3 Big 2022 Predictions for Retail—No, Stores Aren’t Going Anywhere

Brick-and-mortar outlets take on new roles, including facilitating livestream shopping

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After two years of accelerated ecommerce adoption, it’s safe to say that the retail consumer experience (CX) will continue to evolve at a blistering pace in 2022. But how will 2022 differ from the previous two years? In a word: complexity.

At the height of the pandemic, when stores were closed and vaccines weren’t yet available, brands focused almost exclusively on building out their digital capabilities. Now that consumers are returning to stores, brands must revisit and reinvest in their non-digital touchpoints as part of a seamless CX. In fact, as digital advertising prices skyrocket and retail rents plummet, forward-thinking brands will embrace stores as a critical driver of awareness, engagement and retention in 2022 and beyond.

Consider that stores accounted for 65% of Warby Parker’s net revenue in 2019, fell to 40% in 2020 due to temporary store closures and, according to its most recent earnings call, rebounded to pre-pandemic levels as of the third quarter of 2021. More important than revenue contribution, however, is “channel blur.” For instance, buy online, pick up in-store (BOPIS) is expected to drive 11% of ecommerce sales in 2022, according to eMarketer. Brands still need stores, even if they just serve as fulfillment centers. Retailers that ignore that fact, from a CX perspective, do so at their peril.

Indeed, stores will be a part of the CX whether consumers visit a store to shop or to pick up a purchase from a shoppable livestream. With all of that in mind, here are three predictions for 2022 retail.

Distributed commerce will just become commerce 

“Distributed commerce” has been a catchphrase in retail for the better part of a decade, and 2022 will be the year in which it becomes the norm. The term describes meeting consumers where they are—whether it be in store, on the brand site, on social platforms like YouTube and TikTok or via voice assistants like Siri and Alexa—and it has become a strategic imperative. As such, brands will be more intentional than ever about how they show up across channels because one size definitely does not fit all.

Ultimately, consumers don’t think in terms of channels; they expect to engage with a single, integrated brand, regardless of how they choose to shop that brand. In its most recent earnings call, for example, Best Buy reported that 42% of its online orders were picked up in stores. And Target fulfills more than 75% of its online orders from stores. Brands that deliver a seamless experience and provide consumers with flexibility—from making a purchase to initiating a return—will enjoy outsized gains in 2022.

And the stakes are high: “Shopping friction” cost the industry $213 billion as recently as 2019.

Stores will drive operational efficiencies

Notwithstanding calls from activist investors for brick-and-mortar retailers to spin off their online businesses, those who invest in a right-sized and reimagined store footprint will enjoy more sustainable growth in 2022 and beyond. Rent, as they say, is the new customer acquisition cost.

And with ever-rising consumer expectations around “click-to-door” speeds, many retailers find it less expensive and more efficient to fulfill online orders from local stores. Target, for example, estimates that it costs, on average, 40% less to ship orders from its stores than from its warehouses. Taking it a step further, Nike and Dick’s Sporting Goods hinted at allowing Nike customers to pick up online orders and drop off their returns at Dick’s stores as part of a recently announced strategic partnership. Proximity to the customer will be a competitive advantage for those who activate it.

Livestream commerce will gain traction

Many look to China—where eMarketer estimates 320 million consumers made at least one purchase via livestream commerce in 2021—as a leading indicator for the U.S. market. That position seems to ignore some critical differences in market dynamics and consumer behavior, but a key trend from a Chinese-owned company suggests that livestream commerce will gain traction in the U.S. this year: American users now spend more time on TikTok than YouTube.

Why is this important? While YouTube was founded as an on-demand, one-to-many broadcast platform, TikTok was purpose-built for live, two-way engagement, which is more conducive to commerce. American Eagle, for instance, collaborated with influencers Addison Rae, Madison Bailey and Outer Banks cast member Chase Stokes last month on a shoppable TikTok stream, where the average tune-in time was an impressive 11 minutes. And the New York Times recently reported that the hashtag #TikTokMadeMeBuyIt has been viewed more than 7 billion times.

Given these stats, we can expect more brands to pilot livestream commerce in 2022. And forward-thinking brands will activate stores both as livestreaming studios and fulfillment centers or pick-up points for livestream orders. It’s what customers will expect this year—retail marketers who don’t see stores and digital as separate parts of commerce but as the means to provide a seamless CX.