There’s no question that the retail sector lived through another market-shaping year. Consumer behavior changed literally overnight in 2020, thanks to the pandemic, and continued throughout 2021.
Consumer preferences drove retailers to adopt new technology at a pace that normally would have taken years but were forced to undertake in mere months. From online sales, curbside pickup to home focused products, retail marketers still are finding ways to get ahead of changing customer requirements and demands. The retail landscape is going to continue to evolve, and at a fast clip. We’ve seen what 2020 and 2021 brought to the fore. So, what’s in store for 2022? Here are some of our predictions:
#1: Need for speed
Digital acceleration defined the pandemic era. COVID-19 took the volume of digital transactions to levels not previously seen. This isn’t likely to let up and means marketers will still be challenged to keep pace. A recent Incisiv report commissioned by Outlier found that more than 65% of marketers and insight leaders were dissatisfied with the speed of customer analysis and analyst support. Many retailers lack mature digital capabilities such as a 360-degree real-time view across all their data sources, resources to get insights to the right people at the right time, and the inability to conduct deep data analysis.
The deluge of data will continue to rise, from shopper behavior to product sales, inventory, delivery, and complex information in the supply chain. Moving into 2022, retail marketers will adopt more sophisticated data analytics technologies to combat increased unpredictability, keep up with the competition, and positively affect their bottom line. Without an AI-powered solution in place, retailers will not be able to analyze data frequently and will miss out on adapting to changing consumer behavior.
#2: AI will improve retail and increase sales
Artificial Intelligence has proven to be a magic arrow for businesses, especially when it comes to data analysis. With AI-powered analytics tools, retailers will be able to use tools that analyze masses of data. Once data is analyzed across a set of multiple internal and external data sources, analysts and business users need to quickly digest the information. Long gone will be the business intelligence (BI) dashboards that only serve up the insights for review by data analysts. The analytics tool stack must include timely, easy-to-understand insights for business users to make immediately informed data-driven decisions. Retailers will have to be alerted to changing trends and run their own simulations to choose the best actions to take.
The combined output from an automated business analysis application will result in revealing unexpected insights from patterns to trends to data relationships, without the need to formulate queries or write code.
#3: Lack of analyst support will continue
Online and offline shopping is now the norm, whether the consumer places the order themselves or they have help. For instance, a customer’s fridge may decide to reorder food or a car will pay for its own parking space. According to Forrester, 60% of adults in the U.S. prefer retailers that offer free return shipping. Brands will come to depend on how data is shared internally to make quick decisions; decisions that impact how they present products and make moves to reduce returns, which have seen a significant increase over the past year.
While retail leaders will contribute more budget to their tech stack, at least 75% will continue to miss the ROI mark due to inadequate buyer insight. This will require marketing teams to have dedicated data analysts who are supported with the right tools and technologies. In 2022, retailers will begin this transition.
#4: AI-powered inventory management
The pandemic has all but upended the supply chain. Requirements are more challenging than ever and historical data is no longer sufficient for predicting demand. Subsequently, there’s an increased reliance on real-time insights and visibility for products on the shelves and in transit. Retailers need to make supply chain adjustments in real-time to immediately respond to demand and keep sales in motion. Across the board, retailers will seek out better insights on demand planning, manufacturing, fulfillment, transportation, and warehouse operations. AI-powered applications will also have an impact here and help retailers better monitor the supply chain.
With AI tools, retailers will start to realize operational efficiencies. Smooth inventory management will allow retailers to get product from suppliers and warehouses to stores quickly – without glitches – to better capitalize on product promotions, sales, and seasonal and off-season trends.
Retailers are widening their digital strategies and embracing technologies that give them a leg up on delivering a strong customer experience. While predictions may change in an uncertain environment, one thing can be counted on: retailers that implement AI-powered automated analysis that is easy enough for business users to understand and powerful enough for analysts to use deeply will always welcome an unexpected trend.