The evolved relationship between the retail industry and consumers can be easily attributed to the transformation and innovation in retail. Here’s looking at it in 2022.
In the past couple of years, the upheavals and expectations the retail sector has seen (and has become accustomed to) is no less than a feat. Being first in the line of industries that bore the brunt of pandemic laden curbs and navigating through unending transformation to suit customer needs, the retail sector has undoubtedly become more technologically advanced.
Though customers’ expectations today are clear and comprehensive, they are also continuously evolving. And to not just match up to these expectations but stay a step ahead, a close watch needs to be kept on consumer behavior. Bridging the gap between digital acceleration and focusing on building customer intimacy is the top priority for retailers. In addition, innovations need to be carried out, as customer loyalty gains a new dimension driven by a deeper customer-brand connection. Here are some retail industry trends in line with customers’ expectations in 2022.
Reimagining Customer Engagement
In retail, customer engagement is seeing the emergence of new frontiers every day. While digital presence is continuously proliferating to get up close and personal with customers; however, at the same time, physical stores aren’t going anywhere either. In fact, they’re smartening up to match online experiences in ways never imagined. Amazon building physical bookstores since 2015, and its plans to open large-scale retail stores mark the beginning of something new entirely. Retail engagement is fast going from online experiences to creating experience centers.
While traditional retailers are dabbling into self-checkout kiosks, click-and-collect points, augmented-reality dressing rooms, mobile checkouts and are trying hard to build an online presence—online-only retailers are exploring physical selling. It makes technological infrastructure and technology integration and transformation doubly challenging, and a key element in delivering customers what they want.
Innovation in Service
While innovation in product isn’t going anywhere for a long time, innovation in service is what’s become a differentiating factor in retail. The battle will be fought not on discounts or lower prices but on differentiation of service coupled with product innovation. Even top product brands like Apple, Samsung, or LG, also rely on their service to differentiate themselves. And great service will play a decisive factor in providing customer experience, building customer loyalty, making service a unique selling point.
Therefore, whether it is to provide delightful product experiences, impeccable buying journeys, exceptional customer interactions—outstanding service will become a thumb rule for success. And the one thing that will come in hand in serving customers would be trustworthy, excellent quality data. Hence, constantly identifying new data sources to assess customers’ preferences will become the mantra for success.
Art of Delivering Products
Delivering products to the end customers is no less than an art, an art that stands on a robust, unshakable delivery engine. Last-mile delivery turned out to be the most stringent test for retailers globally during the pandemic, as supply chain lines got majorly affected. However, the revolution in delivery had started before that. In 2019, ‘Checkers’ supermarket in South Africa started a 1-hour grocery delivery service called ‘Sixty60.’
Many such examples of speedy delivery can be found across the globe. Amazon is a pioneer in this. More evolutions will happen in this domain; from curbside pickups to rapid hyper-local last mile deliveries, the pace of delivering products to customers will help neutralize the competition for retailers. In addition, innovative delivery mechanisms such as at-public places or in-car deliveries and drone deliveries will play a decisive role in building a superior level of trust with customers.
Subscription Powered Retail
One of the next big things for retail (among many next big things) is the upsurge of subscription retail. Once again, Amazon has pioneered it through ‘Amazon Prime’ by offering preference benefits, discounts, free home deliveries, and painless returns to its Prime customers. Many fashion brands have also taken to providing subscriptions. Membership plans ranging from 6 months to a year for a small subscription fee are turning out to be a win-win for both customers and retailers; merchants get higher customer lifetime value, and customers get special attention and treatment through concessions and other benefits.
Quite clearly, technology is playing a significant role in it. For example, accurate data management of products, tailored offerings, personalization, and buyers having their individual dashboards displaying real-time status of buying activities—everything contributes to making shoppers buy more and more.
The inevitable shift to a connected environment is known to all, but the pace at which connectivity is increasing is truly magnificent. According to Cisco’s Annual Internet Report, by 2023, devices linked with IP networks would be thrice the entire world’s population.
This kind of speed and scale in digitalization greatly affects the emotions and responses of consumers, altering their behavior towards a shopping environment forever; thereby, constantly raising their bar of expectations. Moreover, new buying patterns are emerging that shape daily lives and offer both challenges and opportunities to retailers.
Therefore, while consumers are adjusting their behaviors to technology—products and service providers are adapting to both—customer behaviors and technology. And they must keep doing it.
Retailers have lived through an experience of a lifetime where opportunities and priorities have reshaped, industry rules have changed, and strategies have been renewed. To digitally differentiate themselves, retailers must make pointed, well-thought-out digital investments. Everything from supply chain to managing inventories to customers’ digital experiences must be in perfect sync. The Health and safety of both employees and customers have attained great significance and will remain central to customer behavior. Perceptions of cost cuttings will evolve; digital spending cutbacks would be the last thing on the minds of senior executives. New perspectives will emerge on addressing productivity, profitability, and partnerships.
Retail in 2022 will be an extension of 2021 but will see newer dimensions to retain and engage customers and avert the risks of becoming irrelevant.