top of page

What the Retailers Everyday Life is Today & How the Industry is Going to Surprise Customers in 2022

Updated: Jun 6

Have you noticed how dynamically the retail industry is developing this year? Following Trading Economics, sales rose unexpectedly, giving companies hope for a soon post-pandemic recovery.

Retailers apply superman's efforts to stay afloat, satisfy clients, and achieve their strategic goals. Drones with purchases are already flying over our heads. Shops offer to bypass the long check-out process. It looks like a miracle.

Gartner reports that companies have successfully mastered: low-code application platforms, deep neural learning, cloud AI developer services, and edge AI. It allowed them to establish operational activities, create in-house software faster and meet customer expectations.

But the discoveries do not end there. Let's dive deeper into the daily life of retail 2021 to discover what steps the industry will take the following year.

Retail Development Directions in 2021

Customer-Related Improvements

Retail continues to improve customer-centric approaches and support omnichannel services. To do it successfully, they should use new digital software on different levels. Consequently, following CB Insights, retail technology funding in Q2’21 rose to $31.5 bln. What have the companies been able to improve with this investment?

  • Online Ordering

As customer behavior changes during the pandemic, the industry has provided an advanced ordering system from any communication channel. This approach enables shoppers to express their needs in person and remotely. To manage these processes, a company just needs to get rid of legacy software, implement a robust delivery calculation system & order management system and ensure fast delivery

  • Fast Delivery

For a whole year, news about 1-day and even 30-minutes delivery haunted ordinary readers and competing companies of Amazon and Kroger.

For example, the first one had launched Amazon Prime Air delivery offering half-hour or less delivery by drone. The company assures that it has made every effort to comply with the US aviation acts and provide safety. “We are actively flying and testing. It will take time and more hard work before our operations are ready to scale,” Amazon reports.

30-Minutes Drone Delivery Scheme

Kroger decided to follow this trend 2 years ago by launching a pilot 30-minute delivery “Rush”. However, it wasn't successful. This year, inspired by a partnership with Instacart, the company created a virtual store for a half-hour delivery. According to The Wall Street Journal, the “Kroger Delivery Now” service offers an assortment of 25,000 SKUs and delivers from over 2,700 Kroger brick-and-mortar stores.

  • Analytics & Loyalty

Retailers have begun to pay more attention to behavioral and habits analysis. This way, they personalized an offer, ensured cross-sales increasing and general goods turnover sustainability. Following the Retail Dive, 52% of companies said they already apply state-of-the-art analytics tools. 32% of them were going to expand their usage.

In spring 2021, 7-Eleven Australia created an entire division dedicated to personalization and customer loyalty. The company is focused on enhancing the online and mobile customer experience by recreating the brick-and-mortar store "feeling" in a virtual space. To achieve this goal and generate 28% of all transactions through communication channels by 2030, 7-Eleven uses a platform for customer data analysis.

Paul Wallace, Head of digital innovation at 7-Eleven Australia, suggested the possibility of creating one more division for this purpose since the issue of analyzing and shaping a personalized experience is too complex.

  • Commercial Activity on Socials

Show us someone who knows nothing about magic social media's impact on sales. Retailers use socials in different ways: they advertise their products by themselves, collaborate with bloggers for this purpose, and even turn socials into full-fledged communication channels.

However, now this trend is being transformed due to Industry 4.0 technologies implementation. The willingness of TikTok to support e-commerce is particularly impressive.

The collaboration with Shopify makes the company implement Square to empower retail. Management is convinced that advertising and attractive content will enable the industry to attract more buyers. Starting this fall, retailers can include links to their goods into TikTok content and redirect potential shoppers to Square Online to complete their purchases.

Social buying on TikTok

A great example of TikTok's engagement was the JD Sports & Nike interactive campaign, conducted due to cooperation with TikTok's Creative Lab. The companies used AR technology to allow viewers to fit on Nike's new sneaker in different colors.

No news bulletin is complete without e-commerce development on social media platforms with augmented reality usage. Deloitte survey of 15,000 respondents from 15 countries shows that over 4.3 bln customers will use AR daily by 2025. It means that the retail industry moves in the right direction.

  • Additional Services Launching

BOPIS: eMarketer predicts that the level of sales using the “Buy Online Pick Up In Store” service will double between 2020 and 2024. Due to the BOPIS popularity, retailers improve software supporting this approach: use scalable order management systems, customize GPS apps, etc.

But the industry giants never cease to amaze customers. The Amazon platform recently launched Amazon Local Selling, enabling affiliated retailers to pick up goods from stores. Since 67% of US shoppers have used this service in the last 6 months, this innovation seems useful enough. Removing Amazon's logistics operations from the supply chain will allow companies to provide delivery quickly.

