With the massive pandemic wave, there’s a considerable drift in the retail market. The good going retail business took a turn at the end of 2021 and faced a downfall; many hardships and challenges became a milestone to overcome. Waving to the New Year 2022, remains uncertain because it started with a profound impact of the COVID-19 resulting in a slow retail market.
For the retail business, it is highly essential to look after the factors responsible for the significant shift. We have extracted some noticeable reasons after analyzing the retail market trend.
Let’s have a glance at these dynamics of the retail market:
- Unavoidable fluctuations in supply and demand.
With the Pandemic banging its head worldwide, the supply chain faced a lot of thumps. Despite the poor retail trend, shoppers continued to shop but, due to the COVID-19 restrictions worldwide, the retail supply networks could not function properly. Trade stuck, shipping delayed; these consequences made merchants suffer due to increased wait times and shipping costs. Moreover, the manufacturers failed to meet the stock demands.
The freight rates skyrocketed globally.
Let’s consider this massive uprise – The shipment prices of goods from Asia to the U.S shoot up from $2000 in 2019 to $25000 in 2021.
- Inflated Discretionary costs.
Undoubtedly, increased federal aid, including unemployment support and stimulus checks, has maintained retail sales. Still, we’re here with the 3rd year of Pandemic, which means there’s very little money to spend on discretionary retail items. The discretion prices inflated at various outbreak stages, including dining–outs and cinema tickets, sports matches, and holidays. Inflation rates jumped to 4.8% in December of 2021 from 4.7% in November and October,
- Less flexible options.
Due to the Pandemic on shores, there were specific changes in the “consumer buying behaviour” as the traditions of precautions continued. People found online shopping, local pick-ups and online payments highly convenient, nearly 64% people loved online shopping and local pickups. The retailers who could not offer more flexibility were more likely to miss upon the sales.
- The Industrial Average Selling Price (ASP) story.
Amidst the situation, manufacturers found it difficult to create and ship the products. They focused on the products with high profits, which increased prices in the retail market. The average selling price of every product was touching the clouds.
As much as an increase of 25% was experienced by many products. The customers were already not financially stable, and this story of ASP led to lower demand levels.
- Older Point of Sale (POS) version.
For a flourishing market, updated technology was needed to put the merchants at ease and provide a unified online and in-store shopping experience. Old Point of sale was no longer adequate for the market trends.
Many retailers started practicing the new trends and were able to maintain the business; on the other hand, some were still facing challenges.
The best thing about POS is the retailers could manage their enterprise, including sales, inventory and analytics.
Considering all the points mentioned above, we have some suggestions for the retailers to overcome these scenarios and experience a seamless rise in the business.
These are some suggestions to overcome:
- Hybrid retail
The outbreak has caused a significant shift in the customer’s buying behaviour, and now it’s time to add more convenient shopping options to the bucket. The hybrid retail model needs to be implemented to get both online and offline shopping possibilities. This strategy tends to provide a unique shopping experience and also keeps the customers loyal to your brand.
- Technology and automation
For better time optimization and operational efficiency, the retailers could adopt technology automation. With so many advancements, it’s better to have your own auto operating machines, apparatus and devices. This way, you will be able to meet customers’ individual needs, which in turn will play a considerable revenue booster.
- Live streaming and Social commerce
With the growing demands of online shopping, the year 2022 will be highly impacted by social commerce and live streaming. People are more active on social media, and it’s imperative to launch your business where their interest is embedded.
The new trend of following social media influencers is at its peak. Retailers can collaborate with the influencers for live videos, blogs or V-logs on the media platforms like YouTube, Face book and Instagram.
It’s true; people search for you over the internet before they reach your brand. Therefore, there’s an actual need to maintain your online business profiles.
- AI and Augmented Reality
Moving beyond customer satisfaction, artificial intelligence and augmented reality tactics have a superimposed impact on the retail market. The retailers striving to provide the best customer experience should implement this trend. It enables the buyers to interact with the products and brands on a virtual mode like try on, try out and personalize your product creation.
Let’s see how it works; for instance, if you are a cosmetic dealer, you can create an app where the customers will be able to try the lip shades or other products virtually by looking into the camera.
- Buy now, pay later and Alternative paying methods
You will be astonished will the increase in sales with the BNPL options. It started in 2021, and this feature smites people. For example, according to a survey performed in 2021, individuals aged 18 to 44 were interested in the BNPL feature because it does not require people to invest a large chunk of money all at once. A person can easily pay later for the purchase in easy installments.
Last year this feature was only offered online, and now it will make a difference in retail stores too! With the Buy now and pay later, the retailers should also consider providing their customers with alternative payment methods like card payments, online UPI payments, Bank transfers etc., which will also be helpful for the retail business.
Take away for 2022
A sum up, you’ll see overall growth in the retail industry and also there will be many different opportunities to enhance your business.
Everything needs a change; It’s time to modernize your business, meet customers’ needs, and serve better commitments. After all, the pricing of goods and shipment remain a challenging factor; we must consider dwelling upon innovation to stand out in the market amid the Pandemic.