With the start of another year in the new normal, retailers are still questioning how to best engage with consumers in the post-pandemic world. In the past two years, consumers’ expectations and preferences have vastly changed. Today’s shopper now expects a seamless omnichannel experience, convenient delivery options and an array of sustainable products — as detailed in new research from Capgemini.
And while shoppers’ demands have evolved, unfortunately some of the same hurdles exist for retailers — namely, the never-ending onslaught of obstacles, including global supply chain delays, labor shortages and the rising cost of labor.
To overcome these challenges and make the most of shifting consumer preferences, leading retailers will let go of “how we’ve always done it” in favor of new ways to engage. Virtually every aspect of the enterprise, from product development and analytics to operations and marketing, will need to evolve in parallel with the modern market; retailers need to rethink their cross-functional operations to thrive as they progress into the future.
Here are three trends that will define the retail industry in 2022 — and likely for years to come:
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1. Expediting delivery with last-mile capabilities.
If one thing has become clear during the last two years, it’s that consumers value options for convenience. Whether it’s curbside pickup, buy online, pick up in-store or extremely fast delivery, consumers increasingly expect retailers to provide them with what they want, when they want it. Consumers demand grocers and mass merchants in particular provide these last-mile services, and it’s not without challenges, as over 40% of grocery consumers cite delivery and fulfillment services as key attributes while deciding where to shop in the past year.
By employing dark stores and automated pick-and-pack technology, among other digital solutions, grocers are able to ensure they can keep pace with shoppers’ demands and maintain their competitive edge. Other retailers are even tapping into the growing gig economy and seeking partnerships with third-party delivery companies to capitalize on last-mile operations. And though many of these tactics came about as solutions to lockdown restrictions, they will remain well into the future as companies look to win over consumer choice with fast, contactless delivery and pickup services — something consumers are demanding even post-pandemic as an enhancement to busy lives.
2. Embracing sustainable products and practices.
Convenience may be king among consumers, but sustainable products and business practices have also become top priorities for today’s shopper. Gen Z consumers are particularly interested in engaging with brands that offer eco-friendly products or promote sustainable measures. In fact, well over half of Gen Z consumers have paid a premium for organic products (72%) and items with sustainable packaging (64%) in the past year. And as the world’s largest generation — with a projected buying power of $33 trillion in the next decade — retailers are wise to take note. Offerings such as recycling drop-offs and biodegradable packaging are just a handful of sustainable practices that consumers have come to know and love — and will continue to expect.
But to truly go green and adopt the principles of a circular economy, retail leaders will have to rethink the way they run their businesses. Setting competitive prices for sustainable products and enlisting AI-enabled tracking technology to reduce waste are just a handful of measures retailers can utilize to make lasting change, and ultimately enhance consumer engagement among their growing environmentally friendly customer base.
3. Driving digital innovation.
In order to enact such sustainable practices, and even enhance last-mile operations, cutting-edge retailers will prioritize an agile digital core within their organizations. Although many retailers have strengthened their technology arsenals in response to the pandemic, a data-powered approach with collaborative views of inventory will enable retail organizations to stay ahead of the curve. In 2022, expect retail leaders to accelerate digital innovation agendas and increase investments across nearly every division of the enterprise — from the back office, with tools like predictive forecasting models, to the front office, with solutions such as in-store machine vision.
Retailers of the future will keep abreast of consumers’ ever-increasing expectations to maintain their competitive edge. By adjusting their services, products and technological capabilities according to consumers’ evolving preferences, retail organizations will not only be able to capitalize on shoppers’ shifting demands in the new normal, but also overcome the continued business challenges that will follow the industry into the future.
Lindsey Mazza is Global Retail Lead at Capgemini Group. She is a results-focused, relationship-oriented Management Consulting Professional who stimulates retailers and CPG companies to achieve seamless integration of process and technology in supply chain, sales and marketing transformations. Mazza serves clients across segments including fashion apparel, grocery, specialty goods, intimate apparel, footwear, personal care and high tech, with emphasis in the areas of AI-enabled integrated planning and execution, collaborating with clients to surprise and delight consumers from demand to receipt. Mazza leads Global Consumer Products and Retail offerings at Capgemini in Supply Chain, Marketing, Analytics and Digital Core, supporting client projects in 40+ countries.
