NAVIGATING RETAIL IN 2022
The key trends and considerations as you plan "where to" from here.
There is nothing “normal” about what’s ahead.
It's been a challenging year for most people really and in reflecting on what's happened and what's ahead, we thought it was a perfect time to provide some insight on what we are seeing as the key trends and considerations for 2022 and beyond. We aren't giving away all out knowledge just yet.....we look forward to you coming back for more in 2022.
The global pandemic and changing economic landscape is not simply accelerating trends, it has been the catalyst to a once-in-a-generation transformation in human behaviour, that will change everything. From how we live, work, learn, interact, and socialise but also, how, and why we shop.
Retail has become a complex ecosystem that is completely integrated across formats, experiences, and platforms. It places the customer at the centre, with a huge variety of options for them to engage and purchase in the way that suits them. As a result, consumers are becoming increasingly open-minded, far braver, and more experimental.
Following are six key trends we see influencing retailers and how consumers respond to the ever changing landscape.
01 OMNI EXPERIENCE
The pandemic accelerated the need for technological solutions and digital innovations that allowed our customers to be hyper-connected. They were already demanding to shop, return, or share products anytime and anywhere that suited them, but now everything is demanded at the touch of a button. Bricks and mortar and the digital are no longer separate but complementary interaction points that improve the retail experience. Channel is the language of business and consistency is the expectation of the customer. An omni experience encompasses everything from online to off-line experiences. With click and collect, digital humans, endless aisle, and data-driven stores, omni experience dominates retail.
Best in class examples: Litmus Labs,MAC Innovation Lab NYC, Burberry Shenzen
Fostering a sense of togetherness is key to adapting the changing retail landscape. Stores provide a home base for the brand within a multitude of communities. There are limitless opportunities for a brand to tap into the heart of a community and foster collective belonging.
Together as human beings who, despite increasing individuality, yearn to connect with one another and with others across digital and in real life. Retail becomes a destination conceived in a way that serves customer needs rather than solely on shopping. Blurring the boundaries between hospitality, entertainment, and retail; leading brands and retailers are thriving in a collaborative, cultural space; embracing food, music and entertainment initiatives. A place for customers to play, relax, have fun, learn, socialise and shop.
Best in class examples: Shopify NYC, Vans Downtown LA, Lululemon Lifestyle Hub, Chicago
As so many of us begin to live and work in different ways, the re-localisation of retail is emerging (out of necessity). We are seeing internationally the creation of new formats in new locations that are carefully designed to reflect their locality in every way; from the materials used to construct the store, to the product offered.
Experts predict that by 2025 a significant number of retailers will tap into local communities, developing hyper-personalisation and hyper-localisation to draw in consumers. We believe that in highly competitive markets and categories, by carefully studying the local market and responding to the values, habits and sub-culture of the local customer in the design will be the difference between a success or a same-same delivery.
Best in class examples include: Nike Live King's Road, London, Tap HCMC, Gucci Bamboo House, Tokyo, Westfield Side Hustle Heroes, London
04 HUMANISED SERVICE
Service is fast becoming the greatest differentiator of all, and we believe that the future of retail is about humanisation. Placing the needs of customers and team at the centre of everything and revolving around them and their every need. Not in a way that pays lip service to this idea, but in a way that is very real.
In a world where the first step is a click through to the moment of delivery which may be totally removed from the purchasing environment, we can harness digital technologies to serve people in ways that are more personal, tailored, convenient and human - those personal touches that make the shopper feel important and heard.
Humanised service is also optimising our people capability in taking them into wherever the customer is IRL to deliver visual 121 service. Hero for example, bridges the gap between online and physical stores, enabling customers shopping online to get assistance from in-store staff – rather than bots or call centre staff – through online chat, video, live video streaming, and photo sharing. Retailers using this tool have realised conversions and sales increases built on rapport and trust to improve results to the tune of 28% increases in basket size, 21x more likely to make a purchase and 50% more likely to keep the products they buy, reducing the cost of returns for the likes of the Ascent Group, Ulta, Nike, Levi’s and Mecca.
From a retail design perspective, it’s the human and personal touch that counts.
Whether that is real or virtual.
Best in class examples include: Google Store NYC, Hero, Nike Ask our Store Athletes.
05 EXTREME EXPERIENCES
“The debate over online versus physical in retail is over. Stores of the future will blend both and more, from social media to augmented reality features that go beyond – way beyond – sharing a selfie in the fitting room.”
(Future 100 Report, 2021).
Customers are everywhere, shopping in micro-moments, whether looking
through window of a store or through their phones. They are constantly bombarded with information, content, and distractions that retailers need to deliver WOW experiences that creates a moment of delight and memorability. What we are now witnessing is an exploration of experiential choreography including sound, smell, tactility, and touch that present products and services in an entirely new light. Clever brand experiences will awaken all our senses and
remind us of the wonder of being present in the here-and-now. That delivers true customer engagement.
From worldly escapes to restorative retreats to gamified retail, the idea of creating a sense of escapism, discovery, and wonderment in the physical world, we need to explore new approaches and techniques to create joyful and unexpected encounters. The best approaches are also often the simplest, cleverly tapping into natural human behaviour traits to appeal to our childlike curiosity and intuitive desire to touch and play.
Best in class examples include: Zhongshuge Bookstore, Uncommon Store Seoul, SEAT Spain, Gentle Monster, CAMP
06 REGENERATIVE PRACTICES
Re-commerce is one of the biggest consumer behavioural trends emerging in retail today including Reuse, Rental, Repair, Resell. As such a radical, restorative, and regenerative approach to business is emerging. As customers continue to expect brands to produce products that are sustainable and socially conscious, it’s only natural that the design of physical stores must be aligned with these values. We are seeing the creation of retail destinations where the materials, design details and energy are carefully considered. We prescribe this trend as ‘regenerative’ rather than ‘sustainable’. That means a focus on rebuilding, not just sustaining our environment and ecosystems. In every corner of retail, we are seeing advancing sustainable practices, closed loop processes and responsibly sourced materials.
Best in class examples include: Aesop Sloane Square, Levi Haus London, L'Occtaine #makingearthgreenagain Concept store Hong Kong, IKEA Retuna Sweden, House of Materialisation Berlin
Consumers are looking for seamless experiences that fully integrate into their lives. They have endless demands for brands to be excellent, innovative, and present. This extends into the functional and rational attributes like price comparison, ordering, delivery post-purchase support, choice, speed, and convenience. Yet in parallel to this there is a heightened appreciation of human connection and a spotlight on locally relevant neighbourhood experience. The ability for a brand to deliver a differentiated offering that is memorable in a sea of sameness.
People are also rethinking their material consumption habits and spending far less time in city centre locations as work becomes more flexible and remote. Consumers are placing far greater value on their mental and physical health and wellbeing, emotional fulfilment, and social and ecological matters.
As retailers, designers, strategists, and innovators, it’s our role to explore and understand what these new needs are and to reimagine the role of the store.
With 15 years’ experience in global retail trend analysis and more than 25 years commercial retail experience, the team at RetailX help retail businesses interpret, unravel, and apply upcoming trends and human-centre experiences in a way that best fits their business. It is easy to spot these changes when we reflect on retail history – and we make it our job to keep our finger on the pulse around the world. Through our relationships with other consultancy’s and on the ground experts in New York, London, Hong Kong, Australia, and LA we can use combine our knowledge and insight, with in-market capability to get right to the heart of an idea, opportunity, or development.
If it is time to explore new retail thinking in your business, give Juanita a call or email on 0274768073 or Juanita@retailx.co.nz