DEC 2021

Insider Intelligence

3 Retail &
Ecommerce Trends
to Watch in 2022

Introduction
The pandemic and changing consumer preferences
have fundamentally altered the payments & commerce
ecosystem, and retailers and brands will need to adapt
to retain fickle consumers. Not to mention, consumers
are likely to spend more than ever in 2022. We project
that total US retail sales will increase 2.5% year over
year in 2022 to $6.624 trillion, with ecommerce sales
growing 16.1%. The companies that continue to digitize
the shopping journey, while promoting sustainability
and reducing friction, will win in 2022.
As the new year is starting, we’ve compiled three
trends in the retail & commerce industry to keep your
eye on.
Sustainability is a primary brand consideration for
millennial and Gen Z consumers. Younger generations
not only have enormous influence on brand perceptions, but
increasingly wield the power of the wallet. Millennials now
represent $600 billion in spending power, while Gen Z chips
in another $140 billion. With younger generations’ sky-high
expectations of brands to exhibit social and environmental
responsibility, those perceived as being behind-the-times
will quickly fall out of favor with consumers.
Rental and resale fashion are a win-win-win for
consumers, retailers, and the environment. Fast fashion
is out, sustainable fashion is in. It’s too soon to announce
“the end of ownership,” but borrow-don’t-own propositions
like Rent the Runway have cultivated strong customer bases
and will gain momentum in 2022. Resale marketplaces
TheRealReal, Poshmark, and Depop are also on the ascent,
while established retailers like Lululemon, Ikea, and Urban
Outfitters recently launched their own resale initiatives.

Sustainable direct-to-consumer (D2C) brands are

moving center stage. Digitally native D2C brands Warby
Parker and Allbirds, which have built their brands on
Trend 1: A Sustainability Strategy sustainability and corporate responsibility, are now under
Will Be a Need-to-Have for a bigger spotlight as recently publicly listed companies.
As they and other D2C brands grow through portfolio
Retailers extensions, channel expansions, and new revenue streams,
their challenge will be to increase profits while remaining
Sustainability, no longer merely a buzzword, will be true to their core.
critical to how brands and retailers respond to changing
Retailers are adopting more sustainable packaging
consumer expectations about product sourcing,
practices. Amazon’s introduction of “Amazon Day” to
packaging, and delivery. consolidate orders into a single weekly delivery and recent
investments in electric vehicle manufacturers and clean
Importance of Sustainability When US Internet tech companies suggests the company is evolving to be
Users Shop for Beauty, Clothes, and Travel more environmentally conscious. Walmart aims to achieve
Experiences, by Generation, March 2021 100% recyclable, reusable, or compostable packaging
% of respondents in each group in its private brands by 2025, and is also pushing on
Gen Z 1.4%
2.8% suppliers to significantly reduce carbon emissions as part of
38.4% 32.7% 20.9% 3.8% Project Gigaton.
0.8%
Millennials 0.8% Ultimately, sustainability is all about gain, not pain.
49.6% 32.8% 13.0% 3.1% Adjustments are difficult, but retailers that adopt sustainable
Gen X 4.8%
1.2% supply chain, packaging, and revenue models will be
36.7% 29.8% 22.2% 5.2% positioned for growth—especially as younger shoppers
Baby boomers 4.2%
1.5% wield more influence on consumer spending.
13.4% 39.2% 34.4% 7.4%

Very important Unimportant

Important Very unimportant
Neither important nor unimportant Don't know
Note: numbers may not add up to 100% due to rounding
Source: Composed and MaCher, "Sustainability & Consumerism: U.S. Consumer Behaviors
and Preferences," May 6, 2021
266512 eMarketer | InsiderIntelligence.com

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Predictions Trend 2: Gen Z and Payments
■ The rise of fashion resale will help power apparel
Titans Move in on BNPL—but So
category growth. We expect US fashion resale Do Watchdogs
ecommerce to rise 46.6% to $15.50 billion in 2022,
helping drive apparel and accessories to eclipse Growth will come from Gen Z’s interest in BNPL
$200 billion in ecommerce sales for the first time. and incumbents’ push to outspend and outinnovate
competitors. But regulatory scrutiny means providers
■ D2C brands will convert sustainable retail
practices into sustainable business models. D2C could end up paying down the road.
brands will build for long-term growth using modern,
sustainable retail practices. They’ll roll out more energy- US Buy Now, Pay Later (BNPL) User Penetration,
efficient small footprint stores, diversify their supply by Generation, 2018-2025
chain partners to include more local sourcing, and % of digital buyers in each group
introduce rental and subscription models that drive 47.3% 47.4%
46.5%
recurring revenues. 44.1%

