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10 unrestricted predictions for retail in 2022


Predicting the future in the dynamic world of retail, especially in the throes of a lingering pandemic, can be a wild ride. Nonetheless, I’m starting over, also coming to provide an update on what I’ve done with my list of 2021 retail forecasts.

So here, in no particular order, are my predictions for this year.

1. The stores strike back again. Again. Three years ago, I wrote a Forbes article not only to push back against the insane “retail apocalypse” narrative, but also to draw attention to the success of brick-and-mortar retailers by investing in their physical locations to embrace the fuzziness that is modern shopping today. It turns out that despite the acceleration of e-commerce driven by the Covid-19 crisis, physical commerce is still not dead. In fact, many retailers not only needed their stores to respond to the surge in online orders, but a new and elevated appreciation for the stores’ various hybrid roles (such as brand marketing, product showrooms, service centers and more) is emerging. . Aggressive store opening plans from established retailers and digital natives reinforce this idea. Expect to hear more statements about the brick-and-mortar “halo effect” and “rent is the new CAC” this year.

2. Moderate department stores will experience a dead cat bounce. With mall traffic returning last year and many of the department stores seeing dramatic year-on-year sales increases and a return to profitability, stories abound of the sector’s resurrection. . Don’t believe them. Moderate department stores have been hemorrhaging market share for a very long time and there is precisely nothing major that will significantly change their long-term outlook. By the end of the year, it will be clear that watching the last twenty years happen to you, while pursuing a strategy of being a slightly better version of mediocrity isn’t working.

3. JC Penney

takes over as the world’s slowest clearance sale.
When I left the executive ranks of Sears in 2003, it was clear to me that nothing was going to save the legendary retailer. A decade later, I began calling the company “the world’s slowest liquidation sale” as it embarked on a series of store closings, asset sales and strategic restarts in a desperate attempt to delay the inevitable. Now, with only a handful of stores left, Sears is, for all intents and purposes, dead and buried. It is therefore time to become aware of its former direct competitor, JC Penney. Like Sears, Penney’s found itself trapped in the boring middle, trying to sell a bit of everything to everyone, with an increasingly irrelevant offering and an untenable competitive position. Like Sears, Penney’s tried to keep its stores close and cut costs to achieve prosperity, while making incremental changes that failed to make a difference. Although their acquisition by Brookfield and Simon has bought them time, there is not enough time or money to make the sweeping changes they need.

4. The “prosperity without profit” of disruptive brands is coming under increasing scrutiny. If we were to listen to “DTC Twitter,” the entire retail world would be turned upside down by digital native brands. But facts are stubborn things. The overwhelming majority of these disruptive marks are tiny and will remain so. The few companies that generate substantial revenue usually struggle to lead the way to profitability. The work of Dan McCarthy and others is beginning to shed light on the differences between those with strong prospects of becoming sustainable brands and those who are, shall we say, “challenged”. With more high profile brands entering public markets (think Warby Parker, Rent the Runway and Allbirds), as well as the growing history of those that have been public for more than a handful of quarters (Stitch Fix, Peloton, Chewy et al), the harsh realities are becoming clearer. With the rising cost of digital acquisition and activation, the marginal economics of growth will get much more attention. While it will become clear that many of these marks are, in fact, real, it will also become clear that Casper was the canary in the coal mine for others.

5. Understanding “Buying” Vs. “Shopping” becomes more important. The main reason I was confident in pushing back against the “software is eating retail” narrative is that there is a big difference between “buying” (customer journeys driven by completing a relatively simple task and unemotional) and “buy” (those that are more experiential, complex, or fulfill an emotional need or desire). E-commerce (as well as some “essential” big-box retailers) dominate “purchase” journeys. And while digital touchpoints enable more and more shopping opportunities, physical stores remain vitally important. One of the main reasons for the collapse of the mundane environment is the inability to respond to this growing bifurcation of customer behavior. To cite just one quick example, if you haven’t defined a relevant position on the buy side, closing stores will only make you less convenient for consumers who will buy from a physical store, but have many choices. satisfactory closer to them (think Macy’s

vs Kohl’s, Target and the whole off-price sector). The most struggling retailers should heed the advice of famed retail strategist Yogi Berra: “When you get to the fork, take it.”

6. Amazon double-clicks on her physical dreams. I had a lot of hindsight in 2018 when I said that Amazon would probably move further into physical retail. But my belief was largely rooted in their success in “buying” and their negligible market share in “shopping”. I firmly believed that greater physical presence was key to unlocking spending in areas where they aren’t getting their fair share (groceries and fashion apparel to name two). With extensive testing of their 4-star, AmazonGo, and various pickup/return locations — and their soon-to-open (and somewhat oxymoronic) “Amazon Style” format — they now have plenty of irons in the test and learning fire. But 2022 will mostly be about what they choose to do next with Amazon Fresh.


7. The “great reconfiguration” is gaining momentum. For better or worse, the pandemic has spawned “the great acceleration”, “the great resignation” and “the great rewiring” – all valuable ideas that are long on the “what” and the “so what”, but not so much about “Now what.” Before the pandemic, it was clear that many retailers needed to transform. But many pursued the faster horse strategy rather than adopting a clean sheet approach that recognized that retail was becoming increasingly hybrid. As we have moved from a world of relative scarcity to a world of abundant supply, access, and information, historical assets often become useless anchors. As consumers can unbundle their choices and shop from anywhere with a smart device, historical notions of channels and formats are giving way to an awareness that brands are platforms. Indeed, some notable retailers are beginning to create new ways to go to market, using completely redesigned physical spaces and hybrid supply chains, and remixing their offering to get closer and become more relevant to customers. Increasingly, it will become clear that many brands will not win in the future by simply optimizing what they have. Instead, they need to blast away much of what made their past success and radically reconfigure their operating model.

8. Metavers, Schmetavers. Do you understand Metaverse or Web 3.0? Yeah, me neither. Will Second Life have a second life? Who knows? Will the brand of VR headset we will one day wear determine our appeal to a potential partner? We will see. As an ABT (A—Always. B—Be. T—Testing) fan, I absolutely believe that brands should seek to understand the potential of the metaverse and set up experiences. Will a retailer generate significant value this year from these offerings? I doubt.

9. Hyperbole remains the greatest thing there is! I’m sure you already know that I’m writing this on a computer I 3D printed wearing Google

glasses I bought using cryptocurrency during a livestream. Enough said.

10. Convenience Wars Jump the shark. As Seth Godin reminds us, “The problem with a race to the bottom is that you might win. Or worse, finish second. The ever-escalating battle for convenient delivery isn’t new, but the pandemic has pushed consumer interest to new levels. And because Amazon has built the local market infrastructure to offer same-day or next-day home delivery for a wide variety of products in a significant number of major markets, competition has either been left out, be forced to default to less than optimal (or decidedly uneconomical) tactics like using their stores as DTC warehouses for third-party delivery services. On top of that, venture capital money is now flowing into super-fast delivery services whose core competency may turn out to be the ability to incinerate cash. Something has to give.

Unfortunately, the persistence and unpredictability of the Omicron variant makes me a little nervous about the accuracy and timing of some of these predictions. But some things seem clear. Struggling retailers need to change much deeper and much faster than they realize. And to paraphrase Carlos Castaneda, the problem is that they think they have time.