Post-Holiday Outlook: Time for a retail reset
With the holidays almost upon us, brands and retailers will be hoping both demand and supply hold up as the world continues to manage the effects of the pandemic. The positive news is that Accenture’s latest Annual Holiday Shopping Survey finds that seven in ten U.S. shoppers are planning to spend as much or more than they did last year.
But what about after the holidays? Our research shows that over two in five consumers say the pandemic has changed everything for them and they’ll look differently at their spending as a result. Inevitably, that has implications for shopping habits and purchasing decisions. So what should retailers expect from consumers over the next year?
Prudence & Pampering
There’s no doubt there’s a degree of financial caution out there right now. Our survey found the biggest priority for the next year is paying down debt. Saving for retirement and household budgeting also rank highly.
But 2022 will not be all about prudence and fixing personal finances. It’s also evident there’s a sense of excitement among consumers about the possibilities for indulgence.
Consider clothing and cosmetics. Almost half of those surveyed (48%) said buying new clothes to look and feel good is part of their spending plans for next year. And two in five said the same about cosmetics and personal products.
The desire for a little post-pandemic pampering is evident across many different segments: home goods and furniture (38%), eating out and socializing (45%) and treating oneself and others to indulgent food and drink (47%).
Responsibility Front of Mind
Retailers can take the positives from these indicators. But they also need to recognize what else is on shoppers’ lists of expectations. It’s clear that consumers are refocusing on sustainable, healthy and local shopping.
Almost three in five told Accenture they plan to use local and/or independent retailers during the next year. And nearly as many (55%) said they’ll buy more locally sourced products.
Similarly, around half of consumers said they’ll be buying more healthy items. And significant numbers will be looking for reusable/refillable packaging (41%) and greener deliveries and packing (35%).
Related to this, re-commerce is another resurgent trend. Over a third of shoppers (37%) say they’ll buy pre-owned or vintage apparel in 2022. And smaller but still significant numbers will buy second-hand electronics (31%) and homewares (29%).
Reset for New World
To capitalize on these opportunities, retailers and brands need to reset their organizations for the new world they now find themselves in. But what does that mean in practice? There are five areas that should be addressed: sourcing, fulfillment, talent, digital capabilities and data.
In sourcing, for example, nearly every retailer has taken extra measures to strengthen supply chains for the holiday season. But the reality is that both sourcing and fulfillment need a more fundamental reset for the post-pandemic world — one that addresses sustainability, ethical practices and transparency as well as supply chain resilience and last-mile fulfillment
Similarly, talent is a really pressing issue for retail right now. Many companies are struggling to fill positions that are open today. At the same time, they’re having to think about the skills and roles they need tomorrow as the retail workplace becomes more digitally enabled, data-driven and automated. With these challenges in mind, retailers told Accenture that they are taking a different approach to recruitment this year.
Nearly half said they have altered or enhanced hiring processes to onboard new recruits faster, 38% said they have altered or enhanced training processes to make it faster and easier for recruits to become work-ready and 34% said they are changing role descriptions to target and attract different types of candidates. Talent strategies will also likely need a reset for the years ahead.
What about data and digital capabilities? Most brands and retailers already recognize how fundamental these are. But many are still struggling to scale up their plans into tangible business outcomes. Consequently, this is another area that needs a reset if they’re to be able to deliver capabilities like channel-less shopping, hyper-personalization, and intelligent and granular consumer insights.
It seems highly likely that 2022 will see a return to some of the behaviors that haven’t been possible over the past year — in the way people work, socialize and shop.
But for retailers it’s not as simple as going back to the way things were. There’s no doubt the pandemic has accelerated digital shopping behaviors. And these aren’t going away. The challenge for retail is to tap into changing habits and reset their businesses in a responsible way.
So, it’s not a return to normal in 2022. It’s a chance to create something new, something more profitable — and something more closely aligned with consumer needs in the post-pandemic world.
