The pandemic. Environmental fears. Uncertain growth in the economy... It’s safe to say there are many factors affecting the future of retail. Moreover, shoppers are becoming increasingly savvy about exactly how and where they spend their money. Arguably no business can afford to be complacent.

How to stay competitive? We’ve compiled 20 of the most significant retail predictions for next year

With 66% of UK consumers caring about climate change, shoppers are starting to consider a brand’s environmental footprint, along with how they treat their staff and their commitment to social justice more generally. In response, brands are adopting new policies. These vary from carbon labelling and comprehensive recycling, to sourcing products ethically, hiring diverse employees and looking after mental health.

Clothing retailer H&M, for example, has a “Conscious Collection” which features products that contain at least 50% sustainable materials such as recycled polyester and organic cotton. Meanwhile in the automotive industry, Ford Motor Company manufactures its Escape and Focus vehicles using 80% recyclable materials.

Among the various effects of COVID, people have grown more concerned with their overall health and wellbeing. Shoppers are spending increased amounts of time and energy on finding products to look after themselves.

For example, a Hartman Group report found that nearly half of consumers look for foods and drinks labelled “plant-based”, and the trend of “Veganuary” continues to gain popularity. The rise in sales of “Athleisure” clothing – wearing, say, yoga pants around the house – also points to a focus on health.

Lately, many of us have spent significant amounts of time at home and this has brought about a keen interest in areas such as home cooking, decoration and gardening.

Arguably this trend might fade after the pandemic. But so far, even as society begins to open up again, spending on the home has continued. In fact, the global home improvement market is predicted to rise to 1,010 billion USD in 2027, compared to 763 billion USD in 2020.

Buying online doesn’t necessarily mean buying from far and wide. National movement restrictions have meant people stay in their local area to shop and to find ways to entertain themselves. This trend is likely to endure as local independent shops are seen as being more fashionable and ethical.

The extent of this shift does vary, though. People who work from home are more likely to shop locally – 65% say they now actively do more to support local businesses, compared to 45% of people who work away from home.

With the fashion industry accounting for around 10% of greenhouse gas emissions, people are increasingly aware of the impact of their shopping. They seek out brands who use sustainable materials and low-waste practices.

At the same time, they are looking to buy second-hand which no longer means visiting charity shops but going online to specialised websites where they can resell fashion items and buy secondhand products, including those that are designer or rare. According to a global report by Thredup, the resale market is growing at a rate that is 11 times faster than traditional fashion retail.

While there’s uncertainty over the long term effects of the pandemic, it seems likely the general shift to online shopping is a permanent change. A 2021 study by PwC found that more than 50% of people say they’ve recently become more “digital”. More of us are choosing online over physical shops for the sake of price and convenience – but also factors such as personal safety, the variety of choice, and the ability to see customer reviews.

The extent of the shift to online shopping does vary across the world – shoppers in Brazil, Mexico and Egypt believe they’ve changed the most, for example – but it’s a matter of degree.

No longer is online shopping the domain of the young. 75% of adults over the age of 75 use the internet every day, and 28% of online purchases are by senior citizens. Meanwhile, people in their 60s are the wealthiest demographic in the UK.

It’s clear that appealing to older shoppers is a wise move for certain retailers. How can they cater to people’s needs and tastes? How about making older people feel understood by a brand? Often, audience research can prove helpful, highlighting specific ways to improve a website and marketing strategy.

This will surprise few of us but it’s worth remembering how popular mobile shopping has become. In 2021, 73% of all online purchases were completed on mobiles. This seems unlikely to change, especially since the pandemic has encouraged us all to become more reliant on technology – for example, needing to use mobile apps to make medical appointments and to order food in a restaurant.

Retailers must offer mobile-friendly websites that fulfil shoppers’ expectations of being straightforward and easy to use.

Part of the appeal of online shopping is the convenience. An otherwise great shopping experience can be ruined by a checkout process that is confusing or complicated. Most likely we’ve all experienced the tedium of entering lots of personal details only to find the sale hasn’t gone through. Perhaps we gave up on the purchase all together.

Indeed, 87% of shoppers will abandon a cart if they find the checkout process lacking.

Having the right software, then, is critical for retailers. Clear instructions must be combined with easy payment options and fast site speed.

A reasonably priced product. But then a large shipping fee and three weeks’ delivery time? It’s become the norm for shoppers to refuse such a prospect. They know that other retailers can send them their shopping both free and quickly.

