The Future of Retail: 2022 Macro Trend Forecast

British Retail Consortium (BRC) Chief Executive, Helen Dickinson, has forecast the leading trends in retail as we look forward into 2022, predicting that the big jump in online sales witnessed throughout the pandemic is likely to remain a permanent fixture of the retail landscape.

As the importance of the digital environment grows stronger in all parts of our lives, with citizens regularly showing and scanning QR codes to access travel, leisure and hospitality, the retail environment is evolving accordingly and exhibitions which serve the industry are moving with the times and offering omnichannel portfolios which reflect the changing needs of our diverse community. These include the Curated Meetings being developed by Spring and Autumn Fair and the digital exhibitions which now run alongside Giving & Living and the British Craft Trade Fair.

In February of last year ONLINE purchases of non-food were around 30% of retail sales, a figure which more than doubled by the height of the third lockdown and then settled at around 40%.

Helen says: “This is five years’ growth at previous trajectories in just eighteen months. While it is unlikely the double-digit growth in online sales will continue, the pandemic has cemented existing gains and is accelerating changes in consumer behaviour. This, in turn, is changing the role of stores and high streets, which must find new ways of drawing in customers.”

If the online trend is here to stay in Britain, our closest neighbours are following suit, with Irish designer-makers and retailers also seeking new routes to market as even more strident lockdowns hit high street retailers hard.

Sarah Loughran of Loughran Signs became increasingly concerned about the challenges facing her local communities. She has seen first-hand with retailers and wholesalers the trials and tribulations business have had to face for many years now, locally in Mullingar, Co Westmeath and nationally throughout Ireland. After running the Look Is Ireland – Celtic Virtual Showcase – earlier this year, it really opened her eyes to the talent and creativity of Irish makers and creators. She says: “The important message of supporting local and shopping Irish really needs to be driven home. Irish consumers need see for themselves how important this message is”.

To this end Sarah has set up the first online Irish Christmas Market, where independent Irish retail businesses, designer-makers and manufacturers can set out their (commission-free) stall and offer shoppers who want to support local businesses an alternative to Amazon.

SUSTAINABILITY is the next major trend pinpointed by the BRC, already long in evidence for those of us working in the home, gift, garden and outdoor living industries. “Many of us are drawn to products without plastic packaging, sourced using sustainable materials, or containing high recycled content”, Helen affirms. “This is an important step towards Net Zero, but making the best choices are still being held back by a lack of information and transparency surrounding the origin or contents of many products. Businesses and governments have a fantastic opportunity to fill this information void, as well as a duty to help nudge us all into making better choices.”

Almost four in five of us say we are changing our purchase preferences based on the sustainability of products we buy.

Thirdly, Helen foresees that pressure on COSTS is likely to translate into higher prices. From seasonal farm workers to HGV drivers to warehouse staff, the whole supply chain is being stretched by labour shortages, leading to rising wage bills. The HGV driver shortage alone has seen drivers receive sign-on and retention bonuses of thousands of pounds, pushing up the cost of getting goods to where they need to be.

Energy prices have also soared in the past year and imports are more expensive. Retailers are faced with new paperwork as a result of the UK’s departure from the EU and global shipping costs have been rising steadily, with the cost of moving a single container from Asia to the UK up to ten times what it was in 2019. “Ultimately it is customers who will pick up the tab. Retailers have seen margins squeezed and are simply unable to absorb all these new costs”.

Garden Industry Manufacturers Association (GIMA), Vicky Nuttall, confirms that there is a major challenge around price inflation being faced by her industry sector: “Whether through raw materials, transport or labour – all the thing things we had this year – and I am seeing quite a lot of scary figures being quoted in terms of price. Both skilled and unskilled labour shortages are an issue for anyone recruiting across a whole swathe of industries, including our own, and I can’t see how that will change in the short to medium term. As I’ve written in the past, supply chain issues are still very much in play and these are not going to disappear with the chimes of Big Ben, unfortunately”.

As to how the High Street will evolve in 2022, Helen says that: “Experiential retail, in hibernation during the pandemic, is now coming back, with greater use of pop ups, shows, and entertainment. Likewise, the integration of online and in-store retail will continue. Every time a customer browses online and buys in-store, or browses in-store before purchasing on their phone, they prove the importance of all channels – and the way they knit together”.

The consumer appetite for high street shopping is certainly still strong and it is up to retailers to hone in on their true wants and needs by delivering sustainable products, preferably those which have been sourced locally from suppliers with strong ethical principles. One of our local retailers, Berkhamsted-based, Creative Collective, which does what it says on the tin by offering a fabulous selection of locally handmade gifts, homeware and beauty products, recently had its best-ever day of trading and is looking ahead to a future that despite the pressurese and challenges, is still extremely bright.

Read the BRC Future of Retail Report here

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