- In 2022, worldwide retail ecommerce sales will exceed $5 trillion for the first time, accounting for more than a fifth of overall retail sales.
- Growth in ecommerce retail over the next few years will slow down due to in-store retail’s rapid bounceback.
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The pandemic has shaken up consumer buying behavior for good. Yet, after two years of unpredictable growth patterns and volatile markets, 2022 is expected to be a turning point: Worldwide retail and ecommerce spending will stabilize, shopping habits will solidify, and pressure for companies to adapt will be paramount.
Whether it’s mitigating risk by diversifying revenue streams with retail media networks, introducing fulfillment options that are flexible and convenient for consumers, or producing unique and ever-changing experiences in stores to draw the customer back, retailers that stay lean and continue to push the boundaries on innovation will win.
Pulling insights from our Global Ecommerce Forecast 2022, Insider Intelligence takes a look at the trends influencing the retail and ecommerce industry.
Retail forecast for 2022
In 2022, worldwide retail sales are poised to grow 5% year-over-year (YoY) to exceed $27.33 trillion. Although ecommerce spending growth is expected to slow considerably—due, in part, to the rebound of brick-and-mortars—the channel will still account for more than 20% of total global retail. The bounce back of in-store retail over the last year is a testament to its resiliency, signaling that ecommerce’s rise to dominance will take longer than expected.
Consumers responded quickly upon their return back to shops, accelerating the in-store market’s recovery by two full years. In fact, in-store sales rebounded by 8.2% last year, to $21.09 trillion, more than was spent in 2019. This pattern—with sales dropping in 2020, then spiking in 2021—was nearly universal around the world, but it’s the Middle East and Africa and Southeast Asia that will see high sustained growth this year.
This year will mark a milestone for worldwide retail ecommerce sales, which will surpass $5 trillion for the first time. Solid low double-digit growth rates will endure through to 2025, amounting to over half a trillion new ecommerce dollars every year.
Retail industry technology
Shoppers will return to stores in 2022 with expectations that retailers will offer tools that connect digital and physical shopping experiences, like curbside click and collect or QR code payment options. A Raydiant survey found that an enjoyable shopping experience is the reason why nearly 35% of US respondents prefer shopping at in-person locations. That’s enough to entice grocers and outlets to outfit their stores with tech-driven solutions that offer more streamlined, frictionless services such as self-checkout.
Augmented reality (AR) is also expected to take an important role in bridging the physical and digital shopping experiences, drawing shoppers in-store with interactive activations and engaging them at home with virtual product testing. Themed activities, such as the Harry Potter New York flagship store in New York City that features interactivity, like flying on your broom above Hogwarts Castle, offer something that online experiences cannot. Retailers that combine fun with a sense of urgency, like limited time merchandise, will ensure consumers return.
Demand for same-day retail delivery
Amid the ecommerce boom, bolstered by the pandemic, consumers heightened their expectations on how quickly they receive their online orders. Many relied on Amazon, the gold standard of shipping, to deliver everything from essential groceries to hobby supplies in lockdown, and competing retailers are catching up.
This year, retailers are expected to grow their partnerships with delivery platforms that offer same-day fulfillment, to help meet the demands of customers who have grown accustomed to last-minute or urgent purchases. Brands such as Best Buy, Staples, and Dick’s Sporting Goods have already teamed up with Instacart to keep up in response. Other large retailers will follow the likes of Walmart, which recently launched its own courier service to bring same-day delivery in-house.
The next wave of next-day delivery options will include beauty, office supplies, home goods, and other second-tier essential goods—items that are among the fastest-growing categories in US ecommerce.
The boom of social commerce with TikTok
Algorithms like TikTok’s For You feed and Instagram’s Shopping tab are replacing targeted ads and organic content from brands and influencers as a means of discovery on social media. The For You page and trending videos were among the top places TikTok users worldwide discovered products in the food and beverage, luxury, and automotive categories, per an August 2021 Warc survey.
2022 sees no signs of slowing the viral ecommerce trend, especially as marketers look to capitalize on it. A study by The Harris Poll and Sprout Social found that 73% of businesses are currently selling via social media, with that number expected to rise to 79% in the next three years.
Why sustainability is trending in retail
A growing population of younger shoppers are wielding influence on consumer spending—a population that prioritizes brands that embed social and environmental responsibility to their everyday business model. Millennials now represent $600 billion in spending power, while Gen Z chips in another $140 billion. That’s why sustainability, no longer merely a buzzword, will be critical to how retailers respond to changing consumer expectations about product sourcing, packaging, and delivery.
Sustainable direct-to-consumer (D2C) brands are already on the right track, implementing sustainable retail practices: rolling out more energy-efficient small footprint stores, diversifying their supply chain partners to include more local sourcing, and introducing rental and subscription models that drive recurring revenues.
D2C heavyweights such as Allbirds and Warby Parker, both recently publicly listed companies, will face the challenge of increasing profits while remaining true to their core. Those efforts will pay off, however: Nearly 60% of US adults purchased from a D2C brand at least once in 2021, while 65% said they plan to shop with a D2C brand in 2022, per a report by Diffusion.