Fortunately, in the UK, it seems that the retail industry is finally emerging on the other side of the pandemic, equipped with powerful technology and ready to start investing in growth again. However, there are still obstacles on the path that businesses need to stay ahead of. Here are five trends which will define 2022 and some expert tips on how to deal with them.
Covid isn’t over
While restrictions have loosened and the government is touting a move to “endemic” – rather than “pandemic” – Covid, the virus could still cause issues for retailers. There is a potential that further variants will emerge, and this could necessitate the return of restrictions. To be prepared, retail businesses will need to up their ecommerce game.
With customers more likely to abandon their purchase online than in person, substandard ecommerce means lost sales, so it’s in a brand’s best interest to make sure that its online offering is competitive. While stores are open, retailers that operate both in person and online should also be working on making customers aware of their full offering. That means investing in omnichannel initiatives and considering how best to convince die hard in-store shoppers to try the online experience.
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Supply chain headaches continue
The complex, globally interdependent supply chains that make the modern world possible are likely to continue to remain unbalanced for some time. As it becomes clear that this isn’t a short-term issue, brands that are still struggling should consider other options. Perhaps it’s worth investigating production and supply options closer to home or contacting producers elsewhere in the world to discuss bulk deals.
Ongoing supply chain issues also have consequences for sales and pricing: with a shortage of so many goods throughout the market, customers are developing a higher tolerance for buying things at full price. Rather than offering deals where they aren’t necessary, brands should conduct a sales and causality analysis to ensure that they’re only offering discounts where they really make a difference.
The end of third-party data
Consumers are becoming more protective of their personal data – a new study shows that 87% of American teenagers use iPhones, which have the strongest built-in privacy protections. In turn, regulators the world over are beginning to impose new rules on online marketing and data gathering. In short, because of this legislation, brands’ ability to use third-party data will be drastically reduced.
Fortunately, first-party data provides all the useful information that a brand needs, so this switch probably won’t cause too many problems for savvy retailers. The keys to success will be increasing the relevance of the site, establishing a robust loyalty proposition, and spending time making social commerce work.
While much of the legislation on the table right now permits brands to use third party data until the end of the year or even later, it’s worth investing in first-party data gathering and processing capabilities sooner rather than later. Brands will also need to ensure that they have a customer data platform (CDP) that can handle the data.
Making the switch doesn’t need to be expensive, as brands can reallocate funds from paid channels. In the long run, this change is probably good news, as it shakes up the industry, creates new opportunities, and puts brands in control of their own destinies.
In addition to changing strategy on the technical side, brands will also need to convince customers to hand over their data. Whereas users used to give over their data as a matter of course, today’s customers expect something in return. One proven solution is to create a strong loyalty offering which keeps customers sweet and literally gives back in return for their precious data.
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Social commerce takes centre stage
While social marketing will likely never fully eclipse traditional performance marketing, it has certainly established its place as a worthy counterpart. If a retailer hasn’t started making use of social commerce, 2022 is the year to do it.
The important thing with social commerce is finding the right platform and people to work with. No matter what your brand sells, there is undoubtedly already an online community that obsesses about the industry, so a little research will make it easy to get a sense of the landscape.
Given that it’s an inherently social project, retailers will likely need some trial and error to find a strategy that works. YouTube is a great place for most brands to start, as is TikTok – it was rated by Google as the world’s most visited website last year and the average age of users recently passed 25, so it’s not just for young people anymore. Once the foundations are laid brands can begin experimenting with exciting approaches like liveshopping and conversational commerce.
Brands are pivoting
With retail retaining its well-earned reputation as a volatile, risky and often low-margin industry, many brands are looking for ways to diversify and hedge against future instability. Retailers of all kinds are likely to use 2022 as a year for side-hustles and pivots to new business verticals.
Sporting goods stores, for instance, may want to try running a gym, while food retailers could consider running cooking classes or building an online presence as a source for recipes and culinary inspiration. These are all great opportunities for brands to add value for consumers and differentiate themselves from the competition.
Lots to look forward to
Despite the challenges, the year ahead holds immense promise for retailers. Brands that can master ecommerce and omnichannel messaging stand to reach new heights, even in the face of unpredictable world events.
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