In April 2022, retail sales in the US increased by 0.9% according to the US Department of Commerce. This growth was nudged due to increased spending by American consumers at food & beverages, electronics, and appliances stores.
The retail market in the US is considered to be extremely competitive and is home to some of the world's largest and most successful global retail brands. With the growth of eCommerce and continuous innovation in technology supporting the retail industry, the competition has risen several notches.
Retail businesses across sectors such as automobile, fashion, hospitality, food & beverages, and fitness are building their online presence to increase their market share amongst online shoppers.
Here's a look at the top US retail trends that are expected to define the sector for the next five years.
Having an online presence is non-negotiable for retail brands today, and the numbers explain why. In the first quarter of 2022, eCommerce in the US grew by 6.7%, according to the U.S. Department of Commerce.
Companies are investing in building their owned, earned, and paid digital footprints to stay competitive in the digital age.
According to US retail statistics, in 2022, more companies are investing in personalizing the consumer experience to bring convenience, relevance, and a superior user journey to their end users.
From a customized design to a personalized eCommerce experience, this investment is expected from businesses to have the edge over their competitors.
As consumers get more specific with their lifestyle needs, this trend will trigger the accelerated growth of community-led online marketplaces.
Some of the key segments that are likely to flourish in this journey are sustainable lifestyle products, creator marketplaces, and food bazaars.
Direct-to-consumer (DTC) retail has disrupted eCommerce over the last few years and DTC sales have more than tripled from $36.08B in 2016 to $128.33B in 2021. In 2022, 1 in every 7 sales are projected to come from DTC sales.
Authentic engagement with customers, unique products, and a rise in online shoppers are some of the key drivers of this acceleration.
The term 'social influencer' has grown in definition, scale, and diversity. From mommy bloggers and influencers over the age of 50 to tweens and pets, the definition of an influencer has expanded to become more inclusive.
Brands that can build scalable influencer engagement models will be able to leverage this social capital to grow their market share.
More and more eCommerce businesses will leverage web scraping to collect valuable data on trends, prices, products, unique offers, and other market information.
Companies that partner with web scraping software providers early on, as opposed to using free tools will be able to collect more relevant data that can help shape their business decisions.
One of the post-pandemic US retail brands trends was the rush to reimagine supply chains. Global supply chains are expected to experience further disruption due to market forces, natural calamities, and unprecedented events such as the pandemic of 2020.
More businesses will invest in strengthening their supply chains and building alternative pipelines to keep their businesses up and running.
Brands are focusing more closely on their messaging through powerful campaigns, online conversations, and video marketing to ensure that they stand out from the crowd. Video is a key priority for marketers, with overall spends continuing to increase.
Whether businesses offer a DTC product or an online retail experience, they will continue to reimagine loyalty programs to retain the consumer's interest.
Businesses will invest in curating an end-to-end consumer experience that offers deeper value to consumers, from branded credit cards to rewards.
US retailers with a large brick-and-mortar presence will be able to capitalize on the buy online and pick up in-store (BOPIS) model.
One key benefit here is the speed of access. One can make a purchase online and pick it up in the next few minutes at their local store. BOPIS is even beating some retailers on their same-day delivery model.
Gen Z and millennial shoppers are looking to shop with brands that are aligned with their values, including fairtrade, racial equality, consumer inclusivity, and sustainability.
Consumers are connecting with brands based on their own values and principles, and looking to use their spending power to drive the change.
Retailers are automating several processes to help address their labor shortage and cost concerns.
Technology is closing the gap—from customer service and communication to managing loyalty programs and tracking orders.
Subscription services are expected to have more takers, especially among women who are looking for quality products that inspire higher trust.
Amazon Prime was the highest subscribed service in the US, followed by the online pet retailer Chewy. Other categories include personal care, lingerie, and beauty services.
Due to security and safety concerns, more consumers will want to shop using contactless technology, ranging from credit cards to QR codes. Contactless payments, especially, witnessed a rise in usage post-pandemic.
Businesses that can mirror these consumer trends and quickly adapt to these technological advances will stay ahead of the competition.
Companies will leverage data to make superior decisions.
Early investments in software that enable data gathering, crunching, formatting, and dissemination will enable key decision-makers—sales team members to brand managers— to act in a timely manner.
Teams that embrace technology and leverage it to their benefit will drive quicker business outcomes.
More and more businesses are integrating SEO across their marketing strategies, which includes video campaigns, social media content, blogs, newsletters, websites, and other key digital assets.
Businesses that invest in strengthening their SEO capabilities will be able to build better online visibility for their brands and optimally leverage models such as pay-per-click.
Shipping costs and timelines will influence consumer decisions more closely. Consumers will prioritize the purchase of products accompanied by free shipping.
Further, online retailers that can provide same-day delivery will also have a definitive advantage over their competitors.
Categories such as beauty, food, and personal care products are making the shift towards organic products, with more emphasis on the quality and source of ingredients.
The US organic food market alone was valued at $59.28 B in 2020. Between 2022 and 2026, it is expected to grow at a CAGR (Compounded Annual Growth Rate) of 13.83% and is projected to have a market value of $125.65B by 2026.
Millions of retailers are partnering with online and offline communities to engage and reach newer demographics. Some brands are also cultivating their own communities based on consumer interests.
Building trust is a major focus of these collaborations, which drive authentic, high-quality engagement and clearly position the brand to potential consumers.
Online retail platforms will grow their retail media publishing arms to drive revenues and offer more value to partner brands.
The retail media market is expected to grow by 25% per year to $100B over the next five years. By 2026, retail media is expected to account for over 25% of total digital media spends.
While technology and innovation are helping retail businesses find solutions to scalable problems, the ability of these companies to understand and respond to consumer needs with speed and empathy will help them sustain and expand their market share.
Communication, authenticity, and high trust are some of the new-age values businesses will need to imbibe to stay relevant.
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