Now only 16 sellers are participating in the program, but the company is unlikely to stop there. This initiative has worried Walmart, Amazon's main competitor. So we should probably wait for retaliation from Walmart soon.

BNPL: “Buy Now, Pay Later” is one more service that is gaining popularity among retailers. Following CNBC, this approach increases customer loyalty, conversions, and buyer cart size. Loan programs enable shoppers to manage their budgets and afford more. On average, companies set 3-5% as “loan interests”, so customers hardly feel the burden.

It seems that it works more efficiently in non-food retail, where shoppers tend to make high-value purchases. That's why Apple announced the BNPL implementation. But the company pursues not only the above goals. Its management hopes this approach will engage customers to use Apple Pay and iPhones for making payments.

Business-Related Improvements

  • Supply Chain Optimization

Following Statista, the global logistics industry cost is $9.1 tr. Consequently, the retail supply chain requires significant investment, especially considering post-pandemic challenges. E&Y research shows that only 10% of supply chain executive respondents are ready to deal with it effortlessly.

That's why this year, companies try to optimize their supply chains. This way, they hope to accelerate goods turnover and reduce costs.

For this purpose, retailers actively use IoT. They connect each vehicle and container to a central network to track locations and terms of delivery. In-depth data analysis allows making predictions regarding weather conditions, equipment operation, etc. Accordingly, businesses can prevent waste of resources and create the most optimal routes.

IoT Technology in Retail Supply Chain

But, as it turned out, it is not enough. Traditional IoT implementation does not provide total control over supply chains. By receiving real-time data and analyzing it, management almost always remains an observer. Digital twin technology can change it.

The new approach enables retailers to create a dynamic virtual copy of real processes. IoT & digital twins empower business. Management can directly impact the supply chain, test new scenarios, and build the most appropriate supply chain model without risks.

Google has already seized on this idea by launching a cloud solution Supply Chain Twin. The product will help to simulate supply chain copy for inventory, supplier, and events control. Creating such a twin on your own is time-consuming. Meanwhile, Google offers to receive an efficient solution in a tight schedule.

  • Digitization of Trading Floors

Now, few buyers risk visiting brick-and-mortar stores to shop with other people. However, companies tirelessly improve the experience of the remaining daredevils.

Earlier, we discussed smart carts and shelves, allowing companies to analyze customer purchases and make personalized offers. Today a contactless check-out is all the rage.

Kroger, for example, contrived to kill two birds with one shot. The company announced testing smart carts with a check-out feature, built-in scale, and camera. Amazon launched a similar project named “Dash Carts” last year.

The new generation of smart carts can define what goods are inside. Customers can see a complete list of products on the screen and confirm the purchase through the cart's terminal. Due to multichannel, buyers can create an online shopping list before visiting a brick-and-mortar one. The information will be displayed on the cart screen and allow people to collect the purchase quickly.

Some companies have solved the issue of fast check-out in another way.

For instance, Mastercard and Verizon Business used 5G to provide retailers with autonomous check-out service. Companies have decided to use 5G smartphones and other connected devices to accept payments. "This partnership will drive transformational solutions for the global payments and commerce ecosystem. From contactless shopping and autonomous check-out technology to Cloud Point of Sale (POS) solutions,” - MasterCard press center reports.

  • Robotization

Retail is looking for ways to optimize business processes and minimize routine work that affects the employee experience. The lifebuoy here turned out to be the possibility of using robots. Sure, it has several drawbacks, but that doesn't stop companies from taking turns using this scenario.

Kroger has launched the largest automated warehouse in Ohio, which costs over $ 55 mln. Implemented robots can collect a 50-item order 5-7 times faster than employees. It significantly optimizes warehouse operations, reduces additional costs, and ensures a high delivery speed. But the robot's effectiveness does not mean a complete lack of staff. The warehouse employs 400 specialists who control the correctness of routine tasks performance.

Robotized Order Collection in a Warehouse

Amazon decided to go beyond, announcing an idea to provide direct communication between humans and robots. The company is working on smart fitting-rooms in its future department stores. There, customers will select the desired sizes and models using touch screens. A new department store сalling card will be robots serving clothes to customers to try on.

  • Compliance With State Regulations

Data Protection: Perhaps the main challenge for large enterprises is customer data protection. The CCPA, GDPR, and other similar acts make companies comply with many requirements regarding the usage, transfer, and leakage of sensitive information. Retailers actively implement IoT, operate with terabytes of data, and partner with social media platforms. The slightest mistake of an enterprise or its partners can cost it millions of dollars and reputation.

