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Retail Insights

KrisAnne Madaus

We may have started the year with an unhealthy amount of “doomscrolling,” but this 2021 year in review reveals that we’re ending on a high note. Optimism is gaining traction—even after two years of an ongoing global health crisis.

Why? Businesses know now that there’s no “going back to normal,” and have stepped up to change the game. They’re embracing new ideas and redefining shopping as we know it by listening—really listening—to their customers.

To understand the trends of 2021 and how they’ll affect 2022, we have to first understand where this focus on the customer came from. Customer-centricity is a hugely valuable byproduct of digital transformation, which many merchants made a top priority out of necessity these past few years.

As retailers implemented advanced tech and democratized data, a wonderful thing happened—they were able to assess information holistically and build a stronger 360 profile of their customer. This wealth of data tells us that the following shopping features resonated with consumers this year:

  • Sustainability
  • Brand activism
  • Frictionless experiences
  • Flexibility
  • Curation

Let’s look at each and explore what they mean for the year ahead.

Customer Trends

Sustainability

Google’s Year in Search shows us that the conscious consumer is here to stay, with searches for “how to conserve,” “sustainability,” and “second-hand shop” at all-time highs.[¹] Pre-pandemic, these concerns were already percolating and influencing buying behavior. More shoppers turned to resale for quality, resellable items.

Then, at the height of the pandemic’s economic strain, ThredUp reported 33 million consumers shopped secondhand for the first time. [²] And now, as 2021 comes to a close, 76% of these shoppers plan to increase their thrifting spend over the next five years. It’s become clear: shoppers want unique sustainable items that won’t break the bank.

For non-secondhand retailers, this means thinking of innovative ways to meet these needs. This spring, lululemon launched their “Like New” pilot trade-in and resale program online and in some stores. Other brands bought into resale by partnering with consignment marketplaces (i.e. Walmart x ThredUp).

And ecommerce resale marketplaces, like Mercari, demonstrated that pre-loved is popular among today’s consumers. Their Reuse Report shows that resale is just getting started: the total value of the market is poised to double by 2030.[³]

Brand activism

What else did consumers love this year? Retailers that had a voice and used it.

58% of US consumers said that brand activism impacted their purchasing decisions, according to a Jungle Scout study.[⁴] In a highly polarized climate, brands that looked beyond profit to play an active role in society resonated with audiences. When a shopper cares about what a company is saying and doing, they’re more likely to purchase and remain a customer.

However, today’s consumer is savvy—they can see through the BS. While the business value of speaking up is clear, it must be done thoughtfully. Inauthentic brand activism is damaging to both brand equity and social change.

Fostering company integrity across all communications will ensure brand activism strategies ring true with audiences into 2022. The future of brand activism is authenticity.

Frictionless experiences

Clearly, the dialogue between consumers and retailers is an important part of today’s customer experience. Keeping those channels of communication open and integrated has become an expectation this year.

As a result, the omnichannel experience has become the gold standard for success in attracting and retaining customers. Not only are customers able to connect with an associate or employee at every step of their shopping journey, they’re also able to have a seamless journey no matter where they are. We’ve seen consumers shop in increasingly hybrid ways, like:

  • Discovering products in store and completing shopping online
  • Researching online and buying in store to ensure quality
  • Reading reviews and comparing products while in store
  • Buying online and picking up curbside

The result of not integrating experiences and catering to consumer expectations? Losing 9.5% of your revenue, according to Qualtrics.[⁵] Customers know that if they can’t get what they want from one merchant, they’ll easily find it with another.

In 2022, businesses will redefine omnichannel by further leveraging data to increase the effectiveness of their customer relationships. Delivering consistent positive experiences will win long-term loyalty.

Flexibility

Flexibility is a critical component of a positive customer experience. While it’s encouraging to see that spending is up since the start of the pandemic, customers remain (rightly!) wary of the future. They continue to invest in offerings that give them financial freedom and stability.

Brands that offer free cancellations, the ability to pause subscriptions, and flexible payment options saw a huge surge this year. BNPL has entered the mainstream and more consumers are adopting the service that helps them better manage their finances.

Looking ahead, flexible payment platforms like BNPL will likely innovate to further enable customers to be in control of their everyday lives.

Curation

This year, we also learned that consumers are overwhelmed by choice. Analysis paralysis led many 2021 shoppers to abandon their carts or flock to retailers with a curated stock. There’s a reason why retailers like Trader Joe’s are so popular—their limited inventory helps consumers find quality, pre-vetted products.

In addition to focusing on a curated selection of goods, merchants are also succeeding in this category by enhancing their online and in-app shopping experiences. Offering easy filtering and sorting, personalization, and shopping guides are just a few ways retailers have stepped up this year.

Because curation is tied to consumer interests like quality and sustainability as well, we’ll see a lot of these trends intertwine and evolve in years to come.

Our 2022 forecast

The takeaway: today’s customers make shopping decisions that have a clear impact, both on the earth and on their day-to-day lives.

Retailers poised to succeed in the new year will meet this need in a number of innovative ways: by offering a tailored selection of ethically sourced items, by delivering offers at optimal times, or simply by taking a stand for what they believe in. Quality products, efficient processes, and brand activism will continue to drive retail into new territories in 2022.

 


Footnotes

  1. Google Year in Search

  2. ThredUp 2021 Resale Report

  3. Mercari Reuse Report

  4. Jungle Scout Study

  5. Qualtrics

KrisAnne Madaus
KrisAnne Madaus

KrisAnne Madaus is a NY-based copy and content writer at Zip who has served various clients in the tech, data analytics, and consulting arenas throughout her writing career. She enjoys creating content that helps business leaders foster innovation in retail, ecommerce, and management.