36.8%
■ Rent The Runway will roar back amid a resurgence 40.6% 40.6%
39.5%
of in-person events. As a post-pandemic reality comes 37.2%
into clearer view, social engagements like weddings and 30.3% 30.9%
21.6% 28.7%
industry conferences will see a huge rebound in 2022 26.3%
23.1%
as they make up for lost time. The uptick in events will 18.0%
10.9%
translate to huge demand for bespoke fashionable 17.2%
14.8%
9.2% 13.5%
attire, generating momentum for luxury rental platforms 9.7%
12.0%
1.7% 4.5% 9.4%
like Rent the Runway. 1.4% 6.2%
0.6% 2.9%
0.1% 1.0%
■ Nuuly’s entry into the resale market will convince 2018 2019 2020 2021 2022 2023 2024 2025
more established brands to chase recurring
Gen Z Millennials Gen X Baby boomers
revenues. Nuuly, the rental and resale platform
Note: internet users who have accessed a BNPL account digitally and have made a payment
launched by Urban Outfitters, has forged a path for toward a purchase at least once in the past year; includes purchases of goods and services;
Gen Z are individuals born between 1997 and 2012; millennials are individuals born between
other fashion retailers to try their hand at the circular 1981 and 1996; Gen X are individuals born between 1965 and 1980; baby boomers are
individuals born between 1946 and 1964
economy—and the recurring revenue models that Source: eMarketer, May 2021
come along with it. Expect similar efforts to launch 267143 eMarketer | InsiderIntelligence.com

in 2022, particularly from brands appealing to Gen Z

and millennials. The BNPL wave will keep growing: Nearly one-third
of US shoppers will use BNPL as a payment option in
the coming year, per our forecast. Gen Z digital buyers
are leading the charge, with 44.1% expected to use the
technology in 2022. However, more than a third of millennial
digital buyers and nearly a quarter of Gen Xers will also
use BNPL credit options. While BNPL currently makes
up around 1% of US retail ecommerce dollars—per our
calculation based on BNPL estimates from consultancy
Oliver Wyman and our ecommerce forecast—fast growth
means merchants are noticing an opportunity to grab sales.
Incumbents, meanwhile, see the fintech-dominated space
as a threat to core offerings, such as credit cards; Chase will
spend “whatever [it has] to spend” to counter this threat,
according to CEO Jamie Dimon.

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Many of the largest banks are already doubling down
on their BNPL offerings: Look for more to follow their
lead in 2022. Entrants will offer new features to help
capture growth. Capital One’s forthcoming launch could set
off the tide. Application programming interface- (API-) and
open banking-based services from major networks like Visa
and Mastercard may also open the floodgates. Their simple
implementation across wide networks helps increase BNPL
acceptance. Meanwhile, neobanks, such as Upgrade and
Revolut, are blending BNPL with digital money management
tools, moving the needle on innovation.
Higher risk attracts scrutiny and threatens to slow
growth. BNPL may attract those with poor credit as well as
consumer-protection watchdogs. In what may be an attempt
to preempt regulation, industry leaders have suggested a set
of standards, including clearer penalties and data-sharing
that limits double dipping. Klarna’s UK adoption of more
transparent marketing, a new “pay now” option—which also
just launched in the US—and stronger credit checks, could
be a sign of what’s to come.
Trend 3: QR Codes Expand Their
Reach Beyond the Pandemic
The pandemic and consumer health concerns made QR
codes ubiquitous, but retailers have incentives to rely on
them even more in 2022.
QR codes are here to stay—and poised to gain even
more ground. Their ease of use and near-universal
readability will continue to attract users. Fear of COVID-19
and the rise of takeout culture rejuvenated QR codes, and
although user growth will slow, we still expect smartphone
barcode users to number 99.2 million by 2024—an increase
of 28.0 million from 2019. Moreover, existing users seem
willing to scan them more often: 75% of respondents would
be willing to use more QR codes in the future, according to a
June 2021 YouGov survey. With most smartphone cameras
capable of reading QR codes, the potential user base still
has room to grow.

How Willing Are US Adults to Use More QR Codes

in the Future?
Prediction % of respondents, by age, June 2021
BNPL’s lending and disclosure practices will come 18-29 3%
55% 28% 3% 11%
under scrutiny from the Consumer Financial Protection
30-44 1%
Bureau (CFPB). The bureau has already warned consumers
50% 33% 5% 11%
of the risks of using BNPL, and under the leadership of
45-64
Rohit Chopra, a staunch consumer advocate, the bureau 34% 35% 13% 12% 5%
is expected to take an aggressive stance to ensure 65+
that BNPL solutions comply with existing consumer 27% 37% 13% 13% 10%
protection regulations. Total
42% 33% 9% 12% 4%

Very willing Don't know Not willing at all

Somewhat willing Not very willing

Note: among respondents who know what QR codes are

Source: YouGov as cited in company blog, June 28, 2021
268405 InsiderIntelligence.com

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Retailers and restaurants will use QR codes to bolster
fi st-party data collection while lowering costs. QR
codes offer a great customer experience because they
let users go to a website to get additional information,
download an app, log into a loyalty program, or buy
something. For restaurants and retailers, this will mean faster
checkouts and reduced staff needs—and therefore lower
costs. But they also give stores and restaurants the ability
to collect information about users, such as what they’re
browsing or ordering. With first-party data increasingly
important for understanding customers, this additional perk
is a central feature for retailers since it helps them target and
attribute online ads as third-party sources of data become
less accessible.

Prediction
QR codes will become key to data collection. Adoption
will continue apace because QR codes reduce business
costs and give customers a better experience. These codes
will also become an important aspect of first-party data
collection for companies with a physical store presence.

Conclusion
Thank you for downloading “3 Retail & Ecommerce
Trends to Watch in 2022,” curated by Insider
Intelligence Marketing. This document contains
excerpts from 3 of our full reports: Insider
Intelligence’s Payments Trends to Watch in 2022,
Insider Intelligence’s Mobile Trends to Watch in 2022,
and Insider Intelligence's Retail Trends to Watch in
2022. The full reports are available to all Insider
Intelligence subscribers.

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