In the 2022 retail landscape, some key trends have emerged that are shaping the way customers shop. Consumers' needs and wants are always evolving. Retailers are working to keep up with these changes by adjusting their own offerings and strategies as well.
Here are the 5 top findings that retailers should be aware of to gain customers and keep them coming back in 2022.
#1. Buy Now Pay Later is here to stay—and growing quickly with younger customers
Buy Now Pay Later (BNPL), including payment types like Affirm, are now commonplace on many ecommerce sites. While relatively new, BNPL is growing fast, and is predicted to be a big payment type, accounting for 25% of purchases in 2026 (it currently accounts for 9%).
Projections are much larger with younger consumers, with whom the payment methods are already popular. In our consumer research survey, 42% of customers said that BNPL is important to them on a site. The highest interest is among customers 30-44, while the age group with the lowest interest is those 60+.
Part of the growing popularity is likely contributed to by higher goats of goods. During the holiday shopping season, there was an 17-20% growth in average selling price YOY in the months of November and December. In the same time frame, Adobe’s Digital Price Index recorded November as the 18th consecutive month of YOY inflation, the highest level since they began recording in 2014.
Using payment alternatives such as BNPL may be a way that customers are dealing with the higher prices while still getting the items they need now.
#2. Customer loyalty has changed—more customers in 2022 are prepared to go to a competitor if they don't find what they want
Our research survey found that 30% of customers reported they’d go to another brand if a site doesn't offer product protection on an item over $200. This represents an increase of 6% YOY from last year’s data on the same question.
This difference is especially significant in young adults—with 40% of customers age 18-29 saying they’d go to another brand rather than not purchase the product or purchase it anyway.
Shoppers have a lot of choices for products and where they want to buy them, making it tough for smaller ecommerce brands to compete with giants like Amazon.
This is aligned with the data from this last year’s shopping season, where shipping and supply chain delays made customers more flexible in their shopping. Nearly half (44%) of customers said they were prepared to purchase alternative items if they couldn’t find the item they wanted due to shortages.
#3. Consumers now care more about their product lasting than the cost or shipping time
In the last year, more retailers are adding protection plans, and more consumers are purchasing them. Our research found that the number of customers who have never purchased an extended warranty decreased by 41% YOY from 2021 (from 17% to 10%).
And the number of retailers offering extended protection has increased as well. The number of customers who reported that a retailer didn’t offer extended warranties dropped by more than half YOY when compared to 2021 data (from 9% to 4%).
Customers care more about the product longevity than the upfront cost, with 64% rating lifetime warranties as increasing their purchase likelihood. This is an additional 11% versus those who say the same about price discounts.
Free accident protection also ranks near the top, as 45% of shoppers say this would significantly increase their likelihood to make a purchase, ahead of the offer of free 2-day shipping at 40%. Customers care about their products lasting long-term, and more customers are motivated to make a purchase when offered free accident protection than when offered 2-day shipping.
#4. Going beyond social media selling—increase in livestream commerce and virtual shopping
More than half of consumers have purchased something on social media, with the top shopping sites being Facebook and Instagram. Retailers are rapidly responding to this trend. According to a survey from Square, three in 4 retailers are now selling on social media, and 43% who do say that at least half of their revenue comes from these streams.
But 79% of consumers prefer to shop at stores that have both an in-person and online presence. Companies are trying to blend the two by creating a unique virtual experience while customers are online. Square reports that within 2022, 30% of retailers will invest in VR, and even more will use livestream shopping.
Virtual reality, or VR, is a way that companies are trying to improve their online experience to allow consumers to feel as though they are trying before they buy. In-person creates a comfort in which the customer can handle a product and visualize it in their home, and get a physical feeling of the materials and color. It can help them trust to buy it.
Livestream shopping shows customers products over video, where they can watch from wherever they are, interact with comments and get questions answered, and purchase directly during the video. Livestream shopping can have big promotional benefits, giving customers the chance to view products while getting familiar with the company and using a storytelling aspect that puts a human face on the brand. In addition, it can have a big sales impact, as IDC predicts livestream shopping to increase conversion by 10%.
#5. Customers want control over their data, making new marketing channels necessary
More than seven in ten consumers (72%) say they are paying attention to how companies collect and use their personal data.
Apple’s AppTrackingTransparency framework, a part of their iOS 14.5 update released last year, means that all apps are required to ask user permission before tracking or accessing identification for advertising.
This has resulted in a difficult return on investment for DTC brands who rely on information to advertise to and retain customers, as reported by RetailDive. The result is that retailers are in the dark about whether consumers who see an ad make a purchase. With less insight into their consumers’ behavior, they’re looking for new marketing channels that will provide a better return.
Consumers are also opting to buy products through a third party, giving the retailers less access to any data about the customer and ability to connect with them in the future. New approaches to build relationships with these customers include Brij, a company that provides product registration for omni-channel brands to directly connect with their customers.
Successful retailers will stay ahead of 2022 trends
In today's retail environment, companies that want to attain and delight customers are offering payment and protection options and exploring new sales and marketing channels to reach and retain more customers. Retailers that maximize these trends will see the biggest growth in 2022 and beyond.