This is a year of bold change for retailers. Consumers continue to grapple with the lingering effects of the pandemic, including supply chain hiccups and other shifts that are changing the way they buy. As behaviors evolve, consumers expect more from retailers — way more. "We are all designing for a new kind of customer," notes trend forecasting company WGSN^[1].

Among the changes we'll see in 2022, retailers can expect five themes to impact brick-and-mortar sales.

Physical stores evolve to curate experiences and complement digital journeys

As physical and digital worlds merge, physical spaces will need to change accordingly, say researchers. To differentiate themselves, retailers should consider how physical spaces fit with their omnichannel strategy and what purpose they serve — whether it's service fulfillment, marketing, customer acquisition or else^[2].

Already, many online retailers are opening physical locations to drive customer discovery and connection^[3]. They're on to something: More than buying products, consumers are buying experiences, with millennials leading the charge^[4].

Consumers seek to decompress and heal — even while shopping

After a couple of stressful years, consumers are prioritizing mental, physical and emotional health, dedicating time to feel and heal. Simplicity matters to 2022 shoppers, as does calm shopping experiences. In the months ahead, WGSN recommends creating calming, in-store environments and products designed to alleviate stress and anxiety^[5].

At the same time, a new consumer cohort is emerging, ranging from Gen Z to baby boomers. The New Optimists, as WGSN calls them, are characterized by a big appetite for joy. WGSN recommends creating products and services that promote joy and celebrations and embracing the "power of the pack" by leveraging hyper-local, last-mile deliveries like festivals, outdoor venues and sporting arenas^[6].

Shoppers look for retailer exclusives

Private label sales (retailers' own product lines) are soaring, selling three times as much as branded products. Nearly two-thirds of consumers think private labels are a great value for their money. Retailers, in turn, earn an average of 25% more for private label products^[7].

It's no surprise, then, that private label market share is expected to grow to 25% in the next 10 years. You can thank millenials for that: A millennial's typical shopping cart has 32% private label items, compared to the average 25%^[8].

Consumers favor inclusive, sustainable brands

Consumers are growing more concerned about social justice, inclusion and climate change, and are willing to switch to brands that are more in sync with their values. It's not enough to slap a "we're green" or "people above profits" labels on stores or websites. Rather, consumers want to see retailers take meaningful steps, such as hiring diverse workers and focusing on mental health, carbon labeling, comprehensive recycling and ethical product sourcing^[9].

That's especially true of younger shoppers. Nearly all (94%) Gen Z shoppers expect companies to take a stand on important social issues, and 90% say they are more willing to purchase products that benefit society^[10].

Shorter trips, local tourism grows as travel risks linger

The farther you travel, the less secure you might feel, especially as new virus variants arise. Searches containing "getaways near me" have increased by 100%, and searches containing "open now near me" grew by 40% between September 2019 and August 2021, reports Google^[12]. That's good news for local merchants.

Increasingly, forward-looking retailers are viewing consumer drive time as a largely untapped opportunity to sway consumers at the moment they're making shopping decisions, before they pull into a competitor's parking lot. Waze data supports this, with 140 million active users interacting with the navigation app each month, driving an 18% increase in trips to retail locations that appear on the Waze map^[13].

"Waze drives more than one billion trips to retailers each year," says Liz Franz, Head of Retail Industry for Waze^[14]. "We offer advertisers the opportunity to engage with drivers on our platform and then understand the impact their advertising had on driving incremental in-store visits."

Steven Swann, President of Kentucky-based Florence Hardware, has seen the impact of location-based, in-car advertising first-hand. "Our walk-in traffic has been absolutely numbers-shattering compared to anything before," he explains in a case study featured by Waze. "Marketing is kind of a hard metric. People are coming in and saying, 'I found you on Waze.' If someone is getting directions here, that's a true hard measurement."

The year to be bold

Cross-channel experiences, greater convenience and commitment to their values. Though once considered lofty ideals, these factors are quickly becoming baseline consumer expectations. The good news is that this new landscape is rife with opportunities for retailers to stand out, attract new shoppers and outperform competitors.

This is a year to be bold, Forrester Research asserts: "The future is up for grabs"^[15].

Sources

[1] "Future Consumer 2022." WGSN, 2021, URL. Accessed 16 December 2021.

[2] "Key Topics for the Upcoming Year in Retailing, Travel and Foodservice." Euromonitor International, 4 August 2021, URL. Accessed 16 December 2021.

[3] Ibid.

[4] "10 Future Retail Trends & Forecasts for 2011/2022 – A Look Into What's Next." Finances Online, 2021, URL. Accessed 16 December 2021.

[5] "Future Consumer 2022." WGSN, 2021, URL, Accessed 16 December 2021.

[6] Ibid.

[7] "10 Future Retail Trends & Forecasts for 2021/2022 – A Look Into What's Next." Finances Online, 2021, URL. Accessed 16 December 2021.

[8] Ibid.

[9] "Five Key Emerging Retail Trends to Watch in 2022 and Beyond." Retail Insider, 6 September 2021, URL. Accessed 16 December 2021.

[10] "Authentically inclusive marketing." Deloitte, 19 October 2021, URL. Accessed 16 December 2021.

[11] "What will it take to go from 'travel shock' to surge?" McKinsey, 23 November 2021, URL. Accessed 16 December 2021.

[12] "Year in Search 2021: Redefining Normal." Think With Google, December 2021, URL. Accessed 16 December 2021.

[13] Waze Internal Data, 2021.

[14] Waze Internal Data, 2019.

[15] "Predictions 2022." Forrester, October 2021, URL. Accessed 16 December 2021.