The retail trends of 2022: Tech transformation or digital disruption?

Trend 1: Digital comes to the high street

It feels like we’ve been warned for years now: digital will be the death of the high street.

But actually, when predicting the retail trends of 2022, the landscape for post-lockdown shopping looks a little less black and white.

Take Amazon for example. Long-predicted to kill the humble high street retailer; the eCommerce megacorp has in fact joined them.

After launching its first Amazon Go store in the UK last March; a cashier-less grocery shopping experience built around hidden sensors instore; the online retailer followed by opening its first non-food, physical UK outlet in October.

But there’s a twist.

The Bluewater branch of Amazon 4-Star only stocks a curated selection of items based on 4 and 5-star customer reviews. 3.9 million of them, in fact.

In 2022, the concept of “brick and mortar” isn’t dead; it’s simply evolved.

However, we understand that this is an extraordinary case in very trying times. Amazon was one of the few companies that actually profited during the pandemic; it reported revenue of $386 billion in 2020 (up from $280.5 billion the year before).

The majority of modern retailers — whether they’re physical or online — don’t have the luxury of enormous innovation budgets. To make matters worse, 2022 is being billed as the “year of the squeeze” by think tank the Resolution Foundation. With wages set to stagnate and families facing a typical income hit of around £1,200 a year due to tax rises and soaring energy bills, retailers are facing insurmountable challenges to entice online and offline shoppers alike.

But it’s not all doom and gloom for the retail sector.

According to forecasts from Retail Week, the overall UK retail market is expected to grow by 3.3% this year — caveated by uncertainty around the pandemic’s trajectory, of course. Unsurprisingly online is expected to play a huge part in this. Cue, the online checkout transformation.

Trend 2: Streamlined checkout processes

Online has been a saving grace for many retail categories over the past couple of years. And in actual fact, further growth is expected in 2022; online sales are predicted to grow by 8.9% (accounting for 32% of total retail sales).

“We expect to see a continued growth in digital and the use of mobile to allow customers to purchase the products they need at the touch of a button, for click and collect and super-fast delivery,” predicted Screwfix chief executive John Mewett in Retail Week’s 2022 forecasts.

Some experts believe this “click and collect” mentality will continue to dominate retail in 2022. But with more and more retailers adopting the model going into the new year, how well the “click” works has never been so important. When it comes to eCommerce, every second counts.

According to SEO guru Neil Patel, 40% of people abandon a website that takes more than 3 seconds to load. Even more alarming is the fact that a 1-second delay in page response can result in a 7% reduction in conversions.

And what’s the most crucial time for customers to get second thoughts?

The checkout, of course.

According to research by Baymard 18% of the 4,329 US shoppers who responded to the survey, abandoned an order due to the checkout process being “too long” or “complicated”.

Unfortunately, with Amazon’s one-click purchasing, the bar’s been raised to unimaginable heights for retailers — and consumer expectations are high.

However, even small improvements can go a long way. For example, further UX research from Baymard revealed the average checkout to contain 14.88 form fields — that’s twice as many as there needs to be.

eCommerce sites like ASOS have hit a happy medium. If you’re new to the store you can sign up via Google or one of your social accounts and consequently check out in minutes.

So, smaller online retailers will need to ensure their sites follow suit in 2022 to stay ahead. Looking at the checkout process and making small changes will go a long way. These could be relatively minor website iterations such as:

• Adding an auto address finder so customers don’t need to add it manually
• Keeping delivery options and payment details all on the same page
• Removing lengthy account creation or sign-up forms
• Aiming for a speedy three-step process so that customers commit to their cart

It may be the last part of the journey but, in 2022, the checkout process can’t afford to be an afterthought.

Not sure why customers are abandoning their carts? Book in a round of usability testing this year and you’ll soon get the answers you need. Real people, using real devices, in real-world scenarios.

This leads us to 2022’s next eCommerce trend…

Trend 3: Mobile devices will continue to dictate the pace

Statista’s mobile commerce statistics suggest that in 2021, 72.9% of all online sales came through the mobile channel — increasing from 70.4% in 2020. It’s amazing to think that mobile is now making up nearly three-quarters of all online sales.

For retailers to stay front-and-centre in their customers’ minds this year, they have to focus on creating exceptional mobile experiences for them. But with upwards of 60,000 possible combinations of browsers, operating systems and smart devices in the world to shop on, ensuring every customer is getting the same great experience is no easy feat. Consequently, that’s why it’s so important that online retailers ensure cross-browser testing becomes a regular part of their QA strategies this year — if it isn’t already.

Using our Convert tool, retailers can quickly identify if a particular device, app or other digital touchpoint is costing them revenue due to not being optimised properly. Not only that, it prioritises issues that could have the biggest impact — ideal before major online retail events like Black Friday, Cyber Sunday and the January sales. Importantly, it analyses eCommerce data at a granular level — a must in 2022 and going forwards.

