Ecommerce Predictions for 2022

Last year was a challenging one for retail and ecommerce brands. Many small businesses struggled to keep their doors open as wave after wave of COVID-19 continued. And almost every company was forced to make changes to its business model to keep customers and employees safe. 

During peak season, retailers were also met with employee shortages and supply chain disruption. This meant fewer products on the shelves, slower delivery, and more backorders — and, naturally, lots of frustrated customers.  

Unfortunately, these challenges didn’t vanish when the clock struck midnight on New Year’s Eve. Supply chain, order fulfillment, product return, and customer experience issues will likely continue in 2022. And we will probably see new challenges emerge as the year progresses. 

That being said, necessity is the mother of invention. Here are 4 ways we expect ecommerce to evolve in 2022 to meet the challenges of this year’s peak season.  

Better Sourcing and Inventory Management 

While consumers are rushing to their local stores and flooding their favorite ecommerce sites with orders, businesses are struggling to replenish their inventory. Large shipping containers are continuing to pile up in the ports, and there simply aren’t enough carriers to deliver goods from warehouses to retail locations. Add in heavy winter storms that delay deliveries — and you get month-long backorders and seemingly endless out-of-stock scenarios for customers. 

Fortunately, there are some changes that businesses will make to deal with the ongoing supply chain volatility in 2022. As Radial’s COO, Laura Ritchey explains:  

“Ecommerce strategy will evolve in two ways in 2022. First, brands and retailers will correct weaknesses identified due to supply chain disruption, such as on-hand inventory levels being too low and single-threaded solutions for sourcing or movement.” 

“Second, organizations will leverage multiple locations for fulfilling orders. With rising transportation costs, brands and retailers will continue to shift inventory closer to their customers, whether that’s in stores or through other distribution centers. This shift reduces time from click to delivery and mitigates the costs. Opening additional locations to hold inventory and putting an order management system in place to direct orders to those inventory locations will be a major priority for peak season in 2022.” 

Real-Time Inventory Forecasting 

Product demand has always been difficult to forecast, but this year, retailers and ecommerce businesses have even less data to work with than normal. As a result, companies will need to take a new approach to inventory planning, if they want to have the right amount of inventory on hand throughout the year.  

“Given that there have been two years of supply chain disruption, retailers face a challenging planning environment,” explains Laura. “2020 and 2021 may not provide accurate benchmarks for future performance, and 2019 is much too dated to support plans.” 

“The best approach will be to create the most accurate estimates possible of demand and required inventory levels, and then develop contingency plans to adjust as plans actualize. Things like vendor-managed inventory, inventory in distribution centers, store inventory that can be available to any customer, and additional safety stock for fast movers should help mitigate risk.” 

Minimized Product Returns 

Peak season isn’t just chaotic because customers are buying lots of products. Product returns make the weeks following wild as well. But the way shipping is going right now, 2022 may look a little different than in past years. As Laura explains:  

“It’s unclear whether shipping delays will increase return rates versus prior years. However, in 2020, there were certainly delays on shipments to customers, and return rates held relatively steady. The more likely outcome is potential lost sales, particularly if the delays persist.” 

Whether shipping delays cause lost sales or long wait times for product returns, businesses can’t afford to be hampered by it. Luckily, there are some solutions out there that companies, large and small, can take advantage of.   

“Retailers need to make accurate delivery promises based on a clear view of product availability and optimize their fulfillment solutions, including last-mile, by creating a healthy ecosystem where each part of the process supports the others, creating greater visibility and transparency for your teams and customers,” explains Laura. “Predictive analytics can also be used to understand patterns in products being returned, which may help identify product issues and reduce future returns.” 

True Omnichannel Experience 

Customers aren’t willing to visit multiple store locations or switch between Instagram and your ecommerce store to find an available product anymore. They expect to be able to view and purchase anything and everything you sell, from their preferred channel. And more importantly, they want the flexibility to fulfill their order in the fastest and most convenient way for them — be that delivery, BOPIS, BOPAC, or a traditional in-store purchase.  

“Customers are craving a convenient and hassle-free shopping experience from click to deliver. The need for a friction-free omnichannel experience is now a necessity to provide a consistent brand experience with flexible options for customers,” says Laura.  

One way retailers can meet this expectation is by designing and implementing a true omnichannel experience. In other words, connecting all the pieces of the customer experience — from the purchase to the final delivery – into a single orchestrated process.  

“Disparate systems often drive siloed operations between different channels resulting in disjointed customer experiences,” explains Laura. “In order to provide a seamless experience for the customer, it’s important to provide convenience, choice, and speed with the backbone of product availability in a single, trusted view. This helps to streamline store operations and ecommerce fulfillment and supports evolving business demands with real-time visibility and control over inventory to fulfill every customer order on time and profitably.”  

2022 is bound to be an interesting one, as businesses continue to grapple with problems that emerged last year and new challenges that are on the horizon. We expect to see drastic improvement in areas like inventory management, forecasting, fulfillment, and the overall customer experience. But one thing we can all be sure of is this: retailers and ecommerce businesses will find creative solutions as they adapt to this year’s normal.