As we move into 2022, the global pandemic, which is still ongoing, has brought seismic changes to the world of retail. Online, retailers are busier than ever and challenged by the need to fill orders and refresh inventory at an increasingly rapid pace, as well as reduce revenue and wastage caused by returns. Offline, in the world of malls, high streets, and bricks ‘n’ mortar, the challenges are very different, as retailers face declining footfall and the need to compete with global e-tailers on convenience as well as price.
It's clear that even in 2022, customers still want in-person retail, particularly when it can be augmented with technology to create new experiences and match the convenience factor of online shopping. Creating hybrid shopping experiences like “buy-online-pickup-in-store” and developing omnichannel capabilities is the name of the game now, so here’s what I predict will be the hottest trends in shopping and retail over the next 12 months:
Pioneered by Amazon, which launched its first Amazon Go cashier-less store back in 2018, the model has proved successful, and it is now being rolled out by an increasing number of retailers. These stores use cameras and sensors to track shoppers’ activities as they remove items from shelves and place them in their bags, and automatically bill them when they leave the premises. Initial use cases were limited to small convenience stores, but during 2022 we can expect to see it rolled out into full-sized supermarkets, thanks to companies including Tesco and Aldi throwing their weight behind the idea.
Of course, the idea is clearly controversial as, on the face of it, it involves replacing human jobs with automated ones. McKinsey estimates that replacing a retail employee with automated technology costs between 20% and 30% of the human worker’s salary, so there would seem to be an obvious incentive for profit-oriented businesses to cut their workforce if the technology is available. However, the counter-argument is that automating mundane work like scanning groceries at a till will free up humans to do more rewarding tasks rather than simply replace them. This makes the problem a societal challenge as much as it is a business one, meaning society at large – including legislators – will need to cooperate on the solution rather than simply leaving it in the hands of corporations. We can expect this discussion to become increasingly prominent in 2022 and as the decade rolls on.
Experience is increasingly becoming an important differentiator for consumers when it comes to making decisions about who they will give their custom to. While previously businesses expected to compete mainly on products and price, today factors such as customer service, accessibility, ease of use, knowledgeability of sales staff and any number of “ambient” factors such as the décor of retail outlets or the design of e-commerce sites play a part in customer decision-making. Experiential retailing, from a technology point of view, is about understanding the role that these factors play and putting measures in place to track and optimize their impact. For example, in bricks 'n' mortar stores, sales assistants can be equipped with hand-held terminals that can give them information on customers' shopping habits and past purchases, allowing them to provide "personalized" shopping experiences much as they would receive online.
Experiential retailing involve working with any of the other trends mentioned in this article, as all of them can impact customer experience. For online retailers, the focus in 2022 will most likely be on creating new ways of connecting with customers – for example, online chatbots or one-to-one video chats between customers and sales assistants where the latest products can be examined and demonstrated. There will also be efforts to meet growing customer demand to get "hands-on" with products in a virtual environment, and augmented reality (AR) and virtual reality (VR) will play a part here. For example, virtual fitting rooms allow customers to “try on” clothes using AR. BMW offers a virtual viewer that allows potential buyers to examine their cars and even see how they would look parked outside their own homes. Virtual showrooms, on the other hand, allow customers to examine and interact with products in virtual reality, such as this one created by Walmart.
When it comes to delivery, the “last mile” is often the most expensive leg of the journey. So it makes sense that this is where many retailers are focusing their efforts when it comes to autonomous delivery services.
Robotic delivery business Starship has carried out 1.6 million deliveries since launching in 2016, and next year will expand its operations into more US and mainland European cities. They have already become a familiar sight for me when I go for a jog in my hometown of Milton Keynes, England!
To be honest, it will not be surprising if Amazon's long-promised drone delivery service still does not arrive in 2022 (it was initially promised for 2018 but has been continually delayed). But in the meantime, other companies have been quick to pick up the slack. Alphabet’s Wing drone delivery service has been trialed in Australia during 2021 and may expand into full operation in 2022, having successfully delivered 10,000 cups of coffee without a single mishap or accident, according to the company. Back down on the ground, Starship competitor Udelv, which also carries out autonomous deliveries via machine learning-powered bots, has announced that its autonomous multi-stop cables transporter will be unveiled in 2022. This self-driving vehicle travels on highways and is planned to be the first with the capability to make multiple deliveries – up to 80 - in one journey. Also launching next year is mobility experts Segway's partnership with the LA start-up, Coco, a robotic delivery service. It’s looking like 2022 will certainly be an eventful year for autonomous delivery technology.
Social and omnichannel commerce
In retail, "omnichannel" means using all of the avenues available to reach customers and provide services – and increasingly, this means social media and social selling. However, rather than simply letting customers connect and buy through any channel – offline stores, websites, Facebook, Instagram, etc. – it means offering a "joined-up" experience. For example, a customer might want to place an order for an item through a business’s e-commerce site, then check the status of their order via Facebook messenger, and then pick it up in-store when it arrives.
Providing a coordinated customer experience across all of the channels – and new ones like metaverse or extended reality, as they become available – is the key to capitalizing on this trend. Brands will also put an increased emphasis on social selling. This encompasses all the ways that social media can be used to create direct selling opportunities, either through establishing new sales portals, promoting products on existing channels, or collaborating with influencers and brand ambassadors to build entirely new revenue streams.
To manage the technology side of this, retailers will look to deploy “headless” architecture – an e-commerce infrastructure that separates customer experience such as UI and front-end from the back-end transactional and inventory management processes. This enables a far more agile approach to omnichannel selling by encouraging “plug-and-play” functionality whereby retailers can easily add, for example, voice control, chatbot, text message ordering, or whichever new user experience or sales technology functionality they want to build into their stack.
Resilient and secure retail
Given everything that has occurred over the last two years, it isn’t surprising that resilience is a key buzzword in all areas of B2C operations going into 2022. Particularly in offline retail, covid (and other possible future pandemics) security is a hugely important element of this trend. For example, we can expect to see technology deployed to encourage and monitor social distancing, such as the Voxel51 platform that uses computer vision to monitor traffic footfall and warn of dangerous build-ups in congestion in crowded areas. Another solution, created by Wipro, uses heat vision to monitor the temperature of people in crowds, potentially providing early warning of viral infections. It can also monitor compliance with facemask regulations.
Resilience is also important in the face of global disruption to supply chains that have caused business disruption and supply shortages in recent times. In 2022, we will see an increase in the deployment of technologies like artificial intelligence (AI) and blockchain to create more robust and trustworthy supply chain processes. Although these won’t necessarily make companies entirely immune from disruption by volatile world events, they make it more straightforward to trace the source of disruption when it occurs and put measures in place to mitigate damage. They will help identify opportunities to build in redundancy, such as building alternative backup supply chains, as well as areas of business that can be moved closer to consumers, in order to further reduce risk when things outside of a company’s direct control break down.