Lightspeed’s Report on the State of Retail, and What it Means for your Business
Two years of rapid change, disruption, and acceleration have brought the retail industry to a new level. new era.Independent retailers face changing health regulations and supply chain woes. They also have to deal with a constantly evolving workforce. What are the next steps for business owners?
Small Biz Sense was always keen to better understand the retail industry. To better understand this tumultuous time, we surveyed over 7,200 global retail owners, managers, operators and customers to see how they’re responding to a shifting retail landscape.
In this blog, we’ll dive into the details of the report and some of our main takeaways, like: The importance of omnichannel.
As Small Biz Sense CEO JP Chauvet says, omnichannel “is do or die.” Merchants offering retail both online and in-store celebrated the largest year-over-year revenue growth of all global retailers surveyed. Ecommerce continues to be a strong option for small businesses. However, in-store retail is still thriving. This has accelerated the need for omnichannel options for all sizes of business.
The number of shoppers who shop at the same retailers has increased by two-fold, underscoring how important loyalty programs are to build customer relationships. The technology is now more essential than ever to create exceptional customer experiences and outperform competitors.
But with all this change, one thing remains absolutely clear: wherever challenges exist, opportunities aren’t far behind.
In 2022, there are many ways that your company can be run smarter
Our guide will show you how to scale up your business for 2022 and beyond.
With omnichannel being the leader in retail sales, growth is high.
Canada and the United States Nearly 50% of retailers who were surveyed said that their revenue was higher in 2021 compared to 2020.According to 12% US sales figures and 6% Canadian, their revenues were Significantly higher. Let’s break that down even further:
- Omnichannel merchants perform better than overall: When it comes to year-over-year growth in omnichannel sales (merchants with an online and brick and mortar presence), 61% of omni retailers in the US, 58% in the UK, and 56% in Canada reported higher year-over-year sales growth with a whopping 21% of omnichannel merchants in the US reporting “significantly higher” revenue —far more than the overall average.
- The US has seen this online growth. And in-store: 61% of omnichannel merchants, 47% of eCommerce merchants, and 41% of Brick & Mortar merchants saw higher year-over year sales growth.
- eCommerce revenue surgedFor nearly half the online retailers (47%) in the US and the Netherlands, (45%),
- Brick & Mortar also thrived in North AmericaCanadian stores (42%) and US stores (41%) saw increases in both online and in-store sales.
Despite retailers’ heavy investment in ecommerce throughout 2021, it appears customers still appreciate in-store shopping for retail purchases; and a combined approach that values in-store and ecommerce sales pays off more than one method alone.
Averaging of 39% of consumer survey respondents reported they’ll shop mostly in-store over the next 6 months,This compares to 23% in ecommerce. It indicates that the target is being met to recover to pre-pandemic levels.Customers account for 50%In-store shopping in 2019
However, while consumers may be planning to shop more in-store, they’re planning to shop less overall. What are you talking about? 33% of respondents to a consumer survey said that they intend to. Shop less in 2022Only versus 10% for those who are planning to spend more.
Expert Tip: When slow sales are occurring, it is worth investing in more hardware and omnichannel inventory to decrease wait times.
Rising costs of running a business
Small business owners understand this, Problems with the supply chainAnd Labor shortagesRetail industry has been plagued by labor shortages for almost two years. Global labor shortages remain the biggest challenge to the retail sector in 2022. 20% of the respondents reported that staff retention is their most difficult challenge.. Additionally, 32% reported reporting that their company was operating with less employees than it required. As a result, they have been able to overcome their retention issues.
For retail businesses looking to expand, offering attractive salaries can help. Also, focusing on employee retention and engagement will ensure that staff are retained and improve customer service. It is simple: treating employees well makes a difference.
Expert Tip point-of-sale terminals in-store, scheduled pickupAndImproved Inventory Management SystemsIt can make it easy for employees to do their jobs and provide additional value to customers both in person and online.
The pandemic was fueled by retail technology.
Global merchants account for 68% in Small Biz Sense’s survey said technology adoption had a positive impact on their business over the last 2 years.
Three strategies stood out as the most impactful when asked by the group:Ecommerce, inventory technology, loyalty programs. If you’re considering up-leveling your technology stack in 2022, any of these upgrades are a great place to start.
- Over half of respondents to the merchant survey plan to do so.Investing in technology that will help them to sell online.
- 64% of retail stores planning to invest stated they intend to Invest in more inventory and better supply chain processes to increase their eCommerce store’s potential customers.
- Buy Now Pay Later technology has had an overwhelmingly positive impact on merchants’ businesses:
- It provides competitive advantage to 68% of respondents
- 64% said it made them more sales
Expert Tip: Ecommerce investment should pay dividends. Retailers must have the ability to keep optimal stock levels, regardless of shipping delays.
Shoppers are more invested in shopping locally—but also more impatient
It is a stunning According to 62% of respondents, local merchants are now more inclined than ever to shop locally after the Pandemic. The majority of respondents said that shoppers even spend. MoreYou can shop online or in person at any of their shops.
Is it more important for shoppers to shop local/independent?
These are aligned to the Respondents to a consumer survey felt that supporting independent local businesses was important or very important for 63%. With 37% of respondents planning to shop more locally in 2022,
But what does “shop local” really mean to consumers? Nearly 50% of US consumers (51%) and 48% in the UK (48%), considered local shopping to be the best option. Shopping primarily from independentCompaniesHowever, Not necessarily with local businesses. Shopping locally is defined differently in different countries. Some place more importance on the physical location of businesses. Let’s dive into the numbers by region:
- Consumers in the United StatesPeople prefer to shop from local businesses (51%) and with businesses based within their own city (39%), over the wider area (26%).
- Canada, Consumers rank independent shops (38%), local businesses (37%) or businesses within their community (36%) in roughly the same order. Canadians place greater value on shopping in the country (21%), than they do anywhere else.
- The United KingdomShopping with independent business (48%) can be twice as valuable as buying from a local store (26%).
- Consumers in France They consider shopping for a local business to be the most important (40%), and businesses in their own city second (35%).
- The following information is for consumers who live in the NetherlandsBusinesses in the region rank first (34%) followed by those in their locality (32%). Independent local businesses rank third at 27%.
- German Customers value the presence of businesses in their area more than others (55%), with independent business valued at 24%.
For independent business owners looking to grow their online presence, this is a great opportunity.
Unfortunately, every shift in shoppers’ behavior is not always positive. A shocking majority (60%) of the respondents also stated that consumers have lost patience since 2020.
Expert tip: To capitalize on the local shopping momentum for your business, use your regions’ definition to your advantage by tailoring marketing and ad spend to your most valuable audiences. Operators and business owners are struggling to find workers. Rude customers are the result. a key component of service worker burnout, retailers will need to be sure they’re prioritizing employee satisfaction and supporting their employees if they want to take advantage of increased spending.
We’re here to help, in 2022 and beyond
Powering the businesses that are the backbone of the global economy, Small Biz Sense’s one-stop commerce platform helps merchants innovate to simplify, scale and provide exceptional customer experiences. The cloud solution unifies physical and online operations. It allows for multichannel sales, international payments, expanding to new areas, and financing.
Whether you’re looking for a solution to expand to new brick and mortar locations, dive into ecommerce, up your inventory management or beyond, Small Biz Sense is here to help you meet your future head on. Click here to speak with an expert on how Small Biz Sense can help your business grow beyond 2022.
The complete retail state report is available here.