Now that the new year has cleared the starting gate, we’re thinking about what 2022 may bring for e-commerce retail, especially after a year like 2021.

Last year taught all of us that no matter how smart we are, and how much savvy and foresight we think we have, unforeseen and unimaginable circumstances can change everything overnight.

There’s no shortage of predictions about what retail will see in 2022, and what changes the year may bring. We thought we’d take a look together…

A fresh start, or more of the same?

We’re living in interesting times.

The ground rules for things like systemic reconstruction or reboots have changed dramatically. It’s reached the point at which repeated attempts to fix new problems in old ways are hurting more than they’re helping.

Hence, the evolutionary changes we’ve been seeing in e-commerce retail.

To be blunt, we’ve come through a year that’s left many of us feeling, both commercially and personally, that we’ve been put through a meat-grinder.

There’s the seemingly never-ending pandemic, the major malfunctions in global supply chains, political and military tensions, drastically changing consumer expectations, and the social upheavals occurring over governmental responses to COVID.

Thinking a fresh start or some sort of magical reboot will solve our problems is a nice idea.

Not realistic, but nice.

Instead, we expect that we’ll continue to see responsive change in the industry – true adaptation, we hope – as retail extends itself to account for new “realities” as they present themselves. There will be interesting developments in 2022 in multiple areas, including CX and consumer relationships, retail tech, supply chain, and other critical areas.

So, let’s have a look at what the pundits (and some less glorified folks) are saying…

Where 2021 left us

The data has continued to roll in.

In some respects, it left us with some justification for feeling better about the state of things.

According to Adobe, the November 1 – December 31 holiday retail season wrapped with US consumers having shelled out over $204 billion for an increase of more that 8.5 percent over last year. Some records were broken – remarkable, considering the chronic supply chain issues that plagued retailers globally and are continuing to do so.

There was an increase over more than 19% in online spending before Thanksgiving, and fluctuations in spending patterns during Cyber Week that suggest it’s no longer consumers’ single focus for the holiday period. Discount rates also fluctuated across categories, and were deeper in clothing and toys than in the previous year.

Unfortunately, retail is nowhere close to being out of the woods yet. Retailers are still coping with tangled supply chains and the growing mass of red tape and stringent requirements designed to slow the spread of the COVID-19 Omicron variant.

Moody’s has suggested that the variant is unlikely to interfere significantly with economic growth, and we’re hope they’re right about the temporary nature of the variant’s impact.

But obviously, 2021 has taught us to expect the unexpected.

So, going forward…

It strikes us that there are a great many top trends for the coming year, if one is to believe all those who claim to know what comes next.

For instance, the folks at Agility think that the current slowdown in growth rate of Chinese e-commerce will persist, with slower growth already impacting sales.  Others are looking at tech trends and seeing greater emphasis on the use of chatbots, voice search, implementation of conversational language use, AR, AI, more payment methods, and heavier emphases on omnichannel user experience and mobile e-commerce sales.

Glood.ai sees customization and personalization as ongoing trends that will get stronger in 2022, and the company’s forecast reflects that view. They’re looking for greater emphasis on personalizing the buying experience through AI and predictive analyses to improve item recommendations. Glood also believes there will be greater use of product customization as part of the retail experience, as well as voice search and chatbots.

There are some trend forecasts that are of critical interest. According to Jake Loveless in Forbes, there’s going to be serious activity in DTC (direct to consumer) retail because traditional vendors and established brands will act on the lessons they’ve learned from DTC e-commerce, especially in the last 18 months.

Loveless expects more movement to DTC on the part of traditional brands and vendors, with DTC retailers expanding into new product categories adjacent to their own. DTC tech infrastructure will improve significantly, allowing DTC retailers the scope and power to improve their sites’ capabilities easily.

Interestingly, Loveless also expects that “Returns will be a competitive service differentiator,” and cites a researched consumer preference for vendors offering advantages like free shipping for returns or original-form payment refunds.

Then there’s the growing popularity of digital payment and the notion many governments have about going cashless. If the folks at Retail Technology Review are correct, there’s going to be a boom in the value of global prepaid card transactions.

They rely on a very recent study from Juniper Research suggesting that by 2026, this value will increase to more than $4.1 trillion. This would amount to an increase of approximately 75% over 2021, and Juniper sees the growth driven in part by the move to cash replacement as digital payments become more popular with national economies.

Context still counts…

If you’re coping with problems specific to your e-commerce business, it’s easy to forget that your issues are occurring in the middle of a sea of external economic and other variables.

And the waters are rough these days, with uncertain weather ahead.

When it comes to context, the best we can do is to maintain focus on those “macro” areas that impact e-commerce retail’s immediate future.

In a January 11, 2022 article on the Sky News website, John-Paul Ford Rojas notes that the World Bank is forecasting a marked slowdown in global growth. It suggests that pressures associated with COVID are to blame, together with inflation problems.

With respect to the latter, he also notes that the OECD sees inflation across its member countries as the highest in a quarter-century, with energy and food prices skyrocketing. The bank is forecasting a decrease in global growth from 5.5% to just over 4%, with even more slowing next year and continued supply chain issues globally.

Global context will have to be a serious component of every retailer’s planning this year, from the largest to the smallest. To do otherwise is to look for e-commerce retail disaster. The watchwords will be proactivity, vigilance, and agility in addressing contextual changes…

Retail Tech in 2022

Much of what we’ll be seeing in 2022 echoes some familiar themes. Per Vered Levy-Ron of Retail Info Systems, we can expect to tech enabling “inspiration-led shopping.” It’s exactly what it sounds like, and reflects industry response to consumers’ pent-up desire to be out in the world and behaving “normally” again.

Levey-Ron talks about providing moments of inspiration that offer consumers defined visions in which they can see themselves, and those moments will appear on Instagram, TikTok, and Pinterest. They’ll also appear in the immersive story-telling and experiences retailers will want to offer consumers, and the tech will adapt to enable these components in new, more expansive ways.

There will also likely be significant growth in the tech designed to help e-commerce retail resolve the problem of abandoned carts and dead-ended searches. We can expect retailers to up their game in terms of merchandising methods and strategies, especially with access to AI to improve both visuals and search recommendations.

Benjamin Marr, writing in Forbes, sees five big tech trends for the new year, including cashierless shopping, experiential retailing, and autonomous delivery. He also sees continuing emphasis on omnichannel and social commerce, with consumers opting for the increasingly connected experience they’re coming to expect. Finally, we can expect ongoing efforts to promote resilience, security, and safety in retail by a variety of means. These will involve growth in the spread of AI and blockchain in bolstering supply chains and restoring them to health.

We’re also going to see more “headless tools” that effectively separate one’s back office from customer-facing elements. The goal is to move to a more unified approach to e-commerce, with coherent tool sets and programs designed to let users unify or harmonize their own business processes.

So, where to from here?

Now that’s a question.

Who knows for certain? There’s an argument that says everything is always actually hypothetical until it happens. Then, briefly, it’s real…

The best course of action: do your research. Look to your supply chains for strategies to minimize or eliminate potential causes of disruption. No matter how big or small your e-commerce enterprise, think about your employees and the kind of relationship you want to have with them. You’re going forward into a new and rapid evolving reality together, so it’s time for real care, real attention to their circumstances, and real communication that shouldn’t necessarily originate in an HR department.

As always, there’s so much more to be said, but we’re going to space things out over multiple posts, revisiting the stuff we think is relevant and important to you as an e-commerce retailer.

Let’s all have a great year – healthy, safe, and prosperous.

Talk soon.