4 fun and somewhat conservative retail forecasts for 2022
Predictions. Predictions. Predictions.
It’s that time of year again, when every retail expert, from yours truly to the guy with half a dozen followers who love to troll people on LinkedIn, offers their thoughts on this. that the future holds (pun intended very well).
2021 is coming to an end and good riddance!
From a satirical expert’s perspective, the past year has been about as boring as the English patient. Retailers (and headlines) were so overwhelmed with talk of everything from supply chain disruptions, staff shortages, and inflation, to a little something still called a “pandemic,” that it left very little room even for the most well placed. beard on the most untimely blunder of a multi-million dollar CEO because this year has been, well, damn tough for just about everyone. Everyone, needless to say, deserved a little break.
So, as the year draws to a close, it’s time to throw 2021 into the trash of retail history and look to the future. It’s time to predict tomorrow’s headlines today.
And, to do this, let’s start right away:
Prediction # 1 – Amazon’s New Department Store is Real and Spectacular
Last August, news broke that Amazon plans to open a new type of department store. The planned locations would be around 30,000 square feet (much smaller than a traditional department store), the stores will carry an assortment of clothing, electronics and household items, and the first locations would be in California and California. Ohio.
The concept, if it goes as described, will likely be Amazon’s biggest and most daring move in physical retail to date. . . if he hadn’t just opened a 40,000 square foot Amazon Fresh “Just Walk Out”
In a move that has garnered very little attention, Amazon put its full-scale “Just Walk Out” technology in the grocery store the week before Christmas. This move was important for two reasons.
First, it is difficult to make âJust Walk Outâ technology work at this size and scale. Really creepy.
By comparison, no other retailer has approached more than 3,000 square feet as a live public operation at this point. Amazon took its technology roughly the same size when it first opened Amazon Go in 2018 to 40,000 square feet in just over three years, so it makes sense to conclude that Amazon now thinks the technology is ready for anything.
Second, which brings me back to my prediction, it is also reasonable to assume that the same technology could cover the footprint of a 30,000 square foot department store, implying that it is all the more likely that the rumored department store will be a “Just Walk Out” too.
So imagine, imagine a big Amazon store where you walk into the store, try whatever you want and walk out. All of this means there’s no longer a need to wait in lines or have to report an untraceable Macy’s employee to unnecessarily fold and remove security tags from their clothing.
There is already a lot to like about this idea.
But, if one extrapolates the technology platform to also include a new wrinkle, RFID, then things get even more interesting as the likelihood of smart dressing rooms takes on new dimensions, as do other digital interactions. in the store or on his cell phone.
Or, put it another way, the retail world might envision the coming advent of the first truly personalized store in the United States.
2021 was the year Amazon redefined the modern grocery shopping experience. 2022 will be the year it will be the same for the dying department store.
Prediction # 2 – Instacart will become the company formerly known as Instacart
After a lightning boom, fueled by a pandemic in 2020, Instacart began to lose the polish on its third-party delivery vehicle car wax in 2021.
There are now a number of indications that things will get worse before they get better too.
First of all, senior executives started to leave the business faster than a Gopuff delivery. In the past month, Carolyn Everson, former president of Instacart, and Seth Dallaire, formerly chief revenue officer of Instacart, both left the company.
Second, Instacart has started to position itself as an âas a serviceâ platform for almost every aspect of retail – delivery, micro-warehousing, curbside pickup, and more. which, especially the concept of micro-warehousing as a service, couldn’t be further from them. No matter how you slice it, it’s hard to be a company that says “yes” to everything.
Third, retailers have understood the situation. For example, retailers are desperate to reclaim their first-party relationships with their customers and deliver in-house to cut costs, and some of them have even started deploying delivery orchestration software that allows them to offer deliveries to several third parties. party services, instead of being beholden to a single vendor, relegating Instacart deliveries to long-term white label status forever.
Fourth, and finally, they have a young CEO at the helm, Fiji Simo, who spent 10 years at Facebook and whose experience is pretty much the furthest from operations and logistics, even in the metaverse.
All of this implies that Instacart is about to have a difficult year. Its valuation will suffer and, therefore, no one should be surprised when it becomes an acquisition target.
The likely buyers?
DoorDash, of course, as both have do the partnership dance already, and DoorDash also feels a lot further down on the next steps it will take to differentiate itself within the space, like open their own storefronts and building on its strong position in restaurant delivery.
And, finally, don’t be surprised if Walmart
Doug McMillon had the guts to buy something of much less strategic value before (Jet.com), so how do you say he would no longer pull the trigger for Instacart at the right price?
Prediction # 3 – The buy now, pay later craze gets even crazier
The BNPL craze took off like a rocket last summer when Square acquired Afterpay for $ 29 billion and hasn’t looked back since.
Adobe recently reported that BNPL sales jumped more than 400% last November compared to 2019. This is a surprising statistic to say the least, but which becomes even more surprising when one realizes that BNPL’s activity mainly takes place online at this point. Most of the retail trade, where between 80 and 90% of sales are made, that is to say in stores, is still relatively untouched by the BNPL trend.
It is therefore only a matter of time before traditional retailers continue to realize that, first, BNPL is a superior credit instrument to traditional credit card financing when used and understood in the right way. , and second, they can start to look at ways to enable their customers to use it in their stores. the BNPL conversion impact in the online world is so huge it’s easy money to take once it hits the stores.
Smart retailers love Target have already started the process for this to happen. 2022 will be the year when many more retailers follow the trend.
Prediction # 4 – Bed Bath & Beyond’s
Private brand strategy is exposed
Bed Bath & Beyond CEO Mark Tritton arrived at the end of 2019 and told the world how he would transform Bed Bath & Beyond one new private label at a time.
However, the problem with this strategy, the one Tritton brought with him from his days as Director of Merchandising at Target, is that it is built on a false strategic premise – one called the “Product Problem.” which is the mistaken belief that if one retailer puts better products on their shelves than the next, people will come.
Well, they sure won’t, Ray. Scratch that off, Mark.
The reason is that, even though the private label products that are being introduced at Bed Bath & Beyond are all mind blowing, people will always start to buy more and more of these products online over time, which means that they on their own cannot function as store traffic. Drivers.
People often forget that Target’s private label products work well because they also work inside a bigger hook – Target’s one-stop-shop allure.
What is this attraction for Bed Bath & Beyond? The coupon?
Unfortunately, that answer is still undetermined, which is why in 2022, when the new private label lines are all put away and launched on the shelves, the sequel c Bed Bath & Beyond will soon turn to each other. , look and say collectively, âOh shit, what do we do now? Our strategy has no clothes.