The Future of the Retail Industry

The industry continues to evolve with significant increases in e-commerce and trends in omnichannel shopping experiences. 2022 is the year that brands will capitalize on direct-to-consumer strategies, rely more on first-party data and respond to an imperative for supply chain efficiency.

Here are a few of the macro trends that will shape the retail industry in 2022.

Direct-to-consumer (D2C) retail strategies

A Capgemini survey found that more consumers shifted to D2C for the better buying experience (60%) and the access to brand loyalty programs (59%). As a result, this year will see more legacy brands move to D2C, contributing $151.20 billion to the U.S. ecommerce sales in 2022, 16.9% up from last year.

Meanwhile, GfK’s What’s Next 4 Consumers study found that in 2021, 62% of US consumers tried a D2C brand and 70% of consumers switched from traditional brands to D2C offerings in at least one category. About 40% of U.S. consumers intend to buy more D2C products and services once lockdowns and restrictions are lifted. Clothing and fashion were the most popular D2C category consumers tried last year.

Relying on first-party data

According to KPMG, 86% of U.S. consumers are increasingly concerned about data privacy, moving companies such as Apple and Google to implement privacy protection measures, and requiring marketers to shift to first-party data. Likewise, web browsers Safari and Firefox block third-party tracking cookies, and Google will phase out cookies on Chrome in 2023.

Marketers must find new ways to reach prospective customers, such as first-party data, to gain insight into the behavior of target consumers. Other approaches include loyalty programs, newsletters, polls and QR codes.

Supply chain efficiency

Mobile and IoT device management company SOTI found that 57% of global consumers experienced items not being available and had to purchase alternatives or go to different retailers to find items in stock. Over 35% of shoppers indicated items they wanted to purchase have not been available at all. These supply chain disruptions affected 57% of companies surveyed by Ernst & Young, with 72% of these companies reporting a negative effect.

To mitigate the major pandemic-driven stresses on the supply chain, retailers will focus on improving the overall efficiency of logistics, from product quality control to inventory levels, shipping and cost reduction.