Successful retailers today are able to look at the changing environment and see opportunities.

The retail industry is rethinking the shopping experience in 2022, redefining not only how we shop and sell, but the incredible advantages independent retailers have right now. The cutting-edge retail trends below are guiding each step of the way.

The boutique on your town’s main drag, the shoppable post that appears in your Instagram feed, and the marketing email sending you to an online store may all come from the same retailer. And that retailer may be fundamentally different than they were last year.

To help retailers identify and lean into those strengths and strategies, Square teamed up with Wakefield Research and surveyed 1,000 consumers and 500 retail owners and managers about the retail industry trends that capture where they’re headed in 2022. What we found was eye-opening — the who, what, where, and why behind our shopping experience is going through a metamorphosis. There is an opportunity for retailers to make a name for themselves and beat out competitors through omnichannel technology and automated tools.

We analyzed the survey results, insights from the Square retail team, and interviews with creative store owners leading the charge to identify the top retail trends for businesses to explore this year. All data cited below comes from the survey results. For a more in-depth look at these 2022 retail industry trends, download the full Future of Retail report.

The 8 biggest trends for the retail industry

#1. Selling online is non-negotiable — no matter what you sell

Online shopping is essential for consumers and table stakes for retailers. Today, shoppers make 37% of their monthly retail purchases online, and many retailers are meeting those needs in stride. Independent retailers can connect with customers locally, and they can also extend their reach by selling online in addition to maintaining their local presence.

As many retailers are changing their business models to find new revenue streams, going online can increase the odds of success. In fact, among retailers selling online, 51% of their revenue now comes from online sales.

Moving to the first new channel also underscores the importance of using digital tools to help retailers continue to innovate. “That is the tipping point where you really need to run the operations of your business digitally,” says David Rusenko, Head of eCommerce at Square.

Despite the mass move to eCommerce and, therefore, the importance of having an omnichannel strategy, 32% of retailers say not knowing their options keeps them from selling items through newer online or social channels. And 29% say delivering consistent shopping experiences across online and physical channels is a challenge.

Even though retailers are digitizing their operations, it’s not an all-or-nothing situation, which raises the importance of education around the omnichannel selling solutions available. “Consumers clearly value and use flexible omnichannel experiences like buying online and picking up or returning in store,” says Roshan Jhunja, GM for Square for Retail. Shopping habits are evolving, and an integrated solution that ties multiple channels together, streamlining front- and back-of-house operations, can help retailers find success.

“An omni-literate system will help you fulfill your omnichannel sales and keep your products moving while minimizing excess inventory sitting around,” says Jhunja.

#3. Automated technology is helping retailers get a handle on the labor shortage

Nearly one in three retailers are worried about being able to attract and retain staff in 2022. To combat the increased complexity caused by the labor shortage, 72% of retailers are using, or planning to use, automation to decrease their team’s time on hands-on work.

Streamlining efficiencies for tasks like tracking orders, managing customer loyalty programs, and communicating with customers are the top three areas where retailers say automated technology will help fill staffing gaps. Retailers should consider investing in automated software or upgrading what they currently use to meet the changing needs of the hiring landscape.

#4. With supply chain issues continuing, same-day delivery is giving retailers a clear advantage

Nearly two out of three shoppers prefer delivery over pickup when shopping online. However, only 38% of retailers are offering same-day delivery. While shipping delays and supply chain issues are more common now — and 48% of retailers expect to continue facing supply chain delays — local businesses have an opportunity to get products out faster than big eCommerce players by offering same-day delivery.

Local retailers are closer to customers and they can set up the necessary systems to get products to customers faster. “What often happens is that when you start to offer something like same-day delivery, it encourages larger basket sizes,” says Dave Rusenko, GM for Square eCommerce.

There are also multiple fulfillment options beyond delivery that will last well beyond the pandemic. Nearly one in five shoppers say a lack of buy online, pick up in store (BOPIS) options would make them avoid certain retailers, proving how crucial the added flexibility has become.

