How is the retail market shaping up for 2022?

With continued uncertainties a running theme throughout the COVID-19 pandemic, the relationship between traditional retailing, ecommerce and customer service has seen new developments.

How is the retail market shaping up for 2022?

With continued uncertainties a running theme throughout the COVID-19 pandemic, the relationship between traditional retailing, ecommerce and customer service has seen new developments. Focus on the bottom line and its variables, as well as how best to capture market share and retain a customer base, are paramount if retailers are to continue thriving. 

Even pre- pandemic, retail businesses were having to adapt to an ever-changing landscape, particularly when considering the rapidly growing ecommerce space. The decline of the high street has been a fact of the retail market for years, but the pandemic has only served to exacerbate this. 

Giants in the industry such as Amazon largely guide the trajectory of these changes. Amazon have recently made the decision to stop accepting payments made through VISA credit cards from 19th January 2022. The reason cited refers to extortionate fees taken by VISA per credit card transaction, affecting their bottom line. In turn, the ability of retailers to provide customers with the best possible price is diminished, especially for smaller and medium sized businesses. Other types of businesses such as high street banks are also reviewing the impact the card issuer has on their net income. Thus, illustrating the shifts that can occur throughout the retail market due to one large company making changes.

Furthermore, Amazon has an ever-increasing physical presence particularly expanding their UK grocery stores known as Amazon Fresh. The use of new tech involving ‘checkout free’ shopping paying through the app marks a new shift towards autonomous, easy shopping while keeping up the traditional high street feel still enjoyed by many. This evolution of food shopping is also inspiring the competition, namely with fellow retail giant Tesco, who have been rolling out a similar proposition known as GetGo. 

The amalgamation of tech and the traditional shopping experience could set the tone for the next era of the retail market. On the flip side, this development could erode traditional shopping further and increase reliance on technology, which could lead to a larger drive for subscription models in order for these companies to retain their market share.

The message is clear: retailers must adapt, or they will fail.

From subscription models to closing of physical retail spaces, businesses must stay ahead of the curve or they will be playing catch up, an increasingly difficult proposition in a growing marketplace. With the rise of ecommerce and the need for an adequate infrastructure to implement online services, retailers must look to fine tune their approaches. 

Diversifying product lines, as well as offering more luxury, niche products, will be valuable strategy update. In doing so, retailers can establish a go-to- a competitive advantage in this growing, overly crowded market. In an industry where retail giants can in effect offer any type of product, customer loyalty and product quality are the elements that a smaller or medium sized retailer can most effectively maximise and capitalise on.

Furthermore, customer relationships and service delivery are vital components within retail businesses. First-class, seamless, online shopping experience, coupled with reliable and quick delivery services, make for an attractive proposition to any customer. In retaining a strong customer base, businesses can retain any market share that may have otherwise been in jeopardy given the uncertainty of the industry. 

Retailers will need to level up this year if they hope to remain thriving. The landscape is ever changing and new strides towards greater reliance on seamless ecommerce will prove a new challenge for retailers. Industry leaders ultimately have the power to create shifts, as with the decision to axe VISA credit card payments. Other retailers may look to follow suit but also devise their own strategies for how to get ahead and thrive in 2022. 

ABOUT THE AUTHOR
Neil Debenham
Neil Debenham
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