Fulfilment overview for 2022

Out of the fire, into the frying pan? A more positive fulfilment overview for 2022.

Coming into 2021, off the back of 2020 and what had been seen as an unpredictable disaster, there was a sense of hope that was quickly tarnished as retailers faced a wide medley of issues, such as a shortage of HGV drivers, global material shortages and trade disputes – complications that managed to surpass the unpredictable state of 2020.

There may have been far and few between retailers that were breaking their hearts when bidding goodbye to 2021 and all the issues that had accompanied it. However, late December and January’s activities have given us the best indicator of things to come this year – with both positives and negatives, worries and reliefs all already evident. 

Positive results despite more challenging processes 

In November and early December, while the shift to online, and the preference many converted shoppers have for this medium, cannot be denied, the high streets and shopping centres saw queues of socially distanced customers as restrictions were lifted globally. While this did not elevate all issues for retailers – both shoppers and retailers alike had been warned far in advance of Christmas of the difficulties to come – it perhaps took some strain off a tightly stretched supply chain. 

The introduction of Omicron, and its rate of transmission, did of course shake things again. While stores did not close officially over the past few months, many people were too scared to leave their houses and risk illness during the Christmas season and beyond. Online retailers, such as ASOS, took a hit during the seasonal period due to the new variant. It was easy for the public and retailers alike to panic at the idea of another variable being added to an already unpredictable mix – however, it is safe to say that we have come out the other side, and results were not as predictable as one may have imagined. 

Many people globally fell ill to the virus, as a result, a sizable chunk of workers were unable to fulfil tasks in the tight run-up to Christmas, a time when they were needed most. Staff shortages have been a large part of the delivery problem, with many complaining of packages arriving well past the due date or not at all, and this further exacerbated the obstacles already present. While this may have been more of an issue on the consumer end, for online retailers we saw an increase in online revenue spent in December 2021 compared to 2020. The results were positive, despite the processes being more difficult. 

Will a traditional retail experience return in 2022?

While scary at the point of introduction, we can now see Omicron as a positive sign of things to come. In recent weeks we have seen that despite case numbers, there is a higher chance of returning to normality due to the severity of the illness becoming substantially weaker. Ecommerce may not see the same level of growth as it did in the earlier months of the pandemic, and an, albeit altered, traditional retail experience may return somewhat.

However, while COVID has persisted as the most common and unpredictable factor for supply chain and retailers over the last 2 years, it is not the sole cause of disruption – if one factor leaves the equation for the supply chain chaos, how do we seek to continue this year?

Shipping costs look to rise a staggering amount once again, with experts saying that the shipping crisis won’t come to an end until at least 2023. Shipping container costs are due to rise by 30% this year on average, which unfortunately leaves the retailer with little choice but to raise their prices in accordance with the increase in shipping prices – this is less than ideal for both the retailer and consumer. Retailers will need to find new, competitive means to impress buyers and add value to their products to offset these higher prices – not an easy feat. 

Additionally, retailers will be looking for new and creative ways to offset the reality that inventory may be unavailable at crucial moments. Customers have been king in recent years and we do not expect that to sway – but for businesses to remain viable, they must look to ramp up the services they offer their consumers and new potential customers. Competition has never been fiercer and solutions are available to deploy the best services possible if they chose to do so. 

Exciting times for innovation ahead

2022 also looks to be an exciting year, in spite of these continuing challenges. In a world where space travel innovation remains a key focus, the rise in automation in the workplace continues at pace and where the biggest companies by value are technology businesses, much future retail-related M&A will surely be tech-driven. We now live in a fast-moving world of digital retailing. New ideas and approaches can quickly build traction in the market – with both retailers and consumers – creating an unexpected buzz and casting a spotlight on previously unknown companies and sectors. In looking at 2022, retailers are beginning to look outside the scope of traditional experiences and begin to offer consumers a futuristic model and shopping experience. Most notably with the integration of blockchain technology for things such as bitcoin payments, and the possibility of being able to sell NFTs via their e-commerce platforms.

Consumer preferences and attitudes are continuously shifting, and as more and more customers have moved to the online marketplace, investors have had no choice but to notice this. If Covid has taught us anything, it is that a lot can change in the commerce space over a short period of time and the increase in M&A by online platforms only confirms this.

Ecommerce, while slowing down somewhat, is set to continue its growth. eCommerce sales are said to hit over a trillion dollars this year – the industry is booming, making the industry more sustainable simply has to have a seat at the head of the table. Sustainability will be huge for this growth to continue. Additionally, there really has never been a more exciting and expanding time for tech in retail – a lot of solutions we now deploy are fast advancing due to the supply chain issues and aiding these issues, many are brand new and future thinking and others are beginning to gain momentum. 

It is early days – but perhaps this year we can switch from worrying about the state of retail and move into an exciting new era, with the technologies and solutions, we have adapted as a result of the challenges now to be used to move forward. It is not over yet, but January may just be a sign of more positive things to come.