Allume Group

This article was originally published in Chain Drug Review.

Congratulations, you made it! 2021 was a year of transformation for both brands and retailers. Massive supply chain disruptions forced us to pivot when products ran out-of-stock. Retailers rushed to initiative delivery programs to accommodate shoppers’ needs. And as costs skyrocketed, further adjustments were made to ensure our endeavors were financially sustainable.

As we think ahead to the rest of 2022, it’s important to recognize these transformations and the journey we went on to make them. They took initiative. Persistence. Know-how. Courage. Resources. Most importantly, they took people, and during a time where labor was scarce, people overworked and overwhelmed, and a worldwide pandemic breathing down our necks.

Looking ahead to 2022 and beyond, here are some of the most pressing shopper and commerce themes:

Shoppers aren’t looking for perfection — they’re looking for honesty on where brands, and retailers, are on their journey to a more sustainable future.

Grocery and health and personal care seem to have sustained the most change of all categories. Although overall e-commerce penetration only increased less than two percentage points in 2021, the grocery category in particular saw tremendous growth online, with Winsight Grocery Business citing that 43% of Millennials shop for most of their groceries online.

And while many shoppers still cite price and assortment as primary factors in their decision, ultra-fast delivery has taken off, with over $6 billion in external funding channeled to companies such as Go Puff that provide those services, according to Coresight Research and public records.

In addition, lack of product availability and fewer brick-and-mortar shopping trips drove shoppers to be willing to brand switch at significantly higher rates. According to a recent study by McKinsey, for example, 75% of shoppers cited trying new shopping behaviors, versus 45% pre-pandemic.

Lastly, social commerce and livestreaming have taken hold as shoppers spend an hour or more per day online versus pre-pandemic.

CVS has focused on making their brick-and-mortar stores health care destinations, while most major players in grocery and drug have a retail media platform to collect advertising revenue from manufacturers. Kohl’s leans into its partnership with Sephora to help cover real estate costs as physical store sales dwindle. Walmart offers free Spotify subscriptions for shoppers who join Walmart+.

Amazon opens up additional channels for subscription and advertising revenue such as Luna (online subscription gaming) and Twitch (livestream gaming). Their rumored acquisition of Peloton or another digital fitness ecosystem would present them with an additional platform for advertising, and a rich one at that. Exercise videos are the consumables category of digital content, as shoppers often watch them repeatedly, driving repeat traffic to subscription platforms.

In addition, GWI’s annual trends report shows that gaming has overtaken all forms of media in terms of hours spent, including broadcast television, social media, and others. Streaming services, social media, and digital commerce compete for our hours and minutes. We’re in the era of the attention economy, and given how compelling the virtual world is — and its ability to add dimension to our flat, two-dimensional Zoom world — virtual commerce for physical goods is coming soon. The metaverse is the new marketplace.

The spatial environment feels convincingly real, creating opportunities for shoppers to interact with all types of virtual products and shopping environments in physical ways. Vans, for example, has a world and shopping environment in Roblox, where players can purchase virtual merchandise while performing skateboarding stunts and learning about the brand experience.

First movers are rewarded.

Key Takeaways

To maximize these future opportunities with gusto, whether you are a consumer brand or retailer, consider the following:

Andrea Leigh is founder and chief executive officer of ­Allume Group. She can be reached at andrea@allumegroup.com.

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