Future of Retail

The retail trends, insights, and advice you need to succeed in 2022

Executive summary

The massive changes that 2020 brought to the retail industry are here to stay. And now that parts of the world are opening up, and consumers are craving opportunities to shop in person, they expect the buying experience to be consistent both online and off.

Increased retail vacancies have created an opportunity for a new wave of digitally native brands to experiment with physical retail. The surge of brands into offline channels means retailers must focus on creating engaging and memorable experiences to win foot traffic.

As a result, businesses must level up their omnichannel strategy to deliver a smooth shopping experience across channels. But to do this, employees need training in new technology like virtual shopping, live chat, and tools to manage alternative order fulfillment options like curbside pickup.

As the role of the retail store employee evolves, staff are demanding higher compensation and better working conditions. Retailers need to adapt if they want to attract and retain employees who are happy, engaged, and excited to meet customer expectations.

These changes demand new retail strategies to thrive. That’s why we’ve collected global, data-backed insights from hundreds of retail brands and thousands of consumers to get the full picture of what’s in store for 2022, as well as the strategies and products your business needs to succeed over the next year.

Welcome to the future of retail.

Trend 1

Digitally native brands drive retail competition

Merchants will prioritize experiential retail to drive foot traffic and customer loyalty

Key takeaways

  • Consumers are craving in-person shopping experiences

    Consumers are craving the in-person experiences they’ve been missing, and brands are investing in experiential retail despite the fact that it could prove logistically difficult.

  • Favorable lease terms are tempting direct-to-consumer brands into brick and mortar

    Higher retail vacancy rates are leading to more favorable commercial lease terms that might lure digitally native brands to venture into the world of physical retail.

  • Physical retail becomes an affordable acquisition option

    Rising digital advertising costs will cause many brands to look to physical retail as a form of advertising to lower customer acquisition costs.

Demand for in-store shopping is on the rise

In-store shopping is ramping up again now that stores have begun to reopen following lockdowns, vaccination rates are on the rise, and consumers are hungry for in-person experiences.* As a result, 32% of brands we surveyed* said they’d be establishing or expanding their use of pop-up and in-person experiences in the next year, while 31% said they planned on establishing or expanding their physical retail footprint. And we’re already seeing physical retail making a resurgence. In fact, sales growth on Shopify’s POS outpaced ecommerce throughout 2021.

+22% Growth in global number of merchants using Shopify POS

Sourced from Shopify data, 2021

To stay competitive, 40% of brands* surveyed said offering experiential retail would be a top priority for them in the next year, something 32% of consumers say they are likely to engage with.

With retail vacancy rates at an all-time high, we’re in a tenant’s market, meaning now is a better time than ever to negotiate more favorable commercial lease terms, including shorter contracts.

This will lure many digitally native brands, struggling with rising digital acquisition costs and an increasingly crowded ecommerce space,* to use physical retail as a way to offer a consistent brand experience across all channels. To win over customers, in addition to being strategically located, brands will need to focus on creating interesting and unique experiences in store.

This influx of brands into the physical retail space will increase overall competition. Retailers will need to think about their storefront as their brand proposition, and embrace competitive differentiators like experiential retail to win foot traffic and customer loyalty.

The acronym ‘DTC’ also includes sales through stores that you own. What few consider is that customer acquisition costs are typically lower in owned, physical footprints. But for it to work, the brand must be strong.
Web SmithFounder, 2PM

Increased competition in physical retail means brands must create unique experiences to stand out

Just as the pandemic caused ecommerce competition to skyrocket, consumers’ increasing appetite for in-person shopping experiences will boost competition in physical retail. Retail brands will need to focus on creating exceptional in-person shopping experiences to stand out, but according to our survey, approximately 57% of retail brands* said coordinating experiential retail would be a top challenge in the coming year, especially with 95% of consumers expecting retailers to have COVID safety protocols in place for customers shopping in store.*

Digitally native brands might be at an advantage when it comes to experiential retail, since they’ll be building experiences as an extension of their already-established online reputation and community.

The quick feedback loop that’s available for ecommerce brands helps them develop a really strong relationship with the customer. Starting with building your brand online can set you up for greater success when moving into physical retail.
Jack MeredithVP of Marketing, Kettle and Fire

Coordinating in-store experiences will also be challenging for brands that have a substantial ecommerce arm to their business. These merchants will need to figure out how much of their retail space to use for experiences and how much to dedicate to holding inventory that’s being sold through their online store.

