks’ refers to phys­i­cal stores with tech­nol­o­gy at their core. Orwin thinks this retail trend will rapid­ly grow in 2022, with URW research indi­cat­ing that 89% of cus­tomers are inter­est­ed in using more tech­nol­o­gy in-store. 

 “We expect to see brands that have tra­di­tion­al­ly lived offline invest­ing more than ever in new and excit­ing tech­nolo­gies to encour­age con­sumers to vis­it their spaces,” she says. “A retailer’s shop win­dow is incred­i­bly pow­er­ful in dri­ving aware­ness and loy­al­ty when com­pared to the clut­tered online mar­ket­place.”

More online brands are set to take the leap through the screen, Orwin pre­dicts, with the likes of Net­flix and Tik­Tok both open­ing phys­i­cal stores in URW shop­ping cen­tres in 2021. Amazon’s 4‑Star store opened recent­ly at West­field Lon­don,  offer­ing shop­pers a range of prod­ucts that are either best sell­ers, trend­ing on the web­site or boast a high cus­tomer rat­ing.

“Retail­ers need to think about their phys­i­cal and their online pres­ence as one, rather than as two sep­a­rate enti­ties,” says Orwin. “The line between the two is increas­ing­ly blurred in the minds of the end con­sumer. Retail­ers should also con­sid­er the pow­er, from a mar­ket­ing per­spec­tive, that a phys­i­cal store can offer.”

Upgrading the customer experience

Giv­ing care­ful thought to a customer’s in-store expe­ri­ence will be cru­cial in 2022. Lock­down made shop­pers long to be in-store: research con­duct­ed by Mood Media found 45% of con­sumers admit­ted to miss­ing touch­ing and try­ing on prod­ucts. Be sure to craft the expe­ri­ence they deserve. 

“After going through a pro­longed peri­od where the lux­u­ry of phys­i­cal con­tact was lim­it­ed, mean­ing­ful expe­ri­ences have nev­er been more impor­tant,” says Daljit Singh, founder of design agency isin­store. “Dri­ven by the idea of dis­cov­ery and sur­prise and a need for a moment away from the real world, retail brands are reignit­ing excite­ment through mean­ing­ful escapism and sense-stim­u­lat­ing envi­ron­ments. Appeal­ing to our child­like curios­i­ty, immer­sive instal­la­tions and sen­so­r­i­al dis­plays will pro­vide a sense of won­der­ment and joy.”

Retail­ers should also con­sid­er how they can invite shop­pers to active­ly par­tic­i­pate and be part of brand expe­ri­ences, with the screen-savvy Gen Z influ­enc­ing a new era of cre­ative com­mu­ni­ca­tions. Accord­ing to research from dig­i­tal pay­ments firm Square, 35% of con­sumers are inter­est­ed in see­ing vir­tu­al real­i­ty incor­po­rat­ed into their shop­ping expe­ri­ences, while over a quar­ter (26%) want live-streamed expe­ri­ences. 

Retail­ers can make their cus­tomers part of the cre­ative process, Singh notes. “With­in this, we’ll see brands explor­ing how live-stream­ing and broad­cast­ing can be built into the phys­i­cal store expe­ri­ence to encour­age foot­fall and boost brand-cus­tomer con­nec­tion.”

AI goes next level

For retail­ers, arti­fi­cial intel­li­gence (AI) offers a fan­tas­tic oppor­tu­ni­ty to under­stand and improve a customer’s expe­ri­ence. Cyrus Gilbert-Rolfe, chief rev­enue offi­cer at soft­ware com­pa­ny EVRYTHNG, is excit­ed about the poten­tial. He points to the use of life-size holo­graph­ic peo­ple in stores and shop­ping cen­tres, an exam­ple of AI that’s been around for a while but was too expen­sive to deploy at scale until now. Such holo­grams can respond to ques­tions or even take pay­ments. 

“Can you imag­ine hold­ing your cred­it card inside a holo­gram of R2-D2 at the Dis­ney Store? Shop­pers will def­i­nite­ly crowd into a shop just to inter­act with a holo­gram, deliv­er­ing foot­fall and dwell time.”

AI can also pro­vide retail­ers with insights into what their cus­tomers want, with AI and machine learn­ing (ML) used in tan­dem for pre­dic­tive ana­lyt­ics.

“This will allow retail­ers to iden­ti­fy trends, clus­ters and pat­terns in data, which can improve deci­sion-mak­ing and even auto­mate cer­tain deci­sion points,” says Thomas Staven, chief prod­uct offi­cer at Exten­da Retail. “This can con­tribute towards retain­ing con­sumers and staff. These tech­nolo­gies also pro­vide oppor­tu­ni­ties to stream­line process­es to make them more effi­cient, which will also have a pos­i­tive impact on retail­ers’ ever-press­ing mar­gins.”

Staven antic­i­pates that AI and ML will be used by retail­ers to mon­i­tor in-store behav­iour and pro­vide access to real-time insights. He also pre­dicts that com­put­er vision will be wide­ly incor­po­rat­ed, allow­ing for image and video recog­ni­tion. 

“This will mean, for exam­ple, auto­mat­ed recog­ni­tion of non-bar­cod­ed items to pro­vide a seam­less check­out expe­ri­ence.”

Smart robot­ics will recog­nise on-shelf avail­abil­i­ty, Staven adds, allow­ing for auto­mat­ed replen­ish­ment. “For gro­cers, analy­sis of prod­uct fresh­ness will be acces­si­ble using the same tech­nol­o­gy, allow­ing for dynam­ic pric­ing.”

