2021 has been a year of ups and downs in the retail space; from supply chain issues to continued concerns about in-person shopping.
As we step into 2022, we’ll continue to see changes as brands navigate these ongoing issues and shifts in consumer behaviors.
Here are a few retail trends we’re likely to see in 2022 that take the rapidly evolving retail landscape into account.
Direct-to-consumer brands continue diversifying their product lines
The pandemic opened doors for new direct-to-consumer (DTC) brands—at the same time causing the market to become more crowded and more competitive.
One example of this can be seen with St. Louis-based Summersalt, a brand known for its size-inclusive sustainable swimsuits and apparel.
In 2021 the brand ventured into outerwear, leveraging the founders’ extensive expertise in apparel fit to address a growing consumer demand. The collection launched with two essential silhouettes in sizes XS through 2XL.
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According to the State of DTC Report in 2019, there were only 320 DTC apparel brands on the list. However, in 2021, that number jumped to 1,111.
The growth here illustrates that specific verticals in the DTC space are becoming increasingly saturated, and it seems diversification efforts are crucial when it comes to brands’ long-term viability in an increasingly competitive sector.
More disruption in the alcoholic beverage space
In 2021, beverages marketed as functional, healthier, low-alcohol alternatives grew substantially. It seems this trend is still only in its very early stages, too: The low/no-alcohol market is expected to increase 31% by 2024, according to the IWSR.
“I think what we will see more of in this space is the concept of ‘functional unwinding’,” said Andrea Hernandez, founder of food and beverage trend newsletter The Snaxshot. “Younger consumers are searching for “better for us” ways to take a load off.”
As a result, many alcohol companies are now striving to strike a balance between holistic wellness and alcohol consumption in response to these shifting behaviors, attitudes, and practices.
One brand finding their footing in this space is Juneshine, a company known for its low sugar, gluten-free hard kombucha. In late 2021, Juneshine announced its latest funding round: $24M in Series B funding that will help expand their footprint within the category.
“Our Series B gives us the resources needed to accelerate national category growth and activate our celebrity ambassador campaign across the country,” said JuneShine’s CEO Greg Serrao.
The company is also using the funding to enter new, healthier categories of alcohol beyond hard kombucha in the coming year (see also: product line expansion, which we touched on earlier), thus establishing Juneshine as a trusted brand for alternative alcoholic beverages.
Managing nationwide supply chain delays via on-shore manufacturing
Supply chain issues rocked the retail world in 2021, and as a result, brands are now working to find creative solutions to these ongoing issues causing massive order delays.
For example: Modern furniture brand Modloft faced supply chain challenges that ultimately lead the brand to relocate its manufacturing to the United States and Mexico.
It was a costly move, but was one that helped the brand navigate the supply chain snags resulting from COVID-19.
“Producing in North America allows us to bypass international shipping bottlenecks, get products in our warehouse faster, maintain lower levels of inventory, and deliver a better customer experience–far outweighing the higher product costs,” said Ted Toledano, Modloft’s Founder and Chief Visionary.
The move seems to be paying off: Modloft is seeing year-over-year revenue growth that’s up 100% from 2020 despite the increased manufacturing costs.
Future retail trends: 2022 and beyond
While we can’t be certain what’s in store for the retail landscape in the year ahead, the trends and patterns discussed here are ones we can plan on seeing remain topics of conversation and innovation in the coming months.
However, one thing does appear to ring true: As this space continues to rapidly evolve, the brands that stay agile and adapt to ever-changing consumer demands and behaviors will be the ones that find long-term success.