Global Retail Report 2021-2022:
Overview, Trends, Growth, Analysis

DataArt gathered statistics and insights on how retailers are dealing with warehousing, customer retention, delivery issues, returns, and much more

We talked to 1000+ retail executives about struggles they are facing now

What scenario do you rely on mostly?

1

Sharp Rapid Recovery

Minimal Influence on the business. Losses during couple of months only.

Economy rebound within 2–3 month.

21%
2

Slow Comeback

Large loss of presented value of future output.

6–12 month for recovery.

58%
3

Protracted Bad Influence

Ever-growing loss in future value.

Long-term recession.

11%
notes

Multiple factors will determine scenarios

  • virus development level
  • vaccine development and implementation time
  • containment and mitigation laws
  • development of policies
  • business and people adherence

General:

60–70%

predicted revenue impact of annual sales

25–45%

overall reduction to future buys for next season

55%

cancel on-order (yet-to-arrive) products

Closed Locations:

13%all location 3%around 25% of all locations 9%50% or more 11%will close some locations soon 64%all open

Decrease in sales in next quarter:

7%   10-20%
34%   20-40%
41%   40-60%
16%   60-80%
2%   80-100%

Decrease in procurement:

22%   0%
19%   25%
28%   50%
29%   75%
2%   100%

Already ordered products cancelation:

56%   no change
23%   25%
17%   50%
4%   100%

Top priorities 2021-2022

Increase\Go Online
Cut Operation Costs
Reduce Inventory
Digital Transformation
chart

What are the top-priority tasks nowadays?

  • Ensure data teams — and the whole organization — remain operational
  • Lead solutions to crisis-triggered challenges to come
  • Prepare for the next normal (and execute soon)

Due to the unexpected revenue losses, companies need to digitize business models

For companies that are not yet digital reinventors, lockdown became a huge hit. DataArt suggests three starting points for focusing digitization efforts:

  • Take a dual approach to business-model innovation
  • Be bold in experimenting with new technologies
  • Make decisive investments

How dramatic lockdown changed your company?

Current Business Model became viable 9%
Digitally transformed a core business model 11%
Transformed more than 50% of the business 40%
Changed business model completely 33%
Not applicable 7%

Consumer trends and channel shifts

1

During crisis

Regulations: Closure of non essential business (retail included), Stay-at-home measures, Distansing

Consumer shifts: Demand of fresh goods. High need for hygiene products. All online (load problems). E-commerce ecosystems

2

Coming out

Regulations: easing of tough measures. opening of most businesses

Consumer shifts: cost reduction. Personal social distancing. Online orders will stay the same

3

“New normal”

Regulations: Full opening. Preparing for next pandemia

Consumer shifts: Online is the king. Hygiene will be a priority. Neat choice

baskets

“Stick” through the prolonged recovery and the next normal: increased price sensitivity, higher digital engagement, rise in attention to wellness and hygiene, “nesting” at home, and a redefinition of brand purpose.

We also expect to see important channel shifts:

  • a smaller food-service sector,
  • retailer consolidation,
  • the rise of value retailers,
  • Amazon’s growth in grocery (a sector in which the e-commerce giant has historically had lower share).

Personalization and Omnichannel Engagement State after lockdown

E-commerce business: increased flat decreased
Site conversion rate 66% 8% 26%
Repeat customer rate 41% 33% 26%
Average order value 22% 31% 47%
Shopping cart abandonment rate 51% 12% 37%
Marketing costs per order 9% 22% 69%
Percentage of revenue spent on IT expenses 19% 67% 14%

An increasing number of challenges are slowing the adoption of tools and technologies that could further support this growth. Prioritization nowadays is the biggest problem.

Omnichannel fulfillment execution: agree somehow
agree
disagree
Our team share common OF success goals 58% 29% 13%
We have right people at the right place to execute the strategy 49% 31% 20%
We have right technology at the right place to execute the strategy 39% 24% 37%

Companies are struggling to consistently connect with their customers. But trying to focus on fulfillment and fast delivery.

What every Retail Leader Should Do

man and laptop

Make life-time-value your North Star:

  1. Balance short-term needs with long-term desires. What can you bring today to your clients and your company? Measure your level of sacrifice. How will this affect your company’s ‘tomorrow’ after quarantine?
  2. Reorient marketing priorities. A lot of businesses said goodbye to their marketing departments. But crisis is a great time to create a strong brand.
  3. Carefully consider discount strategies. Create your new ROI, understand your new PoS and trade promotions optimization.
  4. Rethink customer interactions. Adjust your customer-journey and behaviour analytics.
recovery

Create Recovery-Focused campaigns

  1. Focus on individuals rather than companies. Think of how your buyer person changed to act now and think about what will change in your BP after the crisis.
  2. On relationships rather than product value. A lot of companies give free products/subscriptions/services, because they understand that LTV is more important than cash (even in difficult times).
  3. Ground in empathy rather than traditional metrics. Netflix, Google, Walmart, Apple already did that, if you can! - do.
  4. Build a strong strategy for our ‘new world’. That will convert to customers as the market recovers.
high five

Regarding quick decisions, there are some tips:

  • Activate special offers
  • Redistribute media costs
  • Focus on digital channels
  • Strengthen your back office
  • Update and adapt messages in real time
  • Open new service channels
  • Cross-selling communication
  • Development of a strategy of individual communication with consumers

Time for change: How to recover after Сoronacrisis?

people

CEOs, CTOs and product specialists do everything possible to keep up with this situation and quickly meet the changing needs of consumers.

We are witnessing the formation of completely new behavior regarding intensive hygiene procedures, online shopping, virtual training, work at home etc. These processes will certainly affect the way consumers interact with brands and companies.

What can a company do under such conditions?

Your first priority is to help people feel comfortable in the new reality:

  • The provision of online training services, all kinds of online entertainment and online training.
  • Live broadcasts to showcase products and even online "test drives."
  • Increase the quality of online customer support.
  • Expansion of delivery and after-sales services.
  • Formation of content and messages focused on the general well-being of the consumer and reduction of stress levels in times of crisis.
reading

How can such changes affect the behavior of society in the future?

  • People will buy more and more online, the trend for online product demonstrations will grow.
  • Older people will improve online behavior skills.
  • Personal hygiene will be more thorough globally.
  • The number of those who cook at home and follow the rules of a healthy diet will increase.
  • Online education for a lot of businesses will become a familiar format.
Denis Baranov

Den is a Principal Consultant at DataArt. He has over ten years' experience in the IT industry, as a developer, technical architect, solution architect, and IT leader

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