Patrick Spear is the president & CEO of GMDC | Retail Tomorrow and a contributor to Supermarket News. Spear joined GMDC | Retail Tomorrow in 2014 after nearly two decades of involvement with the association as a supplier member during his tenure with multiple CPG manufacturers including BIC, Newell Rubbermaid, Mapa Spontex, Identity Group, and Mammoth Office Products.
The year is coming to a close, and retailers’ plans for 2022 are already well underway, paying close attention to the market shifts that took place in 2021. In the wake of a year filled with incessant supply chain disruption and backlog, the development of the omni-choice shopper and fast-evolving consumer purchasing trends, uncommon (yet innovative) partnerships and the resurgence of a labor shortage, how will retailers evolve and thrive in 2022?
It feels like the world is regaining balance and the retail industry is transforming at a faster pace than ever to keep up. 2022 will be no different and, in fact, expect this pace to accelerate. While there is no clear vision in the crystal ball just yet, we can anticipate three significant trends that will continue and usher retailers into uncharted territory in the new year.
Retain and Recruit
A recent study by Korn Ferry has predicted there will be a global human talent shortage of more than 85 million people by 2030. What’s more, the recent resignation rates are the highest among mid-career employees. So, how can retailers remain nimble while recruiting and retaining top-tier talent?
This year, we saw many businesses identify new ways to retain their existing pool while looking to expand their team with fresh talent through enhanced employment benefit packages.
Amazon’s milestone announcement to pay the full cost of college tuition for 750,000 hourly employees based in the U.S. represented yet another large-scale company amplifying its benefits and perks programs to attract employees. Given its scale, market cap and momentum, this announcement is a game-changer. The $15/hour minimum wage has become the “ante” into the game, and now the battle has moved over to employee benefits. Starbucks, Walmart and Target have made similar announcements and this trend will continue putting immense pressure on other retailers (and large employers near Amazon fulfillment centers), specifically the mid-size and regional players who may not be able to offer a similar benefit.
Will this continue into 2022? In short, yes. Relative to incremental costs to fund programs like this, we can expect increased pressure on the supplier community, given the purchasing power and leverage the big retailers represent. While the additional education expenses could lead to inflationary pressure, Amazon and others may use the opportunity of private label expansion to drive branded supplier price concessions and program funding.
From small-to-mid-size companies to large corporations like Amazon, employers will continue adjusting their employee benefits packages to provide a feasible work-life balance to remain competitive and boost overall employee morale, satisfaction and retention.
Personalizing Amid Privacy Regulations
In 2022, retailers will be forced to overcome a new hurdle in light of privacy regulations recently introduced by Apple that will impact how marketers reach, and communicate, with their customers. At a time when personalization is more crucial than ever, how will retailers continue achieving and fostering a unique relationship with their customers if they aren’t able to understand a customer’s behavior?
This is where customer journey mapping will come into play. According to key takeaways provided by Qualtrics, customer mapping enables companies to assess four major key components of consumer behavior: insights, impact, issues/opportunities and innovation.
With journey mapping, companies can create customer personas, such as the omni-choice shopper we’ve become accustomed to, that allows them to gauge the consumers’ thought process behind the buying behavior, if their values align with the product that they’re interested in purchasing or if the company holds similar values to them. By linking each interaction with the customer, from online search to browsing a product in-store, retailers can ensure each experience is a perfect fit.
Implementing personalization within the customer experience must occur at every touchpoint of the journey and retailers must discover fresh and inspiring ways to connect with customers to keep them engaged. By mapping out a journey, reimagining a store design, launching an e-commerce platform, providing digital in-store options and adopting a frictionless checkout, retailers can deliver customers a meaningful and authentic experience that will hit the main touchpoints each individual customer persona cares about. Through this process, the journey map will provide companies with a framework that can determine benchmark success leading to a loyalty-based, long-lasting relationship.
The Power of Uncommon Partnerships
In 2022, organizations of all sizes cannot afford to be stagnant. They must be intentional about how they evolve and thrive. If we learned one thing in 2021, it’s consumers want to be wowed by companies through innovation and unique experiences and, seemingly, uncommon partnerships between their favorite brands.
According to Forrester, the most innovative companies will continue to reinvent themselves to appeal to consumers through partnerships with direct-to-consumer (DTC) brands. Albertsons, for example, tapped several tech startups this year such as their partnership with Instacart, spotlighting a union that aligns with the brand and their mission while remaining on the cutting edge of innovation. This grocer has been moving fast and aggressively to inspire its customers along the omni-choice journey and through partnerships and internal initiatives, they are sending a strong statement within the industry that they will innovate fearlessly to provide an optimal customer shopping experience.
Taking a different approach, Kroger continues its ongoing market expansion through its partnership with Ocado to launch automated warehouses for filling online grocery orders, which is just a glimpse into how legacy brick-and-mortar retailers are thinking about and acting on an increasingly competitive market. In the new year, we’ll see how they respond to a new pure-play delivery competitor with the resources that Kroger brings to the table.
The advent of uncommon partnerships provides mutually beneficial opportunities for retailers. Digital brands are given the opportunity to have their products displayed in big-box stores that are home to thousands of consumers daily. While these stores maintain exclusive partnerships with digital brands, they further boost their appeal and solidify the brands’ reputation in the market. Target has been heavily invested in this DTC strategy with a years-long track record of successful partnerships that shows no signs of slowing down in 2022.
It’s safe to say that these three key trends will pick up strong momentum in the upcoming year with many retailers and grocers continuing to find ways to keep up with the omni-choice shopper who demands a “phygital”, personalized shopping experience. Through creativity, intention, flexibility and the desire to always adapt with the times, retailers can remain on the forefront of innovation.
