The Future of Retail – 2022 and Beyond

The role of physical retail has changed. It used to be said that 70% of buying decisions were made in store, meaning customer journeys were largely isolated to the shop floor. The objective behind the in-store design was simply to facilitate pre-planned transactions and encourage additional unplanned purchases.

While the concept of online shopping came about decades ago, it took a long time to catch on. Starting out as a novelty – most people browsing eBay or using it to track down obscure items – it is now ingrained in our everyday lives, bolstered further by the impact of the covid-19 pandemic. It has grown from facilitating webstore purchases via computers, to offering an array of online customer touch points accessed through apps, social media platforms, online ads, videos, the list goes on. The customer journey is now vast, complex and no longer linier.

The buyer vs the shopper

But the deep-rooted need that we all have for human interaction means physical will always hold an integral place in the way that we shop. In-store retail is able to stimulate the senses in a way that online will never be able to. And because of this invaluable USP, we are seeing more and more retailers revaluate their physical spaces, subsequently reinventing them as marketing vessels. This shift in approach goes so far that many experts are now arguing that retailers should no longer consider rent as an overhead and instead classify it as a marketing expense – a cost of customer acquisition. This new era of retail is all about creating an experience. Even if customers aren’t purchasing directly from the store, its job is to create a connection that resonates and encourages them to buy the product from a different channel.

On the other hand, we have also seen an alternative approach, using stores as a collection centre for items purchased online. Click and collect is another method of purchasing that has strengthened during the pandemic. As more customers moved to online shopping out of safety and necessity, stores acted as a tool for fulfilment. Delivery has not been a smooth road for ecommerce, with countless complaints of drivers leaving parcels in bins, delivering the wrong address or even losing the package in transit. Customers are able to save on delivery costs and leverage the convenience of collecting their orders from a nearby location at a time that works for them.

Each of these in-store functionalities serve two separate customers – the shopper and the buyer. The shopper is looking to gain an emotional experience from the store, they are more likely to be swayed into a purchase decision. The buyer is simply looking for a functional experience, unlikely to be swayed by their environment.

Stepping into the future

As we move through 2022, still riding what looks like the tail end of a pandemic, facing a rising cost of living, demand for sustainability and an increasingly uncertain business landscape, it’s difficult to know what the future of retail will look like. We are able to map out basic trends, here are just a few that I see coming:

• Pop-up shops – used to facilitate temporary physical stores, take advantage of areas with high levels of footfall, without having to commit to a long-term investment.
• Shopping local – gives shoppers a sense of community, convenience and trust.
• Living brands – an abstract concept that refers to when a brand fully embodies everything it represents, from the people working within it, to the people buying from it.
• In-store technology – this is growing at an exponential rate and enhancing retail spaces through immersive experiences and optimised processes.
• Social commerce – used to bridge the omni-channel experience, not just online but with in-store events too.

Of course, sustainability will remain a strong presence in the retail world, with continued pressure from consumers forcing retailers to adopt more eco-friendly principles and processes. But there is an overhanging question of how we can continue on a sustainable trajectory, parallel to the mounting cost of living and the financial fallout of the recession. There will be a need for real interjection and support from government and intergovernmental organisations to help push through sustainable processes. The hope is that sustainability will become the default, something that is certainly needed if we are going to protect the future of our planet.

Stepping into 2022 and beyond is like stepping into the unknown in so many ways. But with uncertainty comes opportunity and innovation. This is truly an exciting time for retail. We’ve broken free of what we can now see as fairly rigid structures and are moving at pace into an interconnected future without boundaries. Something that I’m excited to be a part of.