A 2021 report by Jungle Scout found that 66% of shoppers expect free shipping on every online purchase. And 91% expect to receive orders within a week. (It’s also interesting to note that 80% of people expect parcel tracking and to be notified when their order has left the warehouse.)

More and more, shoppers demand an overall positive experience with a brand. And part of this includes the product packaging. Some people might look for the use of recycled materials, others simply crave an eye-catching design. Whatever your customer values in their packaging, make sure not to underestimate this element of your offerings. In an American study, 72% of people said they were influenced by packaging.

What was once considered futuristic is now commonplace. Retailers can increasingly use artificial intelligence in their operations, from applying machine learning to inventory management in their warehouses, to automating marketing activities and offering website customers fast interaction through chatbots.

The ability to forecast is particularly exciting to retailers. Huge amounts of raw data can be tracked and made sense of, providing insights into effective pricing strategies and product placement. In physical shops, technology such as heat mapping uses a combination of cameras and “computer vision” to reveal which products a customer picks up and their journey around the aisles.

To encourage consumers back to physical shops, retailers need to offer enough engaging experiences. This might involve adopting features that allow people to use their smartphones to, say, access product reviews and sign up for exclusive events.

For more advanced retailers? AR and VR technology can personalise a shopper’s experience. For instance, “smart mirrors” let people try on clothes virtually. And in the world of furniture retail, smartphone cameras can allow shoppers to see how a new sofa or table might look in their own home.

When omnichannel shopping, consumers can buy products across multiple places: their laptop or phone, or in physical shops. Although the pandemic has further increased the popularity of online shopping, customers still value being able to visit the brand at their local high street or retail area.

These bricks-and-mortar shops establish a sense of trust and familiarity. Moreover, they can be used to tell customers about new products and to enhance their brand image. According to research, opening a new physical shop typically increases traffic to the retailer’s website by 37% in the following financial quarter.

As shoppers continue to be highly conscious of their physical environment, it’s important for retailers to consider the design of their shops. The use of plastic screens at checkouts can help to ease anxiety, for example, as can clear signs for queues and an overall sense of orderliness. No doubt we’ll all be more hygiene-aware for years to come.

With third-party cookies being phased out by Google Chrome, online retailers will need to focus more of their efforts on first-party cookies. The upshot? They’ll have to gain the trust of their customers in order to credibly ask for their information – and in doing so, foster better relationships. Shoppers will expect more personalisation across the marketing channels; for example, for a brand to tailor marketing emails specifically to their wants and needs, and to show them only the most relevant products on their website.

The popularity of these looks set to grow in 2022 as the speech-recognition technology continues to improve, making it easier to talk into our phones rather than to type. According to Google, 27% of people on the internet now conduct voice searches.

It’s worth paying attention to how this trend affects online marketing. For example, SEO-specialists may consider that customers will likely use more natural, everyday language when performing a search query. Online marketers would therefore do well to review their keyword targeting and general strategy.

The scenario: a shopper is on their favourite social media platform and sees something they’d like to buy. Instead of clicking through to a third-party website, they can complete the purchase there and then. The ease of such transactions means social commerce is set to increase in popularity. TikTok has recently partnered with Shopify, for example. And Facebook is looking to create a more personalised shopping experience for its users by introducing Facebook Shops.

As for Instagram, this platform continues to offer the most sophisticated social commerce in the market. Here, retailers benefit from making their products easily discoverable, the ability to run adverts, and a high user engagement rate – with 90% of Instagram’s users following at least one business.

In past years, influencer marketing focused on heavily edited product shots and selfies. The idea was to look immaculate. With shoppers growing more wary of this superficiality, brands are now partnering with influencers who can create a sense of authenticity. What does this mean in practical terms? Fewer highly produced adverts, and more videos and livestreaming to encourage shoppers to get to know the people behind the products.

If a shopper doesn’t want to go to physical shops, they can rely on livestreaming to easily learn about new products, see celebrity endorsements, and – for example – find inspiration on how to style their wardrobe. This might take the form of a virtual event where a shopper can ask questions and chat with the organisers. Before the pandemic, livestreaming was mostly enjoyed in China but it’s now becoming popular worldwide, especially with young consumers. The beauty brand Estée Lauder, for example, saw a 60% rise in its online sales in the first quarter of 2021, thanks to its shoppable livestreams and other improved digital services.