Cracking the foot-traffic code will be another top challenge according to 55% of brands surveyed by Shopify. While increasing in places like the United States and the United Kingdom, foot traffic is still not back up to pre-pandemic levels.

Lastly, urbanization will play a key role in the future of retail. In 2020, 56.2% of the world population lived in urban environments and the United Nations projects this number will increase to 68% by 2050. This means more brands will compete in dense, urban areas, and will have to come up with strategies to succeed in smaller retail store spaces.

I see merchants using more of their space for inventory that’s going out the back door through their ecommerce channel, as opposed to the inventory that’s going out the front door to their retail foot-traffic audience. These are challenging decisions for merchants to make.
April UnderwoodFounder and CEO, Nearby

Brick-and-mortar stores reach more customers while reducing acquisition costs

Digitally native brands that get brick and mortar right will not only unlock a large (and growing) segment of consumers who prefer in-person shopping, but they can also lower their customer acquisition costs, as did the brand Lively.

A physical retail store is an avenue for connection and community, and provides the opportunity to attract more local customers. Forty-seven percent of consumers* said having a local presence was a significant or very significant influence on which brands they chose to purchase from in the past year.

Percentage of consumers who are significantly more likely to buy from brands with a local presence

In 2021 47% of consumers globally were more likely to purchase from a brand due to its local presence

Sourced from Shopify eCommerce Market Credibility Study, 2021

And more than one-third of consumers in the United Kingdom, Australia, and New Zealand say a sense of community is a top motivator to visit local shops.

In the United States, 81% of Gen Z consumers prefer to shop in store to discover new products, and more than 50% say in-store browsing is a way to disconnect from the digital world.

And while 47% of retailers surveyed are concerned that securing affordable commercial leases will be one of their biggest challenges,* the harsh reality of global brick-and-mortar store closures has also created an opportunity for a new wave of retailers to succeed. Lower rents and shorter leases mean you can more easily try out physical retail and new markets.

So many businesses have closed, so there’s a lot of availability, and a new wave of really cool, interesting businesses are going to pop up. It’s a great time to think about expanding into a physical space.
Kimberly SmithFounder, Marjani and Board of Directors, National Retail Federation

How to create experiential moments that win over customers

Recommendation 1

Use pop-up shops to test consumer demand for physical retail

Analyze customer data to test and learn

Exploring experiential retail doesn’t mean you have to go directly from online to opening permanent retail stores. You can start small and apply your learnings from pop-up shops to your expansion strategy. Use the abundance of ecommerce customer data at your fingertips to drive your physical retail decision making, including where to pop up and what types of products to sell.

Analyze your ecommerce dashboard to understand where the bulk of your new and repeat customers live and what they’re buying. Then use this data to localize your product assortment and experiences. Try testing a pop-up in these locations, and where you're most successful, consider opening a permanent storefront.

Find the pop-up format that’s right for your business

  • Pop-in stores. You can temporarily rent space within an existing brick-and-mortar store for a weekend, a week, or longer. It’s key to partner with retailers who reach a similar target audience.

  • Pop-up events. Emerging and established brands attend pop-up events to reach new audiences, build brand awareness, and boost sales. This setup is great for exposure because of the combined marketing efforts.

  • Leased commercial space. If you’ve found success with pop-up shops and are looking to expand into your own retail store, getting your own short-term retail lease is a perfect way to test the waters.

Recommendation 2

Invest in creating unique in-store experiences to build brand affinity

The customer data you’ve collected online will help you strategically create experiences as an extension of your digital presence and community. Building a sense of belonging is easier to do in a physical environment, and can encourage customers to buy into your brand versus just the products you sell.

You can do this by creating community-focused spaces that offer events, workshops, brand collaborations, or support for charitable causes. Create memorable in-store experiences that align with your unique brand values, rather than just trying to increase sales revenue and boost your bottom line.

