Returns will become a hot differentiator for retailers in 2022, according to Forrester’s Predictions 2022: Retail.
The biggest retail trends of 2022 will include tapping into the circular economy, using returns to retain customers and retail partnerships.
That’s according to Forrester’s Predictions 2022: Retail, which said that the coming year will be one of investment and new partnerships as retailers position their business model, strategy, marketing, stores and operations to flourish in a post-pandemic world.
Below are Forrester’s predictions for 2022.
• The circular economy will become a must-have — and fuel intense investment. In 2022 Forrester predicts that investment in companies that facilitate resale will top $2 billion.
Consumers like buying secondhand products because they’re unique and less expensive — and for the fun of finding a bargain or special item, noted Forrester VP and principal analyst Sucharita Kodali and VP and research director Fiona Swerdlow in a corporate blog post.
Resale also makes good sense for the planet. Forty-one percent of online adults surveyed by Forrester in the United States. prefer to buy environmentally sustainable products.
• Returns will become the next retail competitive service differentiator. Originally seen as part of “boring but necessary” operations, returns will become a hot differentiator for retailers in 2022. About 60% of U.S. online adults surveyed by Forrester prefer retailers that offer free return shipping. About two out of five prefer retailers that provide refunds via the original form of payment. Plus, more than one-third of U.S. online consumers tell Forrester that the fear of returns has discouraged them from buying online.
Forrester expects retailers and brands will invest to upgrade returns (locations, streamlined processes, refund issuance, internal returns processing) and, like Wayfair, will work to share data internally and upgrade how they present products to avoid returns in the first place.
• Store-within-store initiatives will bear new partners with (formerly) unlikely bedfellows. The Kohl’s-Amazon, Kohl’s-Sephora and Target-Ulta deals are just the start of partnerships between bona fide retailers. Partnering with another retailer expands the footprint in often prime locations minus the expense of another full store. For the host retailer, it refreshes assortments, grows overall per-square-foot sales, and lowers financial exposure.
DTC retailers — many of which want to grow their store networks — are ripe potential partners.
• As firmly entrenched partners, retailers and media will reap (many) billions in revenue. Best Buy, Carrefour, eBay, Kroger, Macy’s, Target, Tesco, and Walmart arejust a few retailers operating growing retailer media networks. These are advertisingplacements that are sold on retailer websites and in-store to both brand partnersand other marketers (“non-endemic advertisers” such as insurance companies or financial services firms).
These ad formats represent a new (and often substantial and profitable) revenue stream for retailers. Advertisers also see them as effective because they reach captive, alert shoppers who are in the mindset of transacting.
• Western brands will spend 2022 courting new China partners beyond Alibaba and JD.com. Analysts at Forrester also predict that regulatory changes in China around both market regulation and personal information protection will mean that Western brands will spend 2022 pursuing new retail partners in China beyond Alibaba and JD.com, including niche marketplaces and mini-programs via companies such as Douyin, Little Red Book and WeChat.