Trends Shaping Retail for Fall 2022
The summer days are winding down and people are preparing to readjust their wardrobes to enjoy the new Fall season. From back-to-school, Labor Day, Veterans Day, and the Thanksgiving holiday, there are plenty of upcoming seasonal catalysts shoppers will be participating in that retailers should merchandise accordingly for. 2022 has shaped out to be a difficult year so far for many businesses, a stark contrast from last year. As Inflation and fears of recession persist, we go over key strategies to consider to maximize sell-through and shopper’s satisfaction coming into the second half of 2022.
Understanding the sentiment of shoppers and executing a strategy that aligns with their needs early will be key advantages retailers can utilize this upcoming season. According to the Bureau of Labor Statistics, prices of Apparel prices overall are up 5% compared to last year with the highest categories being footwear up 6.2%, Women’s outerwear up 7.4%, and toddler apparel up 8.2%. Inflation remains the top worry for shoppers and retailers may find pricing new merchandise more difficult as it can alienate existing shoppers. About 56% of Americans feel companies are raising prices more than needed in order to boost profits, according to a late July survey of more than 1,000 consumers by consulting firm Deloitte.
To minimize the damage of inflationary pressures, value will trump loyalty according to a report by Salesforce. Half of shoppers are expected to switch brands to save money, translating into 2.5 billion shoppers globally who might decide against a product in favor of one that best fits their budget. Especially with the upcoming holiday season, Rob Garf, vice president of retail for Salesforce, recommends retailers should generate buzz by offering exclusive items to avoid having to compete on low prices as discounting with higher inflation may be challenging for many.
Maximizing Customer Engagement and Sales With Live Commerce
2022 has been a tough year for many retailers but some were able to overcome sales obstacles by utilizing Live Commerce which became a popular sales channel for many businesses in 2020–2021 and is showing no signs of slowing down. Its growing popularity is creating more intimate connections between brands and shoppers, with nearly 78% of businesses now using Live Commerce to build relationships and realizing a 10x higher conversion than conventional eCommerce according to a report by McKinsey. They also forecast 10–20% of all eCommerce by 2026 will come from live commerce-initiated sales. The rapidly growing channel provides several opportunities to drive value that retailers should implement to capture the changing behaviors of their online shoppers. Retailers that want to get started will first need to find the right platform to Livestream. According to Coresight Research, the following platforms ranked by popularity for Livestream Shopping are 1. Youtube, 2. Facebook Live, 3. Instagram, 4. Amazon Live, and 5. TikTok.
Early Holiday Promotions
The period between Black Friday and Christmas accounts for 30% of total annual retail sales making retailers think more creatively and strategically about how they give their promotions. The main theme with this Black Friday season is that it will become a multimonth shopping event with retailers looking to start promotions as early as October. This is because 51% of shoppers still anticipate product shortages to last into next year according to Prosper Insights and Analytics. Higher prices and emptier shelves are expected to be prevalent this season, and retailers must plan much earlier by procuring merchandise to maintain enough inventory for shoppers for the rest of the selling season.
With many obstacles ahead of this challenging Fall season, there is some good news Inflation is showing signs of coming down. According to the US Bureau of Labor Statistics, Inflation was up 8.5% in July compared to 9.1% in June. creating a merchandising strategy around higher prices is no easy task to strategize around. Even with inflation coming down, we still believe retailers should be positioned for any scenario by constantly delivering value, utilizing multiple sales channels, and preparing their inventory early will be key themes to be set up for success in the Fall and to wrap 2022.