The Brave New Retail World Begins in 2022
From a global pandemic to phases of reopenings and lockdowns and supply chain issues – all in the span of just two years – there finally appears to be a permanent light at the end of the tunnel.
Retailers have never had to adapt so quickly to stay in business. Some thrived and some fell. And even companies that thrived during the pandemic like Peloton, are now facing an uncertain future – ironically as things get better.
So, what insights can we glean for 2022 as we emerge from this chapter of unprecedented retail challenges? Here are three things we’ve learned that can help your business stay competitive in this brave new retail world.
1. Convenience is no longer just king, it’s the emperor
Speedy delivery and turn-around times used to be a nice to have, but retailers that were able to step up and offer same-day delivery and/or pickup like Hudson’s Bay, gained a competitive advantage. Now customers expect it, so bolstering your ability to fulfill orders quickly will be critical.
The ship-from-store model also took off as it allowed retailers to fill orders faster from local stores rather than a distribution centre. So, look for ways to improve your turnaround time because you can be sure your competition is already doing so. It may sound obvious, but how many retailers have robust systems that allow customers to buy online and pickup within an hour or few?
But gaining a convenience advantage is more than just fast delivery times. Last year PepsiCo paid attention to consumer trends and launched snacks.com in just 40 days. Why? “People couldn’t go to work, so they took their meals home – and they liked it. That’s sticky. They’re also having their snacks at home,” explained its CEO, Steven Williams, at the 2022 National Retail Federation. By paying attention to trends, you too can capture market share by offering more convenience to your customers.
2. Be ready for pent-up demand to pop
When we first tried to reopen in April 2021, payment processor Moneris saw retail sales volume grow by 15% and restaurant sales jump 35% compared to 2020. Then when we tried to reopen between July and September with travel restrictions eased, plane ticket purchases mooned by 282% over the previous year.
Now that an end appears to be in sight, the vacation space will likely see explosive demand as people, grounded for the last two years, rush to get their travel fix. Experienced-based spending such as amusement parks, bowling alleys, movie theatres and concerts should also see huge growth according to Moneris.
But just because you don’t sell airline tickets (or maybe you do and can prepare to find fast-selling tickets for the anticipated wave of travelers), doesn’t mean you can’t take advantage by thinking outside the box. Will there be a surge in luggage and travel accessory sales? Will bathing suits and selfie sticks be in high demand for beach trips and visits to iconic landmarks?
“If it isn’t broke, don’t fix it” adage no longer applies in today’s retail landscape. The last two years have taught us that consumer trends can swing wildly. Be aware, agile and ready to adapt to stay competitive. It may be harder than ever to stay relevant, but the opportunity to stand out from the competition has also never been greater.
3. Think ahead of continuing supply chain issues
While it appears supply chain issues are getting better, most experts expect them to persist into 2023. Naturally, you want to order early and order more, but how much more is the big question. If you haven’t already, invest in the right supply chain and inventory technologies. This can help you stay on top of your inventory, flag hot products for larger orders and keep you on top of stock levels with suppliers.
It’s also important to diversify your supply chain where possible so you have multiple options in the event of a shortage. Last year the 2021 Zip Canada Holiday Spending Report revealed that more than half of Canadians planned on getting their holiday shopping done by Black Friday/Cyber Monday. With the world going back to normal and supply chain issues expected to still be a factor in 2022, it could push consumers to shop even earlier to avoid missing out.
Expect the unexpected
These are just a few insights we believe can help retailers prepare for what will undoubtedly be an eventful retail year. CIBC said in its February 2022 report that due to the pandemic curtailing overall spending, Canadians could be sitting on as much as $100 billion in cash. CIBC expects that once things get back to normal, Canadians will unleash this pent-up buying power very quickly. And when they do, the retailers best prepared for the unexpected will come out on top.