In most parts of the world, lockdowns have ended, and retailers are once again free to choose their opening hours and serve customers as normal. So, now is the perfect time to look at the state of retail.
A lot of what is happening in 2022 is related to the pandemic
As you will see, much of what is happening in the sector, right now, has its roots in the challenges the industry faced during the pandemic. The sector had to change fast and learned a lot.
Big retail took big hits
When governments announced lockdowns, many expected a lot of small retailers to have to shut their doors for good. What many did not anticipate was that some of the biggest stores would also go bankrupt.
In America, Ascena Retail which was founded in 1962 went bankrupt. They sold all their women´s fashion brands and closed all 2,800 of their stores.
They also lost some huge department stores. Including, Belk which was founded in 1888, and Century 21 Stores which was established in 1961.
It was tough to see, but it has created an opportunity for new retailers to step into the breach. So, during 2022, you can expect to see new brands appearing and growing at a rate that we have not seen for decades.
Customers are desperate for good service
Consumers know that retailers are facing some big challenges and are, to some extent, sympathetic. But they are also seeing it as an opportunity to flex their muscles a bit and demand better service. This is demonstrated by the finding of Mandoe Media’s current state of retail survey.
They interviewed hundreds of consumers from the USA, UK, and Australia and virtually all of them said that they really valued good service. This was especially important to Australian consumers. Sixty-six percent of them said that customer service was an important part of their in-store experience.
Recruitment is a challenge for retail in 2022
Retailers are very aware of this, but some are struggling to deliver. Largely because since the pandemic, it has become far harder for them to recruit and retain staff. For example, Office of National Statistics data shows that 15% of UK retailers are unable to hire enough people.
An awful lot of people left the industry, during the pandemic. A significant percentage of those people were immigrants who no longer wanted to live so far away from their families. They left the UK and many of them have not yet returned. Others left because of the stress of working in the industry during CoVid.
In addition, tens of thousands of the people who worked in smaller stores that were not essential were furloughed. A significant percentage of them took stock of their lives and decided that they no longer wanted to work in retail. They took the time they had off from working and used it to retrain.
More reliance on technology
As a result of staff shortages, many retailers are re-thinking the way they use technology. Suddenly, equipment and systems that were too expensive to be used before are now turning out to be essential.
US retailers spent a staggering $218.5 billion on installing new technology in 2021 and look set to spend even more by the end of 2022. In the past, they invested mainly in tech to use behind the scenes in their warehouses and other elements of the supply chain.
Now, they are starting to roll out shopfloor technology. It is no longer unusual to see robots scanning the aisles looking for out of stocks, bringing staff cases of products to put out, and cleaning up spills. There are digital screens everywhere, touch screen customer service kiosks, and smart checkouts.
Offering customers more ways to buy
The pandemic pushed retailers who were not yet online to set up websites and start selling that way. Many also started to offer home delivery and curbside pickups, expecting to stop doing so once things returned to normal.
Much to their surprise when they tried to withdraw those services, customers protested. This has got retailers thinking proactively and coming up with new ways to serve their customers. They are setting up vending machines so they can offer core lines 24/7, selling some products lose, offering personal shopping services, and more besides.
In many parts of the world, inflation is at the highest it has been in decades. This is leading to consumers being much more cautious about spending money. So, in all likelihood most of the changes retailers will be making during the second half of 2022 will be related to offering their customers more for less.