Recommendation 3

Use customer profiles to offer personalized recommendations

Integrate POS with your ecommerce platform

According to our research, 50% of consumers* say that personalization based on their interests and past purchases have influenced their decision to purchase from a brand over the last year. Offering customized product recommendations or personalized product testing experiences is one way to achieve this in store. The key is to sync your customer profiles through a point of sale (POS) that integrates with your ecommerce website. This way you can easily review a customer's holistic purchase history.

Offer in-store appointments

We’ve also seen an increase in Shopify merchants using appointment booking apps. For the period of January 1, 2021 to September 30, 2021, the number of installs for appointment booking apps increased by 23% globally, compared to the same time period in 2020.

34% of consumers are likely to engage with appointment shopping in 2022

Shopify eCommerce Market Credibility Study, 2021

This omnichannel sales strategy often involves stocking less inventory on the sales floor and using your space to schedule one-on-one or group appointments with shoppers, allowing for more personalization and room for in-store experiences.

One way to create this type of personalized experience is to set up testing stations and let customers make appointments to test new products before buying. Then have one employee equipped with a mobile POS manage each station. When the customer arrives for their appointment, your staff can pull up their customer profile and make personalized recommendations based on past purchases.

Train your employees to improve the in-store experience

Training and preparing store staff to add this type of value to the in-store shopping experience will also keep them more engaged, provide opportunities to upsell or cross-sell, and create growth opportunities—something that’s crucial to retaining employees in today’s retail landscape.

Merchant spotlight

How Lively found success with physical retail

Lively was in a position that many digitally native brands find themselves in today: with steady sales and a loyal customer base, yet frustrated by the growing expense of acquiring customers online. Motivated by lowering costs, lingerie maker Lively opened a brick-and-mortar location. The brand went in with an advantage that many new brands, and even some established brick-and-mortar retailers, don’t have: a thriving community that wants to engage with the brand in person.

Opening permanent locations not only helped Lively lower acquisition costs—about half of all Lively customers now discover the brand just by walking past the storefront—but operating both online and offline helped them increase average order value by a whopping 80%.

Our stores operate like billboards.

Michelle Cordeiro GrantFounder, Lively

As we’ve seen from current retail vacancy rates, not all retail locations are successful. So what makes Lively different?

For one, Lively was smart about where they chose to open locations. They started by hosting in-person events in their brand ambassadors’ home cities, then pop-ups. Through their first pop-up experiment, they learned that visitors didn’t just want a showrooming experience. They wanted to leave with products in hand. That gave Lively the confidence that a more traditional retail setup was the way to go.

Next, they took what worked well with their online community to design their in-store experience. Lively has always been about community, so it was natural to bring this to retail. Store staff offer customers a beverage when they walk in, chat with them, and generally take a low-pressure, consultative approach to sales.

We opened a permanent location because we wanted a place where we could bring our community together. You want them to get to a place where it’s like you’re just hanging out with your girlfriend. You’re more honest, open, and you’re going to have fun.
Michelle Cordeiro GrantFounder, Lively

Finally, Lively used experiences like appointment shopping to increase in-store conversions and average order value, which is around 60%–80% higher for customers who book one of their “fit sesh” appointments. Customers fill out their personal details and schedule a time to come in for a bra fitting. Unlike the clinical nature of traditional bra fittings, Lively’s staff tailors the recommendations and experience to each customer’s unique needs.

Brick and mortar is far from a guaranteed success story. As shown by Lively, it requires strategy, community, and a standout experience. And that winning combination can deliver standout results.

How Shopify can help

View Shopify reports to find the right store location

You have the right product—now you need the right location. View the sales by billing location report in Shopify admin to pinpoint where your customers live. You can also view sessions by location reports to identify untapped markets where opening a retail store could help reach new customers.

Use Shopify POS to create customer profiles

Equipped with Shopify POS customer profiles that sync in-store and online purchase history, store staff can develop a rich understanding of the customers they serve, offer more relevant product recommendations, and increase basket sizes.

Increase foot traffic with online to in-store order fulfillment

Use Shopify’s online to in-store fulfillment features to maintain a steady stream of foot traffic. Consider displaying in-store product availability on product pages and offering order fulfillment options like click and collect at checkout. For additional fulfillment strategies, check out the Future of Shipping and Logistics.