A striking example of such an incident was the class action against the French beauty retailer Sephora and its partner - a loss prevention service provider The Retail Equation. The plaintiffs accused the defendants of unauthorized distribution and usage of their data, which violates the CCPA provisions.

Moreover, e-commerce via socials is also quite risky. Remember at least that over 1.5 bln Facebook users' personal data, found for sale by hackers. How to deal with it?

In this case, social media platforms can fix this issue by themselves. Many of them are going to or already implementing blockchain technology. The last one divides one monolithic network with a single control point into many small decentralized networks. This approach allows users to control the amount of data provided, how it is used, and the ability to delete it without negative consequences.

In turn, retailers also provide all the necessary safety measures to avoid troubles: from a detailed data policy creation to an in-depth analysis of partners' attitudes towards this issue.

Employee Work Conditions: Sometimes, retailers get carried away with involving employees in the work process, forgetting they are also people. Government agencies try to keep the middle ground between work and leisure.

This year, the California State Senate passed a bill aimed at Amazon and other companies with large warehouses that track productivity. The act requires employers to disclose information regarding performance quotas to employees and provide sufficient time-outs during the operation process.

When it comes to regulations, California is a “trendsetter”. So, all US companies should expect something similar in their states soon. Time will tell to what extent they are ready to provide employees with the most convenient working conditions.

  • Employee Experience Improvement

In 2021, over 17.3 mln specialists support the retail industry. Each of them should feel involved and satisfied. As the saying goes, a happy employee equals a happy customer. Retailers work hard to keep it that way.

They implement robots, freeing up staff for more fascinating tasks. In the new environment, companies continue to invest in software for efficient remote work. Many specialists can stay home, enjoying the safety and work-life balance.

But there are employees for whom such benefits remain unattainable. How to ensure their satisfaction and productivity?

Companies follow the Chinese scenario. They implement gamification as a tool for employee engagement. This module is often part of a comprehensive point of sale system. It allows management to organize a sort of in-house competition. For the largest number of well-completed tasks, the employee receives a sort of bonus: extra days off, a certificate for training, etc.

Gamification module in the Point of Sale Software

The approach allows everyone to feel like an integral team member and get satisfaction from daily work. The importance of the EX in retail is growing. So companies will create some more conditions and ways for ensuring seamless cooperation with professionals.

  • In-house Software Development

The retail market is too dynamic. To stay afloat, companies should use flexible software and adapt to new conditions on time.

In the past, retailers have always worked with vendors to get custom software. In 2021, the paradigm is changing, and business is taking over software development. Enterprises create new solutions on their own and modernize legacy ones to keep up with competitors.

For instance, Amazon decided not to wait for the perfect POS system but to build it. The company is developing a scalable product, which will be launched as SaaS soon.

Amazon promises to create a solution as a central control point for various retail processes, including omnichannel support, order and loyalty management, fast payments provision, etc.

The next year, the percentage of such development will grow as companies strive to expand their audience and new revenue streams.

What Will Wait For The Retail Domain In 2022: Analysis & Predictions

Prediction #1: Software improvements

Next year, companies will continue to expand online space by developing e-commerce. Social commerce will grow actively. Retailers will enter into alliances with social media platforms, while the last ones - will release new features to facilitate retail processes.

Businesses that have already conquered their share of the online segment will continue to increase a sales level through:

  • implementation of new software that encourages customers to buy from home

  • migrations of existing legacy solutions to microservices, new tech stack, etc.

Prediction #2: New technologies

In 2022, businesses will continue to embrace technology to streamline internal processes and improve customer engagement. Following Gartner, transformer-based language models, advanced virtual assistants, and application ecosystems will be at the peak of popularity.

Prediction #3: Faster delivery

Presumably, companies will try to improve delivery processes and shorten the path of goods from a store to a buyer. The drone idea is going to be contagious. Following Mordor Intelligence prediction, the delivery drones market will reach $ 5.6 bln by 2026, while as of 2020, it was $ 2 bln. Since few retailers will be able to afford such a delivery organization on their own, they will interact with the delivery services like UPS, ZipLine, DJI, etc.

Prediction #4: Healthcare

The healthcare issue will remain relevant, especially when it comes to ensuring safety in the workplace. To comply with legislation and care of employees, retailers will encourage vaccinations and enforce health regulations closely.

Prediction #5: New Markets & Cross-Industry Alliances

Retailers will strive to engage a wide audience. Giant Amazon already develops software, robots for smart facilities and designs new department stores. Lots of competitors will follow this example in order not to lose their position in the market. This approach will give impetus to cross-industry partnerships, which means new complex services that predict customer demand.

As seen, the number of innovations and directions for development in retail is off the scale. It seems that nothing new can be invented. But believe us, the industry will still find something to surprise you.


More insights


bottom of page