6 Exciting 2022 Retail Trends to Watch
It’s been two years since the pandemic transformed the retail market, and it feels like we’re still adjusting, as nothing remains certain. But the retail industry isn’t letting it stop its efforts to create the best shopping experiences or tap into the most innovative technologies.
Today, we bring you six exciting retail trends to watch, and include some practical advice to help you turn these trends into competitive advantages for your company.
Expand into China as its Youngest Generation Devours the Luxury Retail Market
We’re seeing a large number of companies heading for Chinese expansion, and with good reason. “China was the only country with positive luxury growth in 2020,” reports Fashion Discounts. “By 2025, China will be the world’s largest luxury market,” predicts The Luxury Conversation.
The time to expand is now, as its youngest generation – born in 1990-2000 – is “now 50% of the luxury market,” according to Jing Daily.
The timing is especially critical, as Chinese consumers tend to celebrate national pride and buy from local brands, especially following the pandemic, explains The Luxury Conversation. To engage them, we recommend localizing at a deep level – from the software you use to the influencers you partner with – to create a shopping experience that feels immersed in the local culture.
Prioritize Gen Z
One of the biggest retail trends to watch is the growing emphasis retailers put on Gen Z – rightfully so, since “70% of luxury sales will be made by Gen Z and millennials by 2025,” reports Luxe Digital. And their shopping preferences are different from what we’ve known so far.
According to eMarketer, Gen Z consumers educate themselves on social media, which is the best place to target them, whether organically, via advertising or with the help of influencers. According to the Instagram 2022 Trend Report, over 1 in 4 intends to shop directly through their social media feeds.
When you do target them, eMarketer points out they care a lot more about a brand’s proactive action toward social justice than they do about product prices, even though they don’t make as much money as older generations. Instagram emphasizes that Gen Zers cares about sustainability, including reusing, repurposing and reselling their clothes.
Leverage Influencers in a Way that Actually Matters to Your Audience
Using influencers to engage with consumers has been one of the retail trends to watch for a while, but it’s growing in significance, especially as Gen Z gets prioritized. According to Ogilvy’s 2022 report, “influencer marketing is 277% more emotionally intense and 87% more memorable” than TV ads, as it gets integrated into content consumers already enjoy.
In addition, influencer marketing is a great opportunity for the retail markets to put their money where their brand promises to this generation are.
The report indicates that “38% of consumers are more likely to trust brands that cast diverse people in their ads,” but points out that this alone won’t solve the inequality found in the industry. It explains that “black female influencers are paid up to 10 times less for the same work as their white counterparts. In addition to the steep racial pay gap, female influencers are paid 33% less than male influencers – even though female influencers make up 84% of the entire industry. On top of that, LGBTQ+ influencers, as well as influencers with disabilities, are more often compensated with ‘exposure’ in lieu of the standard rates brands usually pay.”
OF CONSUMERS ARE MORE LIKELY TO TRUST BRANDS THAT CAST DIVERSE PEOPLE IN THEIR ADS.
Design Omnichannel Clienteling
After getting hit during the first COVID year, “the personal luxury goods market grew by 29%” in 2021, reaching 283 billion Euros, reports Bain & Company, which expects this retail market to keep experiencing a 6-8% annual growth by 2025.
However, the pandemic managed to change this market nonetheless. Alongside other sectors, clienteling turned to virtual platforms to keep operating, and it is expected to keep combining in-store and virtual channels as we head into 2022.
Sales associates will need to be empowered by omnichannel data, so they can predict customers’ needs based on their history with the company, make personalized recommendations, and keep track of customers’ desired products when they get back to stock, no matter how they interact with customers.
Provide Same Day Delivery (Although Most Consumers Still Accept a Slightly Larger Delivery Window)
The last mile continues to be a critical aspect of the shopping experience. Expect an increase in the amount of retailers offering same day delivery, some as fast as two hours, predicts Forbes. One of the ways they’ll make it happen is by establishing micro fulfillment and distribution centers across the country, it explains. Another way is by partnering with third party delivery services, such as DoorDash.
But in case offering same day delivery feels like too big of a leap from where your company is right now, McKinsey research found that “more than 90% of US online shoppers expect free two to three day shipping.” Longer than that, half of them will shop elsewhere.
Bring RFID to Your Stores
According to the Global RFID Market Research 2021-2026, Logistik Unicorp was able to reduce shipping time by 35% using RFID technology, while ensuring “strict quality requirements.”
RFID stands for radio-frequency identification. When you have an RFID reader, it can read tags or smart labels, then capture the data on your system. This technology is growing in popularity in retail markets, because it automates and simplifies transaction and inventory management.
For example, one of the trends we’re seeing is letting RFID automatically scan items in shopping baskets and populate customers’ carts, so they and your cashiers won’t need to do it automatically. That’s a much better shopping experience, as it removes the need for tedious tasks, and keeps the focus on the fun. Then, when customers walk out of the store, it scans the items again, to verify they actually paid for them. If they didn’t, an alarm is set off.
Back in their warehouses, a key trend that came up in the report is that retailers use RFID technology to track and manage inventory more accurately, plus make smarter purchase decisions, which lead to higher profit margins.
In addition, we’ve seen retailers use a wand to scan boxes. It records which orders have been processed and which items are leaving the warehouse. After all, if you’re looking for retail trends to watch, you might as well explore trends that make your team’s life easier while giving customers a better experience. It’s kinda like having your own magic wand.
2022 Retail Trends to Watch… and Implement
Now that you’ve got a list of the most exciting retail trends to watch, it’s time to start implementing them and lead your retail markets. But the good news is you don’t have to implement all of them, certainly not right away.
It’s much better to choose one or two that holistically align with your goals for 2022, and master them before expanding further. It will help you focus on creating the kind of shopping experiences that drive customer joy. Test these trends out, get feedback from your customers, check your profit margins, then adjust as you go. Over time, you’ll drive loyalty and advocacy, too, leading to a compound interest in your bottom line.
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