Trend 2

The post-pandemic customer journey will bring about the next phase of omnichannel shopping

Retailers must integrate in-store and online experiences or risk extinction

Key takeaways

  • Brands are staying competitive with omnichannel commerce

    To stay competitive, brands must create experiences and build relationships with their customers that only omnichannel can offer.

  • Consumers are connecting with brands across multiple channels

    Whether it’s online or offline, consumer shopping expectations and buying journeys have changed and can start and end on any channel.

  • Consumers expect consistency across channels

    To adapt to the next phase of omnichannel, brands must provide a consistent experience across channels.

Omnichannel commerce surfaces as the new normal

As shoppers return to stores, the lines between buying online and in person have blurred. Fifty-four percent of consumers* surveyed say that, over the next year, they’re likely to look at a product online and buy it in store, and 53% are likely to look at a product in store and buy it online.

According to our research, consumer packaged goods and retail companies say sales from their physical retail stores and sales from their ecommerce website are nearly equal, with physical retail generating 18% of revenue and ecommerce generating 19%.*

As a result, 53% of brands* are investing in tools that allow them to sell anywhere. This shift in consumer behavior, combined with the increased competition coming from digitally native brands moving into retail, means it’s not enough to use the retail store for acquisition alone. Retailers must build relationships and experiences with their customers that only omnichannel commerce can offer.

Building relationships with customers is going to be the number one thing, not only through your website but all channels. Your brand presence and message have to be active and engaging across your website, email, and social. This is not only because acquisition is challenging, but also because brands will see the need to keep a dialogue going with their customers.
Robert BefumoHead of Ecommerce Strategy, Parkfield Commerce

After a year of shopping mostly online, consumer expectations have changed. Every buying journey is multi-faceted, and can start and end on any channel. For example, our survey showed that 55% of consumers* want to browse products online and check what’s available in local stores. That’s why over the next year, 43% of brands will focus on showing available inventory in nearby stores.

Customers also want to check out online but return products to a physical store, or look at a product in store and buy online. For 47% of consumers,* these factors have a significant influence on their purchase decisions.

Percentage of customers who are significantly more likely to order a product if they can check out online and return in store

In 2021, 47% of customers globally wanted the option to check out online and return in store.

Sourced from Shopify eCommerce Market Credibility Study, 2021

Brands need to make it as easy and convenient as possible for their customers to shop wherever they find themselves. And in 2022 and beyond, that means providing an omnichannel approach to shopping experiences.
David WagonerCEO and Founder, P3 Media

Brands will be challenged by higher customer expectations, more pressure, and the need to pivot to a retention mindset

Forty-nine percent of the brands we surveyed say breaking down organizational silos between digital and physical stores will be one of their biggest challenges over the next year,* and 47% of retailers say unifying online and in-store operations and data will also prove to be difficult.*

Top challenges retailers say they face over the next year

Bar graph of top anticipated challenges for brands in 2022, which includes securing affordable commercial leases and hiring and retaining employees.

Sourced from Shopify eCommerce Market Credibility Study, 2021

Ecommerce brands moving into physical retail are also increasing the pressure on traditional brick-and-mortar retailers, who are often held back by legacy technology and infrastructure. Retailers are planning to increase their investment in digital channels to drive sales over the next 12 months. According to our study, 49% said they’ll spend more on their company-owned online store as well as social commerce,* 46% on their custom mobile app,* and 44% on livestream selling.*

The future is neither ecommerce or retail. It’s just commerce. So the question becomes, ‘How do you symbiotically integrate both channels?’
Hemant ChavanFounder, Brik + Clik

The right omnichannel strategy can increase average order values and customer loyalty

Brands that are able to embrace technology to unify channels and create an omnichannel strategy will have a competitive advantage that wins and retains more customers.

Accessible, affordable tech is opening up new opportunities for independent retailers because they can now do things themselves that previously were prohibitively expensive, or something only big box stores had the resources to offer.
Kimberly SmithFounder, Marjani and Board of Directors, National Retail Federation

Creating a fully connected physical and digital shopping experience, for example by implementing buy online, pick up in-store (BOPIS), will also help retailers increase their average order values.

In fact, over 50% of adult shoppers use BOPIS, with 67% adding extra items to their carts when they can pick them up immediately. Another advantage is that customers who buy online and return in store can be incentivized to make additional purchases when they return in store. These types of upsell opportunities are available to brands that think strategically about using their store in tandem with other channels.

