Consumer behaviour has changed drastically in the last two years since the COVID-19 pandemic hit. Once countries around the world went into lockdown and there was no clear indication of when the situation would get back to normal. We as people learned to adapt and create a new normal for ourselves. The new normal, even after the restrictions were lifted, included social distancing, wearing masks outdoors, and minimising contact with the outside world.
This shift in consumer behaviour obviously had a big impact on shaping the retail trends in 2022 because the entire shopping experience changed. The consumer had different priorities in mind and this was seen by retailers on two levels: the way the consumer shopped and the things they were shopping for.
How did the Retail Industry Trends Evolve in the Last Two Years?
As mentioned above, the retail industry trends had a two level impact since the pandemic and the resulting consequences of the pandemic. The average consumer faced a financial impact in their jobs as multiple industries suffered the backlash from the pandemic.
Nearly a quarter of the total jobs in the UK were at risk because of the pandemic, and there was a rise in the overall unemployment rate around the world. Even those who were employed faced salary cuts as an effect of the pandemic. So the spending on luxury goods and services reduced drastically. Plus, it was also inaccessible to a large extent.
For example, having a spa day became impossible because of the social distancing norms set by the government. You couldn’t get a massage, manicure, pedicure or a haircut for the longest time because salons were closed. You also couldn’t travel to different cities or countries or go for a vacation because of the travel restrictions. So even if you were financially stable in the highly unstable job market, the limited access to experiences you could spend money on also acted as a change in the consumer and retail trends.
The second big shift in the consumer behaviour that impacted retail trends was the tools the consumers used to spend. Even after the restrictions were lifted, it was considered unsafe to travel or go to large public gatherings because the rate of infection and caseload was quite high. It was safer to stay indoors. This situational shift meant that retailers had to adapt and offer their products on a more accessible platform. It created a boom in the ecommerce industry as more and more retail brands started offering their goods online. Large retailers already had apps for their services, but they started offering more discounts and rewards for consumers who used it.
Online retail sales in the UK observed a 53.5% (The Circular Board) increase in the third quarter of 2020 as the consumers adapted to the changing environments, stabilised their income sources, and began to increase their expenses again. This is one of the retail trends of 2022 that is only expected to grow as time progresses due to the ease of the experience observed by the consumer. All you have to do as a user is sit at home, go to a website or download an app, and you have all you could need delivered to your doorstep.
Read more: Impact of the Corona Virus Pandemic on Luxury Retail
New shoes, groceries for the week, presents, home accessories, and even furniture can be delivered to your house, and the consumer has realised that the need to go to a retail store does not exist. You can have anything you want in the world delivered to your doorstep.
Other Top Retail Trends Observed for the Coming Years
It has already been established that optimising the consumer experience is key to building a successful retail brand. So the top retail trends for 2022 all revolve around the ways in which companies can invest their resources into enhancing the consumer experience, and the technologies, tools and strategies they will implement to meet the consumer’s demands.
Read more: 75% Consumers Anticipate Financial Impact Effects of COVID on Consumer Behaviour
The Shift towards Sustainability as a Retail Trend for 2022
The rise in sustainability as a retail trend has been observed in the last few years. With the climate change crisis at an all-time high, becoming more eco-friendly and sustainable as a way of living is becoming a priority for a lot of consumers. Even if they shop online, they want to know that the companies and brands they are engaging with are following sustainable practises at their organisation.
This could mean a variety of things:
- Retail brands could choose recycled or recyclable packaging material
- They could opt to reduce their carbon emissions by using alternative energy sources
- Brands could also start investing in and collaborating with companies that are trying to make a positive environmental impact
- Retail brands could start using recycled material as their raw material for production, and more
The consumer wants to feel like they are either helping with the climate change crisis or doing their bit to reduce their overall carbon footprint, and it shows in their buying trends. 66% (Good Carts) of consumers state that they do not mind spending more on products if they are sustainable as compared to the other non-sustainable alternatives. This trend is likely to grow in time, but making sustainable products more accessible and more affordable to the audience at large would go a long way in increasing the actual value of the market.
Read more: GenZ''s - The New 'IT' Consumers for Retailers Today
The Increase in Expenditure towards Outdoor Experiences
The outdoor sports and leisure industry is expected to grow significantly in the coming year. People are becoming more conscious about their health and wellness and it is showing in their expenses as consumers. The outdoor sports industry is expected to reach a whopping £10.6bn (Report Linker) in 2022 in its market size in the UK. Even the tourism industry is expected to grow in the coming year as restrictions ease once countries stabilise after the surge of the Omicron variant.
People have started to realise the importance of living a healthy, well-balanced and more mindful life and are choosing healthier options in terms of food, fitness, and their mental well-being. The pandemic took a toll on everyone’s mental health and their priorities began to shift over time. Retail trends also evolved with it. There was a noticeable increase in the number of meditation apps (both in terms of development and download rates), more people started to go to therapy, joined online fitness communities, started travelling, and in general started working towards living a more balanced life.
The pandemic shaped a lot of retail trends in 2022 as the consumer outlook and approach towards their daily existence began to change over time.
Retail Industry Trends are Focused More Towards Developing eCommerce
The most important retail trends in 2022 have to be focused on eCommerce and consumer experience. Consumers across the world started to opt for online shopping options for all their daily needs and expenses because of the limited access to outdoor options and safety concerns to go along with it. As retail brands scrambled to build an online experience for their consumers, new trends began to emerge.
The Growth of Online Shopping Experiences as a Retail Industry Trend
Retail brands began to focus on building an online presence for their company as a way of attracting more customers and increasing their sales. This retail trend for 2022 is expected to reach multiple subcategories of the retail industry as more and more companies realise the importance of having an eCommerce option available for their brand. They have started offering more discounts, voucher codes, and more as a way of attracting new customers and retaining their existing ones.
The Combination of the In-Store and Online Consumer Shopping Experience
Since malls and stores have opened up again, the new normal includes combining the online shopping experience with the offline one. Companies have to stop looking at the two as separate entities and start approaching them both as a singular identity for their organisation. The online store or eCommerce option will be an extension of the offline retail store and vice versa. Consumers want an integrated and blended experience when they interact with a brand and they do not want to feel like they are associating with two different companies when they experience their goods, services or customer support when they interact with their online or offline options.
Read also: The future of analytics in luxury retail
Inclusion of Artificial Intelligence and Machine Learning to Enhance the Consumer Experience
Artificial intelligence and machine learning are quickly becoming integral parts of multiple industries around the world, and retail is one of them. Since the pandemic the consumers feel like they want to minimise their human contact for safety reasons, but that does not mean that they want to feel like they are lacking in any customer service, be it at the physical retail outlet or the online webstore. Integration of AI and ML into daily operations to optimise the consumer experience overall, study their behaviour, send out personalised offers, build and maintain customer loyalty, etc. will become an important retail trend of 2022 as well.
Final Thoughts
Retail trends are only going to be dictated based on consumer trends, their buying experiences and their overall behaviour towards the industry. Retail brands need to upskill themselves, update their technologies, and optimise their operations to anticipate customer needs and meet them. That is the only way they can ensure they stay ahead of their competitors and stay relevant in today’s fast-paced world. Market research services also state that the amount of content an individual consumes is only going to increase with each passing day, which means companies need to work doubly hard to increase their revenue and maintain their relevance.
