The retail industry is one of the fastest growing sectors in the world, and for good reason. At a time when digitisation has become an essential strategic shift for many industries, retail has a vested interest in seizing the subtleties of this new consumer model.
In this article, discover the 2022 figures for the retail industry to better understand its challenges.
I. Retail industry: what do we mean?
The retail sector includes all companies and organisations whose main activity is to sell finished products directly to customers.
The types of retailers are numerous and very diverse.
Distributors of food products
Distributors of food for animals
Distributors of confectionery
The products can be marketed both in physical points of sale (such as in supermarket) and from e-commerce sales platforms (such as Amazon Marketplace).
These two distribution channels need to be managed alongside one another to ensure success.
Let’s discover the key figures for the retail industry in 2022.
II. Key figures for the retail industry in 2022
The logistics supply chain is the second biggest issue when it comes to the digitisation of industries
However, there are still many small industries whose resources and skills limit automation and digitisation of their supply chain.
Even where it represents significant cost, investing in digital transformation is a strategic action that will pay off in the long term.
Some practices have already been well established by forward thinking companies, who lead the way in terms of digital innovation and automation processes.
Here are some examples:
forecasting solutions: once integrated into established systems, these solutions allow manufacturers to have more perspective on the market, in order to anticipate the various fluctuations and better manage production and inventory.
production line automation: automated production lines allow a company to increase productivity and profitability, whilst allowing elimination of arduous and low added value tasks.
robotics: some state-of-the-art supply chains now have robots to perform tasks that previously required human intervention, eg (goods loading, product recovery, etc.)
The Xiaomi case study - a 100% automated factory:
The My Smart Factory, designed in 2019, has revolutionised the manufacturing industry by offering a fully automated supply chain.
Thanks to the work of mobile robots, automation processes and intelligent decision-making systems, all supply chain operations are automated.
Whilst it was difficult to envisage this type of innovation a few years ago, cutting-edge technology has made it possible to create a factory with the production capacity of more than one million smartphones per year, without the intervention of operators. It is the first 100% automated factory in the world.
To find out more, you can read our article here: Automation solutions for logistics warehouses
By the end of 2022, 70% of retailers will have started working on implementing machine learning technologies
What is machine learning?
It is a subset of artificial intelligence that allows computers to learn from data to perform tasks without being explicitly programmed.
Machine learning technologies make it possible, when they are based on “clean” and correctly parameterised data, to make predictions based on past experiences.
This is a real competitive advantage that can allow retail manufacturers to anticipate the needs of their consumers, and meet their expectations in the best possible way.
Machine learning can be used to predict consumer behavior, for example, by identifying which products are likely to be purchased seasonally, by occasion, in what volumes, and the expected spend during their next visit to an e-commerce site.
89% of customers want a unified experience across marketing channels
Digitisation has become a major trend in the retail industry and has disrupted businesses.
This is evidenced by the fact that it is no longer just about selling products or services, but also about optimising the process. Therefore businesses need to ensure that they put customer and consumer experience at the very heart of their approach.
The number of distribution channels offered by companies means that consumers benefit from a better overall experience.
Retail manufacturers must therefore ensure that all of their marketing channels offer a similar and qualitative experience, reinforcing the brand image they wish to embody in the minds, and hearts, of their consumers.
40% of retailers believe that the Covid-19 crisis led them to place more orders on the internet
Consumers are no longer the only ones placing their orders online.
In fact, many manufacturers have had to change their habits during the recent crisis in order to source raw materials.
Although relationships with physical suppliers are once again possible, many industry professionals are now choosing to continue their exchanges online.
These new practices have strengthened and reinforced the development of connected applications. They have also dematerialised platforms to allow for the continuation of these simplified exchanges and processes.
The average conversion rate of merchant sites across all industries increased by 30% in 2022
Each year, e-commerce figures continue to demonstrate the power of digital sales channels in modern society.
Aided by the Covid crisis, online purchases have multiplied across all consumer categories.
Retailers with simple points of sale are now less attractive than competitors with omnichannel strategies.
58% of consumers plan to change their behaviours to benefit the environment in 2022
It is no secret amongst manufacturers that the culture of instantly available products has revolutionised consumption habits.
At a time where it is now commonplace for individuals to be able to satisfy their needs in real time; mainly thanks to the flexibility of e-commerce and omnichannel strategies deployed by retailers, consumers are questioning whether or not it is a good thing, especially for the environment.
In 2022, environmental issues lie at the heart of consumer’s concerns.
58% of consumers plan to change their behaviour in favour of the environment, which requires the majority to review their way of consuming, as well as integrating an ethical dimension to their consumption habits.
Companies need to respond to this commitment and move to eco-responsible production and distribution practices.
Favouring renewable, recyclable and second-hand raw materials, reducing their imports and exports, controlling and reducing their carbon footprint… there are many ways that manufacturers can take action in order to make their supply chain part of a more responsible approach.
86% of e-merchants plan to use eco-responsible or recyclable packaging in 2022
This is a very encouraging figure, particularly for consumers who want to change their purchasing habits.
In addition, many manufacturers have developed, or moved to using, recyclable and returnable packaging systems.
More than just a way to save on raw materials and reduce greenhouse gas emissions, this packaging allows companies to make their own supply chains more profitable.
Returnable packaging is readily available for rental, depending on the time and delivery requirements of manufacturers.
In addition, returnable packaging is recovered at the end of the chain by suppliers, before being repaired if necessary, and then reused.
Pallet pooling allows manufacturers to reduce their palletisation expenses and save unnecessary storage, transport and maintenance costs.
In addition, it is a 100% outsourced service that saves time and makes the supply chain more flexible and efficient.
LPR - La Palette Rouge are the European specialists in pallet pooling and can support your company in transforming its supply chain.
The retail industry has been irrevocably disrupted by digitisation.
As a result, the necessary changes require companies to review their processes to offer the best possible experience to their customers.
Customers have ever higher expectations (that are sometimes difficult to meet) in the face of fierce competition, especially within the wider consumer landscape where it is now the norm to get goods delivered anywhere at any time.
This society of immediacy and interconnectivity is a challenge in its own right for industries, many of whom need to embrace digitisation and automation of their production methods.
If you would like to discuss your logistics issues with our business experts, you can contact them here. You can also access our other blog articles to learn more about the supply chain and pallet pooling.