Retailers are coming out of what has been another challenging year but are undoubtedly now optimistic and looking forward to a prosperous festive season. Early reports paint a positive picture with ONS data showing an 0.8% rise in total sales volume in October, and GfK revealing that consumer confidence is on the up.
Beyond Christmas, however, the industry still has much to grapple with. The global supply chain crisis will continue to test even the best laid plans, not to mention the ongoing ripple effect of Covid restrictions and lockdowns and Brexit. As ever, agility will be key for overcoming such unpredictable socio-economic issues, but there are several challenges that retailers can address and mitigate now.
High on the agenda for 2022 will be sustainability. More than ever before, businesses are being held to account for their impact on the environment and, with consumers becoming increasingly sceptical, retailers must make meaningful changes to the way they operate or run the risk of losing their customers’ favour and trust.
For physical retail, 2022 will also be the year to double down on the in-store experience. Despite a few big players closing stores or leaving the high street altogether this year, nearly 3,500 new chain stores opened in the first six months of 2021, reflecting retailers’ confidence in the survival of in-store shopping. However, the value proposition of the store needs to evolve, and the next 12 months will be pivotal for those continuing to invest in bricks-and-mortar. As eCommerce continues to boom, developing a complementary and consistent experience in both spaces will be essential.
Driving responsible and sustainable retailing
Perhaps the most pressing issue for the industry (and for the planet) in 2022 will be the need to reduce its carbon footprint, and to do so in a transparent way. From net zero supply chains and distribution centres, to using renewable energy to fuel retail stores, improving one’s sustainability credentials is no mean feat but retailers who don’t make headway in the next 12 months will fall foul of suppliers, governments, and consumers alike.
Slashing emissions is a momentous task but within it also lie exciting opportunities for brands to connect with their customers in new and innovative ways. In their 2022 predictions for retail, Forrester analysts expect to see the circular economy pick up pace. The circular economy, whereby products are designed for reuse or recycling, is a concept that will tick several boxes for retailers. By facilitating the reuse of products, we can cut down on waste and pollution, move closer to our sustainability targets, and support consumers on their own journey to becoming more environmentally friendly.
The latter goal of helping consumers to go green is one which will be a key differentiator for retailers in 2022. Sustainability is quickly moving up the list of purchase decision priorities for consumers, and retailers who find new ways to support eco-conscious choices will be the ones who succeed in this current climate. One need only look at the growing popularity of clothing rental businesses in recent years to understand that consumers are increasingly looking for a more sustainable way to shop. A rental service is something we are going to be developing over 2022. We are already trialling in one of our specialist stores with plans to roll this out on a bigger scale in the future.
In addition to clothing rental schemes, initiatives which help consumers to recycle old items are winning shoppers over. Take our Recycle My Gear service at Cotswold Outdoor and Snow+Rock, and Recycle My Run at Runners Need for example, where we have partnered with SOEX, the clothing re-wear and recycle company, to offer clothing and textile collection, sorting reuse, and redistribution. In fact, between launching in April and September 2021, almost 8 tonnes of consumers’ unwanted product were recycled through these in-store recycling services.
In addition, helping to extend the functionality of products is an impactful way for retailers to support consumers’ sustainability journeys. Across our specialist stores, we are helping to maintain kit with Repair & Care and Footwear Protection services. Imagine how much could be saved from landfill if all retailers made this an option for consumers, and the volume of carbon emissions that could be saved if the product is used for longer.
Retailers can also make a difference by updating in-store POS to keep sustainability front of mind with shoppers and help them to identify sustainable items. The Our Planet initiative has been introduced in Cotswold Outdoor, Runners Need and Snow+Rock: a curated collection of nearly 2000 sustainable products, based on third party accreditations that we deemed rigorous and of a high environmental standard. Each product in the collection can be identified by an Our Planet tag, a recognisable and authoritative signal for customers in-store and online that a product meets sustainability criteria.
Consider the positive impact retailers can have on their workforce’s sustainability journeys too. Across our specialist stores we offer a ‘One day for the planet’ scheme that encourages colleagues to take a day of paid leave to volunteer for a cause that benefits the environment. We have partnered with the National Trust to make this possible and employees can volunteer to help in various ways including corbelling and tree planting.
Navigating the changing retail landscape
Added to the green agenda, 2022 will also be a pivotal year for the success or failure of bricks-and-mortar stores. Although the shift to eCommerce has been a long time coming, the pandemic has had a catalytic impact on consumers opting to shop online rather than in-store. This drastic change in consumer behaviour has undoubtedly created a challenge for in-store retail, but there is still time for retailers to change the trajectory of this trend and ensure that bricks-and-mortar succeeds alongside online shopping – the two don’t have to be mutually exclusive.
Despite many notable retailers shutting up shop and switching to pure-play only in recent years, we predict to see many brands buck the trend and make even greater commitments to physical stores in 2022. The fact that Amazon, which was hugely successful as pure-play only, has opened its first non-food bricks-and-mortar store in the UK, positively reinforces that physical retail still has so much to offer.
So, how can retailers increase in-store sales and avoid becoming yet another cautionary tale? Greater consistency between channels will be key for customers who are now so accustomed to the seamless digital processes of online shopping. Retailers will need to capture the intuitive and effortless experience of online in their stores and make product discovery as simple as possible for customers. New technologies are coming to market regularly and teams should explore how these innovations can create a superior omnichannel experience and help them gain a competitive edge.
While digital experiences will attract customers and offer them the best of both worlds, retailers should not forget the influence and power that in-store staff hold when it comes to fostering shopper loyalty. It’s a well-known truth that the personal touch and customer service experienced in store is crucial, but it’s a key part of operations that is often overlooked.
Across our specialist stores, a customer’s experience is much more than simply buying a product – it’s also about the expert guidance and personal service they receive whilst shopping. By offering in-store expert fitting, for example, we are making in-person shopping more appealing and valuable for consumers. Looking ahead to 2022, we are investing heavily in training our in-store colleagues and committing to taking the customer experience one step further. Spaces will become more flexible to ensure stores can offer a more premium experience, and this versatility will allow for more in-store services.
What retailers also need to focus on in 2022 is building talented and motivated in-store teams who are passionate about the brands they represent. With the ‘Great Resignation’ and talent shortage affecting the retail industry, this won’t be as simple as years gone by and retailers will need to develop recruitment strategies which ensure staff are fulfilled in the long-term.
Across our specialist retailers, staff come on board because there is an opportunity for them to turn their hobbies into careers. By nurturing their passions, we build a positive and fulfilling atmosphere in our stores which radiates to our customers and greatly improves the in-store experience. Aligning staff’s hobbies with your brand may seem like something only possible for specialist retailers but think more broadly about matching a brand’s values with employees’ and any retailer can take this approach. For example, when you go into Cotswold Outdoor, you know that there is a knowledgeable expert who shares your interests and can help you to navigate product features and make tangible recommendations tailored to your needs.
If 2021 was characterised by the agility that retailers displayed, then next year will be defined by the industry’s commitment and determination. Those who commit to sustainability goals, omnichannel offerings, their teams, and ultimately their customers, will be the success stories of 2022.
Jose Finch, managing director of Cotswold Outdoor, Runners Need and Snow+Rock