Year 2022: The Road Ahead
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A few weeks ago, we reviewed our 2021 research in a Retail Paradox Weekly article, summarizing our findings this way:
There are certain themes that are highlighted again and again: ‘disruption’, ‘speed’, ‘agile’, ‘flexible’, ‘real-time’, ‘sustainable’, ‘socially responsible’, etc. Taken as a whole, the message is that consumers are demanding change, and that it behooves retailers to understand where those consumers are going and what they care about – particularly the up-and-coming ones. This is at odds with the legacy ‘if we build it, they will come’ model.
Those findings inform our research focus for 2022. As we said in the December 14th article, the retail industry is at a real fork in the road – an inflection point that is driven by a new generation of consumers who have new expectations. Working with our advisory clients, we arrived at a list of topics that we expect will help retailers and those that work with retailers to meet the demands of today’s marketplace.
And so, without further ado, here’s what RSR plans to cover in 2022:
Sustainability In Retail
In RSR’s 2021 study on the state of Merchandise Planning, retailers identified consumer concerns about sustainability as a top-5 business challenge. For retailers, addressing the sustainability challenge is a complex undertaking. Should they focus on efficient and more environment-friendly operational issues, ethical sourcing, or social issues – or all of these challenges? Retailers are learning that consumers and employees care more about climate change, biodiversity, and the scarcity of resources than ever before. The purpose of this research is to find out if and how retailers are addressing any of these challenges.
The State Of AI In Retail
RSR typically only benchmarks retailer attitudes about any technology in the context of the business challenges and opportunities that it is trying to address. But Artificial Intelligence (AI) and Machine Learning (ML) technologies are showing up as important enablers in so many areas of the business that they require a closer look. This has become especially important as retailers consider “digital twin” solutions that would create near real-time visibility into processes and physical assets throughout retailers’ extended ecosystems. It is our belief that senior management must steep itself in understanding the power inherent in AI and ML-based applications. The purpose of this research will help us gauge if and how well decision makers understand the abilities and implications of these valuable new technologies.
The Agile Supply Chain/ Strategy & Execution
In RSR’s 2021 benchmark on the state of the retail supply chain, we noted that the retail world didn’t anticipate disruptions caused by a resurgence of the COVID-19 virus, or of big changes in consumers’ appetite for more products in lieu of services. So, while order quantities for products have reached new highs, the supply chain’s ability to get them to market in a predictable and timely fashion has been severely undercut by a number of factors. RSR believes that changes in retail supply chain processes and supporting technologies which retailers viewed as important in 2020 and 2021 have become even more important now. The purpose of this 2022 research is to uncover how much progress retailers are making to adapt their supply chains for more flexibility, agility, and speed.
New Imperatives In Merchandising
RSR’s 2021 study on the state of merchandise planning focused on the early stages of the planning process, particularly product development stages for private lavel products. We highlighted how private label programs can be an excellent hedge against competitive price pressure and as an effective counter-measure against the rising costs associated with bringing products to market, and that retailers need much more flexibility in their general merchandise planning processes to be able to respond quickly to sudden changes in either supply or demand in these uncertain times. In our 2022 study, we will focus more closely on the execution side of merchandise management.
The New Retail Workforce
In past RSR benchmark studies on workforce management, retailers have told us that they value their employees, but continue to them just as they always have – as a fungible commodity with limitless supply. But now in 2022, retail workers and would-be employees are simply no longer willing to accept this imbalance. In the wake of a pandemic, workers matter – more so now than ever. But to compound matters, 15 years of constant smart-phone-use has taught consumers to solve their own problems on the occasions when they do travel to stores, with shoppers reporting consistently less faith in employees’ ability to help them with each passing year. A whole new kind of retail workforce is needed. What is a retailer to do? RSR will seek to answer that question in this 2022 benchmark study.
Personalization And The Future of Promotions In Retail
An enormous amount of money is spent annually across the consumer products and retail industries to create consumer demand. In the past, that spend has been delivered via traditional channels like radio, TV, and print, as well as through coupon programs and vendor-supported price reductions. But now in this digital age, advertisers and retailers have an opportunity to deliver personalized value offers to those consumers that are most likely to take advantage of them. What does it take for retailers to move away from a one-size-fits-all positioning to one that offers highly relevant and personalized value to consumers? RSR’s 2022 benchmark will try to get the answer to that question.
What Keeps Retail Execs Up At Night? The State of Operational KPIs In Retail
There is no shortage of challenges keeping retail executives from a good night’s sleep. Recent data shows that shoppers are more likely to start any given product journey on Google or Amazon.com than they are at a brand’s website. Supply chain woes continue to plague the industry with no end in sight. Traditional marketing tactics – which have been successful for generations – are no longer reliable in the face of new media platforms. The longstanding workforce model no longer “works.” And in many cases, the technology industry’s tendency to overhype the promise of any given year’s “golden child” technology has jaded retailers’ beliefs as to what the latest solutions can do – realistically – for them. How is an executive to prioritize the best options in the face of such chaos? RSR’s 2022 benchmark aims to find out how winning retailers do just that.
The State of Instore Technology
Up until recently instore point-of-sale systems were at the center of retailers’ technology architectures. But those days are over; consumers are now using 24X7 internet connected and mobile technologies to inform nearly every lifestyle decision, and they are demanding the same kind of access to information and functionality in the store that is taken for granted on their mobile phones. What does this mean for the store of the future? RSR’s 2022 benchmark will uncover the business challenges and opportunities that compel retailers to make major investments in customer-facing technologies in the stores.
The State Of Location Analytics In Retail
Sudden shifts in how the marketplace operates underscore the importance of location analytics for efficiency, resiliency, and business success. In our 4th look at location analytics, we learned that retail’s understanding of “location” has taken on a new meaning. What is new is geo-location data, usually created by “internet of things” devices like mobile phones, electronic tags, smart devices, etc., and the new insights these new data create. Our 2021 study underlined that retailers had a lot of work to do to take full advantage of what geo-location data and analytics has to offer, and that the gap between the value that retailers assign to the various analyses and the number who are satisfied with their efforts to date was glaring. Our 2022 benchmark will seek to reveal how far retailers have gone to realize the value of location analytics.
The New Retail Customer Experience
Finally, we would be remiss if we didn’t take a long look at how consumers are using technology to both inform their buying decisions and to begin their shopping journeys. New user interfaces (for example, voice recognition, virtual reality, streaming video) are increasingly being used by consumers to make smarter shopping decisions. In this fast-moving world, how are retailers responding to be the destination of choice for digital-savvy shoppers? Our 2022 look at the new customer shopping experience will find answers to that question.
Summing Up RSR’s 2022 Research Agenda
Consumers today have better access to more information than any generation in history – 24X7, any time and anywhere. And younger shoppers are more community and environmentally oriented than the older generations of shoppers – they know what they want and what they don’t and are intolerant of leaders and organizations that make hollow promises in exchange for their loyalty.
Retailers know that they have to remake their business models in order to remain relevant in today’s world. We are confident that our 2022 benchmark studies will highlight how businesses are meeting today’s challenges.