Tackling ransomware

As tech­nol­o­gy becomes more sophis­ti­cat­ed, so too do the threats. In 2022, retail­ers should be vig­i­lant of ran­somware, ensur­ing they’ve tak­en appro­pri­ate mea­sures to pro­tect them­selves from cyber­crime.

“Ran­somware is now a busi­ness,” explains AJ Thomp­son, chief com­mer­cial offi­cer at IT con­sul­tan­cy North­door. “It’s a con­stant threat and busi­ness­es have to accept that at some point, they will be breached.”

Crim­i­nal tac­tics include efforts to access staff cre­den­tials through social media or con­vinc­ing spoof emails, with the end goal of access­ing a company’s net­work. The crim­i­nal can then either resell com­pa­ny data or hold it to ran­som. This could result in a fine from the Infor­ma­tion Commissioner’s Office (ICO) for a GDPR fail­ure, not to men­tion the dam­age such a secu­ri­ty breach could cause the busi­ness itself. 

So how can retail­ers tack­le this threat in 2022? Invest­ment and aware­ness are key.

“Under GDPR leg­is­la­tion, organ­i­sa­tions are respon­si­ble for the cyber resilience of their sup­ply chain,” says Thomp­son. This has tra­di­tion­al­ly meant send­ing a series of ques­tions to a sup­pli­er and ask­ing for feed­back, he says, a man­u­al, bian­nu­al process that’s “inac­cu­rate, slow and painful­ly one-sided. It is high­ly unlike­ly that your sup­pli­ers con­fess to any IT secu­ri­ty issues.”

How­ev­er, some organ­i­sa­tions are now look­ing to auto­mate this process, he says, allow­ing them to run their own con­tin­u­al exter­nal assess­ments of their sup­pli­ers’ web domains. “This pro­vides a more accu­rate assess­ment, which in turn improves their secu­ri­ty.”  

Thomp­son also points to immutable back-ups, also known as air gap back-ups, which pro­vide an orig­i­nal copy of data for recov­ery. These are becom­ing increas­ing­ly essen­tial, he says, allow­ing for recov­ery in the event of a breach. Effec­tive­ly read-only, immutable back-ups can nev­er be edit­ed, over­writ­ten or altered in any way, so they can’t be affect­ed by ran­somware code.

Some organ­i­sa­tions might already be able to cre­ate immutable back-ups as part of their solu­tion, he says. “Most, how­ev­er, will need to imple­ment a new set of tech­nolo­gies.”

Sustainability focus

With all eyes recent­ly on COP26, cus­tomers will be close­ly watch­ing how their favourite brands respond to envi­ron­men­tal issues. For retail­ers, it’s time to make your stance clear­er than ever.

“Trans­paren­cy is key,” says Orwin. “Con­sumers don’t want pledges or tar­gets. They want action. The more brands can show that they’re tak­ing real, tan­gi­ble steps, the bet­ter.”

Cus­tomers want to shop with brands that act with integri­ty and pur­pose. Increas­ing­ly, they feel they can make a dif­fer­ence by care­ful­ly choos­ing where they spend their mon­ey. Brands can tap into this by con­sid­er­ing how they present their prod­ucts, whether through infor­ma­tive win­dow dis­plays, detail-rich labels or online copy that makes the ori­gin sto­ry and eco-friend­ly cre­den­tials of an item crys­tal clear.

“Brands that can demon­strate trans­paren­cy with­in the store expe­ri­ence will be reward­ed with greater affin­i­ty and engage­ment,” pre­dicts Singh. “We’ll see more brands ini­ti­ate take-back schemes, open repair stores and con­sid­er mod­u­lar store for­mats to accom­pa­ny the move towards a more regen­er­a­tive future.”

Space commerce

For one of next year’s most excit­ing retail prospects, look to the stars – quite lit­er­al­ly. 

Space com­merce might once have sound­ed like a whacky premise straight from a sci-fi movie, but it’s edg­ing ever clos­er to lift-off. It involves the use of space for the ben­e­fit of busi­ness, “cre­at­ing infra­struc­ture for the pro­duc­tion, ware­hous­ing and deliv­ery of prod­ucts and ser­vices in orbit”, explains Hugh Fletch­er, glob­al head of con­sul­tan­cy and inno­va­tion at Wun­der­man Thomp­son Com­merce, the ecom­merce agency. 

With the likes of Elon Musk, Jeff Bezos and Richard Bran­son push­ing the bound­aries of what we con­sid­er ‘nor­mal’ for space trav­el, the new year will be the per­fect oppor­tu­ni­ty to watch how space com­merce begins to devel­op, says Fletch­er. 

“Retail lead­ers should use 2022 to mod­el what their busi­ness­es could look like in a future where it plays a key role,” he says, adding that the most adven­tur­ous or for­ward-think­ing busi­ness­es should begin to engage with space agen­cies and com­mer­cial space explor­ers to see if they can become involved in test­ing future prod­ucts and ser­vices. 

“While Bezos and Musk increas­ing­ly ramp up their invest­ment in the sec­tor, it’s vital that gov­ern­ments, NGOs [non-gov­ern­men­tal organ­i­sa­tions] and busi­ness lead­ers under­stand what is hap­pen­ing in orbit, to pre­pare for a future where it is humankind, and not bil­lion­aires, who ben­e­fit from space.”

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