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Rising from the ashes: How retailers can come back even stronger in 2022

By Kamran Iqbal, commerce strategist at PFS

If 2020 was the year of unprecedented events, then 2021 was the year of the aftermath. Even at the beginning of the year, when we hoped the worst of the pandemic was over, lockdown restrictions stopped many retailers and brands in their tracks. For those with a physical-only presence, the continued closure of stores proved crippling, whilst for others, the turbulent economic climate stifled plans for expansion and growth. 

The pandemic, however, wasn’t the only beast that retail had to contend with, as the realities of Brexit soon kicked in, and supply chain disruptions and labour shortages began to take their toll. The “pingdemic” continued to add fuel to fire in this instance, with distribution networks feeling the strain as more and employees received notifications to self-isolate. Indeed, it was reported that during this time, retail stocks hit a 38-year low. 

Complicating matters further were the knock-on effect both events have had on today’s consumer, whose expectations have grown substantially during this time – forcing brands to rapidly adapt to keep up.

As we head into 2022, retailers and brands can choose whether they sink or swim in this new age of ‘digital-first’ retail. For those who act now and set about putting the right strategies in place, the opportunity to rise from the ashes and come back even stronger in the year ahead is an exciting one. 

“Out of adversity comes opportunity”

This is a phrase we all know well from the famous Benjamin Franklin; however, it can often be tricky for retailers to realise the opportunities on offer amidst so much disruption. Brands must grasp these by taking a closer look at the wants and needs of today’s consumer and responding accordingly. After all, the success of retail is driven by the consumer and due to the sheer amount of choice available, loyalty is growing increasingly fickle. 

There is a lot to be learnt from the events of last year, and how this impacted consumers. For example, according to PFS’ research, during lockdown, 80% of consumers revealed they missed at least one aspect of the shopping experience while shopping online. Of these, the most missed facets of in-store shopping were not being able to physically touch products (43%), as well as testing certain items (41%) for suitability across variables such as size or colour.

These findings highlight an urgent need for brands to challenge the core functions of the physical store and provide the hybrid offering that consumers are now demanding. By converting physical locations to places where consumers can try, test, and “experience”, whilst enabling a seamless connection for customers to then place orders online, retailers are more likely to meet these future demands.

Looking out at the “greener” landscape 

Another legacy of 2021 has been the so-called “conscious consumer”. Emerging from the pandemic, consumers are now more aware of the impact of their shopping habits on the environment around them. Where lockdown allowed consumers to reflect on and re-evaluate their shopping habits, 48% of UK and US consumers reported being more conscious of how their online shopping behaviour impacts the environment than before the COVID-19 pandemic. Furthermore, over half (54%) agreed they’d support and shop with brands committed to carbon-reducing delivery options, even if the delivery timescale was longer.

In the year ahead, conversations around sustainability and the environment will only continue to soar. Rather than being another hurdle to jump, brands should be viewing those conversations as another opportunity to solidify loyalty and grow their customer bases. For those who build an eCommerce strategy with this as the foundation, reinforcing their support for customer desires to shop sustainably, this can serve as a competitive advantage. On the flip side, those who ignore this growing trend risk falling out of touch with today’s conscious consumer and behind the competition. 

It’s time to unleash the eCommerce arsenal

For 2022, retailers and brands must focus on the key driving forces behind customer purchasing decisions. Whether this is based on sustainability, or a preference for online vs offline channels – ultimately consumer preference comes down to 3 factors: cost, convenience and choice. Flexibility has never been so important, and retailers should offer consumers the ability to shop in not just the way they prefer, but the way they feel most comfortable.

That said, providing this is no easy task. It requires brands to equip themselves with a whole range of tools. Only then will they be ready to take on what 2022 has in store. Here are just a couple of solutions and strategies retailers should consider pulling from the eCommerce arsenal:

  • Embracing omnichannel: The first port of call for brands and retailers in 2022 is to move towards a hybrid model, as outlined earlier, where online and offline offerings work hand in glove. If any assurance was needed, we need only look at statistics from last year’s post-peak season that highlight the success experienced by retailers that had invested in omnichannel infrastructure. For example, it was found that two-thirds of retailers (67%) who invested in BOPIS capabilities saw an increased sales volume. Likewise, curbside pick-up led to the next strongest performance with 55% of retailers reporting increased sales. 
  • Diversifying fulfilment operations: The next stage of growth for online brands will be hinged on identifying alternative distribution and fulfilment infrastructures and utilising them to ensure consumer demands can be met effectively. This year saw a chronic shortage of warehouse space in the UK, which threatened to stunt the growth of brands that did not have adequate capacity in this area. For brands bearing the brunt of this shortage, temporary fulfilment can offer a more permanent solution. Pop-up distribution centres (pop-up DCs), due to their flexible nature, can be quickly and easily implemented, whilst being a cost-effective option during periods of uncertainty.
  • Placing customer experience at the heart: Next, inspired by the barrage of supply chain disruptions experienced this year, investing in the contact centre must become an integral part of any brand’s 2022 eCommerce strategy. If any year has highlighted the importance of customer service teams, it’s 2021. With the disruption set to continue well into 2023, brands will continue to see customers demanding up-to-the-minute updates on their orders, with even the shortest of delays. As such, they must treat customer service as a strategic priority, as increased volumes of orders inevitably lead to increased volumes of customers trying to get in touch with care teams, and increased numbers of jaded shoppers, willing and able to take to online forums when their experience is unsatisfactory.

To aid customer service, brands should consider integrating their website and order management system, so that agents can leverage real-time order information, and respond quickly to customer queries, letting them know exactly where their product is within the delivery chain.

Armed with the above, retailers not only stand a fighting chance of survival next year, but they can expect to thrive despite future adversities. There is still much to come in 2022, and that’s why it’s important that – as well as supporting the now – these strategies are agile enough to stand the test of time.

Whilst the last twelve months certainly presented retailers with challenges more gruelling than ever thought possible, for 2022, it’s about what they make of it. If last year taught us anything, it’s that there are rewards on offer for those brands that do make the effort and invest in eCommerce strategies at early gates. 

Rather than a setting sun on the most difficult year in retail to date, for those prepared to rise early enough, it’s a new dawn.

By Kamran Iqbal, commerce strategist at PFS

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