Some brands are viewing returns as an additional touchpoint, offering an extra discount at return if you use the store credit the same day.
Kyle MonkDirector of Insight, British Retail Consortium

How to succeed in the next phase of omnichannel commerce

Recommendation 1

Turn your retail store into a showroom to improve brand discovery and awareness

When we asked retailers where they’re investing to improve the in-store experience, the most popular answer was showrooming, with 46% of brands* saying they’ll be investing in it throughout the next year.

Showrooming is all about allowing customers to come in and experience the product without having to buy or take home the product right then and there.

Carry less stock in store

Completing the purchase online means you can carry less inventory in your physical stores, freeing up more space for experiential retail and customer interactions. Instead, you can opt to keep the bulk of your inventory in a warehouse.

Make sure the sale is connected to your physical store

The actual purchase may take place online with showrooming, but if the consumer discovered your product in store, you’ll want to make sure the sale is attributed to your physical store. To do that, have your store staff check the customer out online while they’re at the store, or email the customer a unique checkout link.

Recommendation 2

Unify your customer and product data to provide a consistent customer experience across channels

Track product performance across channels

Providing a consistent customer experience across channels requires a unified view of your product and customer data. The best way to achieve this is to build and manage your business through a single platform that lets you manage all your sales channels from one dashboard. This way you can easily connect with third-party solutions and integrate data sources and workflows.

Use a commerce platform that integrates with the sales and supply sides of your business, and a POS system that connects your digital storefront with retail locations in a central reporting hub. Managing your business from one platform will also provide a single view of sales data and reporting. So whether it’s in store, online, or on social media, you can efficiently track product performance across all sales channels.

Sync your product information across channels

Use a platform that automatically syncs product information including price, descriptions, SKU counts, and images to make sure your product data and inventory levels update in real time and are always accurate across channels. Customers can then check what’s in stock, sign up for restock alerts, and choose their preferred order fulfillment method, regardless of where they’re shopping from.

Use brick-and-mortar locations as fulfillment centers

You can also use your brick-and-mortar locations as fulfillment centers to offer flexible, blended shipping options like BOPIS—something that 58% of consumers* say is important to them and 33% of brands are prioritizing over the next year, according to our survey.

Merchant spotlight

How The Sheet Society prepared for the next phase in omnichannel shopping

When customers think about your brand, they don’t see an online brand and an offline brand. They just see your brand. It’s a concept that’s easy to understand, but much harder to put into practice. The Sheet Society gets this right.

The Australian bedding retailer is all about building strong customer relationships. To accomplish this, The Sheet Society centralized its customer data with Shopify, allowing store staff to view customers’ purchase history and offer personalized service that reflects their online and in-person shopping preferences.

All the data we need on our customers is right there in Shopify POS. Now we have a unified database that shares important context on customer preferences and inventory availability across all store locations, which helps us serve them better.

Hayley WorleyFounder, The Sheet Society

Building brand affinity isn’t built exclusively online or in person. It requires a holistic approach to commerce. You need both your online and offline presence to develop it. The Sheet Society accomplishes this with an online store that’s integrated with their brick-and-mortar store. This opens up unique workflows to convert more sales opportunities into revenue.

For example, they offer something called Bed Builder, an augmented reality tool that allows customers to use their iPhones to see how products look on their bed. In store, they offer take-home fabric switches and pre-booked bed styling appointments, and will make up a bed in store with a customer’s chosen combination.

If shoppers want to see how a style complements their existing bed, store staff [can] preload a shopping cart in Shopify POS and [email] it to them.
Hayley WorleyFounder, The Sheet Society

Unifying its customer data and sales channels has helped The Sheet Society increase customer retention as well as in-store conversions. Since using Shopify to sell both online and in person, The Sheet Society lifted its return customer rate to 24% and store conversion rate to 50%.

This next phase of omnichannel requires retailers to think beyond just selling in person and online. Instead, it’s about blending your in-person and online presence to foster community, trust, and retention. Like The Sheet Society, brands that invest in these areas will be poised to succeed in 2022 and beyond.