#5. Social commerce is one of the biggest digital trends in the retail industry — and it’s booming

From selling on Instagram to launching an online store, retailers are experimenting with multiple ways of meeting the evolving needs of customers. This new omnichannel landscape is thrilling, with 75% of retailers surveyed now selling on social media.

Whether it’s through a fully shoppable store or flash sales, social selling is made possible by eCommerce tools, helping retailers reach more customers at a time when people may be even more glued to their devices. And it’s working, with 43% of retailers who sell on social platforms saying half or more of their revenue comes from social media sales. Retailers are earning the most revenue from Facebook, Instagram, Twitter, and TikTok, respectively.

If you’re interested in trying out social selling, see how Square can help you quickly get started, using the products you already rely on.

#6. Interactive retail experiences are bridging the gap between the online and offline parts of a store

As customers get more comfortable buying products through social media, it also opens up a whole new way to interact through those platforms. Enter virtual experiences. Over one in three retailers are going to invest in livestream shopping in 2022, while 30% are also going to implement virtual reality (VR) shopping.

These investments can lead to richer experiences for customers and more informed purchase decisions. And they’re more accessible than you might think.

Livestreaming is when products are shared with customers over live video. It can be as simple as using an iPad to show customers what’s in-store through a virtual shopping appointment, or by using Instagram Stories to showcase the new stock that just arrived.

Virtual reality is another strategy retailers are using to help customers experience products before adding them to their carts. Online shoppers want a deeper understanding of products before adding to their cart, and VR tech can be an effective way to improve the overall try-before-you-buy experience.

#7. The borders between retail and other industries continue to blur

The pandemic not only sparked business pivots, but fast-tracked industry mashups that were already taking place. Mixed-use concepts like restaurants selling branded merchandise and retailers offering digital services are increasingly normal.

Over one out of four shoppers say they’ve purchased retail items from a salon or spa during the pandemic, while 44% have purchased services like meal and cocktail kits and online cooking classes from restaurants.

“We’re seeing that the defined, straight vertical lines of your retail business versus your restaurant versus your services business are all blurring,” says Rusenko. “You’re seeing restaurants selling groceries (which are a typical retail offering) or retail businesses selling services like online cooking classes or Zoom calls and so on.”

#8. Community investments from retailers may be here to stay

Communities breathe life into local businesses, and both customers and owners recognize that harmony.

Retailers are deepening their connections to the areas they call home through a variety of ways. Sixty-eight percent of retailers are planning on participating in more community initiatives in 2022, with around one in three saying they’re going to partner with local businesses, provide supplies for local events, and donate supplies to community organizations.

Retailers are tapping into the qualities that make them unique, reworking them, and using them to their advantage as consumer needs have flipped. The future of retail in 2022 lies in the power of local businesses.

To incorporate these retail industry trends into your business, consider digitizing your operations and then trying out new ways of selling. When you find what fits, you can give customers exactly what they need while giving you the room to try new things. And when you get to that space where you can pull the levers that work for your store, your future is wide open.

FAQs on the top retail trends

What are the biggest challenges facing retailers in 2022?

According to our Future of Retail report, supply chain delays continue to loom as a challenge for retailers, with 48% expecting to continue facing those delays in 2022. In terms of other retail challenges, 29% of retail owners and managers worry about remaining competitive against larger big-box stores and 34% are concerned about operating expenses.

What are the latest trends in retail marketing?

The pandemic has accelerated retailers’ investments in marketing, with 31% saying COVID-19 encouraged them to expand their marketing and advertising efforts. Another 21% of retailers say the pandemic encouraged them to invest in customer loyalty programs.

What is a retail trend analysis?

Trend analysis in the retail space involves looking at historical data across various time frames to track upward and downward trends and use those inputs to identify patterns. Typically this is done using POS reporting and analytics collected by a POS system. A data-driven trends analysis allows retailers to find opportunities to invest in and places to pull back, allowing them to make smarter business decisions.

Want more insights on how retail store owners are innovating in 2022? Get a deeper look into these popular trends in our 2022 edition of the Future of Retail report.