But it’s not just the digital experience that retailers must focus on. In 2022, it’ll be about striking the perfect balance between on-and-offline shopping.

Trend 4: Hybrid working leads to omnichannel experiences in retail

According to a report by Accenture, 83% out of the 9,000 workers surveyed wanted to continue working in a hybrid model going forwards.

So it makes sense that when it comes to the debate about physical vs. online, 2022 could see consumers expect the same interconnected experience when shopping as they do at work.

In fact, The KPMG/Ipsos Retail Think Tank (RTT) — a group of retail specialists from consultancies, banks and research houses — predicts that 2022 will demand retailers converge on online and physical shopping.

James Sawley, head of retail and leisure at HSBC UK and RTT member, believes the shift to hybrid working will have a positive impact on several retail categories in 2022 and beyond.

“Hybrid working isn’t going away and, whether that means working from home one day or two days a week, consumers will be spending on average circa 15% to 30% more time at home,” he said ( as reported in Retail Week).

But when customers do venture out into stores, they’ll be expecting something a little bit extra from retailers.

Especially if you’re part of a younger demographic.

Because the Consumers Want It All report from IBM/BRF revealed that hybrid shopping is the primary buying method for 27% of consumers and 36% of Gen Z-more than any other generation.

“Streamlining and digitising the store experience, while also integrating digital and in-store experiences is vital,” argues Kate Birch at Business Chief.

Now’s the time for retailers to look at integrating their digital and physical operating platforms so they can meet the expectations of the modern consumer. This includes digital tools like in-store self check-out, click and collect and mobile contactless payments; no longer “nice to haves” but necessities in 2022. But according to Birch, the key to success is about learning which in-store touchpoints are important for different customer demographics and making real-life changes to suit them.

“This requires robust customer data platforms that collect and analyse information from internal and external sources to help retailers take action regardless of channel, and also help them personalise the shopping experience,” she said.

Because consumer behaviour is changing — whether we’re ready for it or not.

Essentially, the richness of your data in 2022 is just as important as the quality of your products. And with more retailers harnessing the power of analytics — all whilst creating omnichannel strategies to enhance customer experiences — the future of eCommerce is set to be powered by intelligence.

Trend 5: Artificial Intelligence is now — not the future

According to insights from Meticulous Research, the use of artificial intelligence in the retail market is expected to grow and reach a value of $19.9 billion by 2027.

But we’re not talking about current applications of the technology; widespread use of customer service chatbots and voice search is becoming more and more common in the industry.

Instead, concepts that were once seen as “sci-fi” in shopping are actually becoming retail realities. Again, it’s the megacorps that can afford to innovate; attempting to cause a technological paradigm shift in the sector.

Recently, Google introduced its Vertex AI Forecast. This is a tool that uses AI to help retailers generate more accurate demand forecasts.

“ Demand forecasting can have a significant impact on a retailer’s business; factors like supply chain fluctuations and growing global markets can make it challenging to keep inventory in stock,” says Stephanie Condon at ZDNet.

This tool is looking to change that. It works by ingesting historical data of thousands of product lines on a massive scale; the tech can handle up to 100 million rows from BigQuery or CSV files. Then, the tool automatically processes the data and evaluates hundreds of different model architectures to create one that’s easily manageable. Users can include up to 1,000 different demand drivers, e.g. colour, brand, eCommerce traffic statistics, etc. and quickly set budgets to create the forecast.

Simply put: it’s a game-changer for stock handling.

And for the consumers themselves, Amazon Style promises to create a more personalised and tailored experience for clothes shoppers. To do so, it’ll use machine learning algorithms to produce tailored, real-time recommendations for each customer whilst they shop.

Using the Amazon Shopping app, customers can send items they’re interested in straight to the fitting room. There they can use a touchscreen to browse and rate items — or request more sizes or styles that will be delivered to them in minutes.

Convenient or creepy? That’s for you to decide. But however you feel about this level of personalisation, it’s in the works and likely to turn the industry on its head.

Then again, that’s if we end up visiting physical retail stores at all.

By 2031, Mark Zuckerberg plans to have signed on a billion users to the Metaverse. And if this virtual reality platform proves as successful for retail advertising as his day job — Facebook ad spend reportedly reached $25.56 billion in 2019 — we could soon find ourselves shopping for our digital avatars instead. The 11,000,000 monthly players of Animal Crossing proves it’s not beyond the realm of possibility. In fact, virtual shopping in augmented reality might just become one of the next big industry trends in retail.

Watch this virtual retail space…

Interested in chatting about retail tech trends, or perhaps you’re wondering how testing your website can lead to better conversions? Get in touch.

Originally published at https://www.digivante.com on February 3, 2022.