2022 Online Retail Predictions
The past two years have accelerated the growth of e-commerce faster than expected by the retail industry. The COVID-19 pandemic has highlighted the importance of e-commerce for retailers and the convenience it offers to consumers.
Now that the timeline moves to 2022, the editors of Digital Commerce 360 are looking to the future to see what the new year will bring. While the unprecedented levels of online sales growth of the past few years are unlikely to be repeated, the next few months could surprise us all. Here’s what the editors of Digital Commerce 360 are predicting for the coming year.
Slowdown in the growth of e-commerce
Online sales in the United States in 2021 will grow 16.2% year-over-year, according to initial estimates from Digital Commerce 360 that were recently released in its 2021 e-commerce market report. . This is healthy growth, but a slowdown from the 31.8% year-over-year growth in 2020.
Jessica Young, director of research data for Digital Commerce 360, says e-commerce growth will continue to normalize in 2022.
“The growth in e-commerce that we have seen in 2020 will not be sustainable,” Young said. “So far this year, everything has slowed down. This will continue into 2022, when I forecast an increase in online sales of around 14% year over year. “
This slowdown will force retailers to “get really creative again,” says Lauren Freedman, senior consumer insight analyst.
“The store will be looking to make a comeback once again and maybe real estate will be of great value, more stores will start to come back and change the dynamics of shopping again,” Freedman said.
Retailers are moving more into new business models
Other changes that online retailers will make in 2022 to set themselves apart from the competition are investing in new business models, such as launching their own market platform, selling second-hand goods, or testing programs. buyout / takeover, Young explains.
Retailers launching their own marketplaces are already a trend that Digital Commerce 360 is watching, with several large online retailers launching into the space in 2021. The model is appealing to retailers who wish to offer greater variety of inventory, without the liability associated with purchasing, storing and filling those items, Young says.
The luxury market is already ahead of the curve in terms of online consignment and repurchase programs and this trend will accelerate in 2022, according to Young.
“Particularly given the emphasis many young consumers place on sustainable products and the loathing for fast fashion, which has been associated with negative environmental impact and ethically questionable labor practices, retailers will pivot to testing new business models aimed at solving some of these problems, ”she says.
Supply chain problems will fade away
This may be wishful thinking, but a few publishers predict that supply chain issues will gradually improve in the second half of 2022. Of course, it all depends on how the coronavirus pandemic is brought under control. world. “Factories and ports will gradually return to normal after the holidays, unless there is a big resurgence of the coronavirus. Then all bets are off, ”says editor Don Davis.
Inflation will be the new subject of retail disruption
The United States is now experiencing the highest inflation in almost 40 years. The consumer price index in November was 6.8% higher than it had been a year earlier.
This likely reflects rising costs and supply chain constraints, says editor James Melton, who has tracked supply chain challenges throughout the year.
“Inflation is more of a symptom than a disease,” says Melton.
Heading into 2022, inflation will impact the retail industry in several ways, says Paul Conley, director of editorial research.
“Inflation in the price of goods puts inflationary pressure on wages,” Conley says. “This could prove disastrous for retailers who are already paying higher prices to find employees.”
But inflation offers breathing space to raise prices in ways they haven’t been able to do in years, says Melton.
“Unless the economy goes into a recession, these higher prices could remain anchored, just as supply chain costs, like the prices for shipping containers across the Pacific, begin to rise. normalize, ”Melton said.
Inflation is also good news for discount stores, says Conley, which is a growing category online, adds Young. While discount merchants like TJ Maxx have not been quick to invest in e-commerce, the pandemic has changed everything. In fact, discount home retailer HomeGoods (owned by TJX Cos. Inc., No.63 in the 2021 Digital Commerce 360 Top 1000) launched an ecommerce site in late 2021. .
“Between the fallout from inflation this year and the success some of these guys have been testing omnichannel services during the pandemic, this group has made progress and will continue to do so in 2022,” said Young.
Weddings, Delivery and the Feds
Other trends Digital Commerce 360 publishers are watching in 2022 are a marriage boom, more antitrust issues for Amazon.com Inc. (# 1 in the Top 1000), and mergers in the latest delivery space. kilometer.
“After the cancellation and postponement of weddings in 2020 and bleeding in 2021, 2022 will be a boom in wedding-related shopping, including formal wear,” says April Berthene., editorial director, retail.
More happy unions could ensue in what Conley calls the “super-fast” delivery space. After rumors that DoorDash would purchase Gorillas on-demand grocery delivery service never materialized, DoorDash announced that it would launch its own on-demand grocery delivery service.
“Look for millions of dollars to trade hands over the next few months as investors scramble to buy existing suppliers or launch new ones,” says Conley. “The most likely deal is that GrubHub will buy gorillas. But Jokr, Fridge No More, Buyk, and many other vendors are all likely buyout targets.“
And finally, 2022 might not be the happiest year for America’s biggest online retailer, Amazon, Davis predicts.
“The Biden administration has put together a dream team of anti-Amazon trustbusters,” Davis said. “In 2022, they will attempt to restrain Amazon’s power with legal challenges that will still be pending long after Joe Biden leaves the White House.”