To paraphrase Dickens: ‘It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness …” especially, I might add, if your job involved forecasting retail in any measurable way. Nobel Laureate Niels Bohr came closest when he said, “Prediction is very difficult, especially if it’s about the future!”
by Mike Giambattista, Editor in Chief
Without any pejorative intent, we look back at a smattering of 2022 retail prognostications to see who got it right and who, well … not so much. I think it was my stockbroker who said something to the effect of “past performance is not a guarantee of future results” but let’s face it, we all bank on the fact that it should. With that, here are some of the forecasts from this time a year ago. I’ll resist the urge to editorialize and let you be the judge.
From Oracle:
Consumer spending: changing shopping behavior and rising expectations
“This trend will continue, and we have recognized that retailers still have difficulty aligning their channels to a consistent shopper or customer experience. This makes it difficult for retailers to get into new service models, such as recycling and subscriptions, rental models, and direct-to-consumer. At the same time, the consumer expects personalization.”
Economic uncertainty
“Consumer spending is starting to be impacted by inflation. The cost-of-living crisis is starting to impact disposable income, which for some retailers is reducing their sales and revenue. For other retailers, it’s causing product switches – people are trading down or going elsewhere. Change is happening, and inflation is impacting costs for retailers.”
People and productivity: attracting and retaining talent
“It’s been increasingly challenging to attract and retain the right people. When retailers need help, it is essential to establish modern and engaging workplaces where employees have the right tools, automated workflows and the data they need to do their jobs. There’s a particular opportunity around creating an employee experience that attracts the right people to a retail organization.”
From Salesforce:
Retailers will humanize experiences to drive loyalty
“Retailers will establish new – or reimagine existing – loyalty programs to acquire and engage shoppers in a meaningful and personalized way. This will be a crucial advantage as third-party ad trackers become a thing of the past. But keep in mind that transactional rewards aren’t enough to ensure customers stay loyal for life.”
Retailers will leverage digital service to humanize the experience
“Service has become the next frontier of experience — 91% of customers say they are more willing to make another purchase after a great service experience and 80% of those same shoppers will abandon a retailer after three bad experiences. To satisfy the needs of the increasingly digital shopper, we predict retailers will offer digital service anywhere to humanize the experience.”
Retailers will continue evolving the brick-and-mortar experience
“The innovation lies in its evolution. For example, nearly one-third of retailers plan to turn locations into micro-fulfillment centers with popular fulfillment options like buy online, pick up in store (BOPIS). In fact, retailers with creative store fulfillment options grew revenue two times higher in the five days leading up to Christmas than those that didn’t. This gave consumers the confidence to shop online and had the same effect as extending shipping deadlines — a critical advantage during “shippageddon.”
From Deloitte:
Generation Z starts to splash the cash
“Attracting Gen Z becomes more important as they become both customers and employees. The generation born between 1995 and 2010 has now joined the workforce. Not only do they have their own spending power and are no longer reliant on parents, they also have strong and distinctive wants and needs that retailers and brands need to provide for.”
Shop and Go Go Go…
“With consumers demanding a frictionless and often contactless retail experience, checkout-free stores, ultra-fast and autonomous delivery are rapidly becoming mainstream.“
Circularity and traceability in demand
“Circularity is on a fantastic growth trajectory with the second-hand clothing sector expected to grow faster than fast fashion. Meanwhile consumer attitudes towards sustainability means that traceability is a critical capability required to deliver on climate promises and achieve science-based targets to reduce emissions.”
From Pods:
Expect the rise of social media-friendly retail stores
“For example, Glossier’s Seattle is one of the most Instagrammable stores (and even a must-see tourist destination) thanks to its unique store design that incorporates elements like mossy hills, and mushrooms. The store is so popular that a quick look at the location’s geo-tag page on Instagram shows hundreds (perhaps even thousands) of photos within less than a month of opening.”
Rapid order fulfillment will be table stakes
“Fast shipping has become the new expectation. McKinsey’s researchshows that 90% of American consumers expect free 2 or 3 day shipping. But while free fast shipping is likely beyond the budgets of many retailers, rapid order fulfillment certainly is not.”
More interesting retail and brand partnerships
“2021 was the year of unexpected collaborations between fast food joints and celebrities. McDonald’s alone did four, at least two of which broke sales records according to the CEO. Collaborations between brands and influencers are nothing new, but McDonald’s success will encourage retailers to seek out more unexpected and interesting partnerships going into 2022.”
Editor’s Note: Granted, the fact that I culled certain predictions and omitted others is in fact, a form of editorialization (guilty as charged) but the point here is to take a critical look at some of the ideas that we all anticipated, cypher through what actually came to pass, why they did, and probably more importantly why they didn’t.
We’ll take a curated look at what some of the bigger retail thinkers are predicting for 2023 in an upcoming article.
Photo by Felix Mittermeier on Unsplash
