We welcome 2022 with the hope of a less turbulent year than the previous two. With the start of the new year, several trends are emerging in the retail sector. Let’s look at five predictions and how they could impact how we do business in the future.
Data and privacy continue to grow in importance
One of the biggest trends we foresee is that data and privacy issues will always be top of mind. Last year brought several iOS updates, and in 2022 we will be approaching the decline of the third-party cookie. This means it will be harder for brands to access the data they need to create personalized customer experiences. Retailers will need to work more diligently to prove to their customers that there is a solid value exchange that justifies sharing their data in exchange for a better customer experience. This will help brands retain customers longer and increase their lifetime value, as shoppers will want to come back to engage with personalized experiences.
Online additions Physical stores
2022 will also bring a rise in online businesses setting up physical storefronts to grab the attention of shoppers. We are already seeing successful e-tailers who have seen massive growth online begin their journey to physical retail. The success of these businesses will depend on how well these retailers integrate online and offline experiences to ensure customers feel recognized and rewarded wherever they shop.
Where does this article come from?
Another trend that will continue to gain momentum in 2022 is cross-border trade. Increasingly, consumers are buying from foreign retailers without even realizing it. While we expect the cross-border experience to only grow, each retailer will need to do their part to ensure it succeeds. From the values they promote to the loyalty programs they offer, stores operating across borders will need to create brand experiences that translate successfully to different markets.
Supply chain woes continue
Supply chain has been a big retail story in the second half of 2021, and we see that continuing into 2022. Most consumers know there are delays and retailers are doing their best for fulfilling orders and stocking shelves. One of the biggest issues for retailers in 2022 will be doing everything possible not to over-promise and under-deliver. Retailers should do their best to ensure listed items are available and be transparent about hard-to-stock items to keep consumer confidence in check.
These stock issues can also impact the ability to deliver the typical discounts, sales, and specials that brands have relied on in the past. In 2022, brands need to think about new, more experiential incentives such as early access to sales or next day delivery to attract and retain customers. Good communication will be essential to meet this challenge.
Back to the drawing board for digital ads
Finally, this year we see the cost of digital advertising rising again. Brands that invest in promoting their products on channels such as Facebook, Instagram and TikTok may want to take stock of their return on investment before increasing their budgets in line with rising costs. Brands can start diversifying their use of these channels. Some examples include using ads to display their values or retargeting existing customers by giving them loyalty points to spend. These tactics drive retention by better communicating brand messages and building relationships with customers rather than just focusing on product-focused messaging to drive sales.
Charlie Casey is CEO and co-founder of LoyaltyLion, a data-driven loyalty and engagement platform that powers e-commerce growth.