How Shopify can help

Unify in-store and online sales

Merchants that use Shopify have all the tools they need to manage their business, market to customers, and sell everywhere from the same powerful back office. Customer, inventory, product, and sales data is synced automatically and available in the Shopify admin. Whether products are sold online, in person, or on Instagram, Shopify acts as a single source of truth and helps you run your omnichannel business with confidence.

Attribute retail’s contribution to online sales

One common challenge brands cite is crediting retail stores as the point of product discovery for online purchase. Here are just a few examples of how you can use Shopify POS to attribute sales to the right channels:

  • With Shopify’s Shopcode app, you can generate QR codes that let customers check out wherever they are in store. Use QR codes as physical buy buttons in window displays or on product packaging that direct customers to a product or checkout page.

  • Store staff can create and email wish lists as they serve shoppers to encourage post-visit online purchases.

  • If an item is out of stock, use Shopify POS to process the transaction in store, then communicate with the warehouse to ship the product directly to the customer.

Sell everywhere with Shopify

Trend 3

Consumer and employee expectations push brands to reimagine the retail staff role

Brands that figure out staff retention will have the edge on customer retention

Key takeaways

  • Customers expect world-class service (from everyone)

    Customer service expectations are higher than ever before, which means more responsibilities–and opportunities–for the role of store associate.

  • Brands are reimagining retail roles and compensation

    Retail employees are demanding higher pay and more opportunities, so brands must reimagine the store staff role and compensation to attract and retain employees.

  • Technology is helping brands deliver consistent experiences

    Brands are investing in employee training and technology to help staff deliver a consistent customer experience across all touchpoints.

Brands reimagine the retail staff role with the rise of live chat and virtual shopping

Customer experience plays a big role in a shopper’s decision to buy. It’s the reason why 58% of surveyed consumers* made repeat purchases from a specific brand over the last year. In response, 44% of brands plan to increase their employees’ interaction time with customers over the next year.

Percentage of consumers who say past customer service significantly influences their decision to buy

In 2021, 58% of consumers globally said excellent past customer service influenced their decision to buy.

Sourced from Shopify eCommerce Market Credibility Study, 2021

But engaging with customers will go beyond traditional in-person interactions. Instead, store staff should act as experience hosts, facilitating options like virtual shopping, live chat, and appointment shopping. Our research found that 39% of retailers say they’re investing in improving the tools and technologies employees use to do their day-to-day work.* This includes tools and apps to manage virtual selling, staff shifts, live chat—something 41% of consumers* say is valuable to them—local delivery, and in-store appointments.

Brands are investing in customer relationships through tools and technology

Infographic showing how brands are investing in customer relationships, like 30% of retailers offering appointment-based shopping to improve their in-store experience.

Sourced from Shopify eCommerce Market Credibility Study, 2021

A children’s wear retailer I spoke to pivoted from in-store events to virtual shopping events via zoom during COVID. Suddenly they were having one member of staff walking around the store selling products to two to 300 people per call every week, instead of just a few in person. Retailers who thought innovatively and pivoted thrived over the last period.
Kyle MonkDirector of Insight, British Retail Consortium

But customer satisfaction and retention require employee happiness and retention, something that’s currently a top challenge in the retail industry. Employees at major retailers have been striking, quitting, and making their unhappiness with the industry known. In the United States, job openings have hit record highs, and in the United Kingdom, employers are facing the worst shortage of job candidates on record.

Retailers are feeling these staffing challenges to different degrees, and for different reasons, depending on location. But one thing is true across the board: Brands need to figure out how to overcome staffing challenges if they want to succeed in an increasingly crowded retail market.

If retailers don’t reimagine the store staff role, finding and retaining employees will be difficult

The future of the store is in the hands of its employees. That’s why 40% of brands we surveyed are striving to improve employee acquisition and retention.

And although stores have begun to reopen, retailers will continue to struggle with the fallout from pandemic-induced layoffs. Forty-nine percent of surveyed brands* say hiring and retaining employees will likely be a top challenge in the next year.

If retailers want to win back store staff, they must improve their role by rethinking job descriptions as well as pay.

Right now there are so many positions available, but it’s hard to fill them. We need to start rethinking the traditional view of these roles and how we pay them. You can’t have a great business and not have good team members. Consumers are really keen on that.
Kimberly SmithFounder, Marjani and Board of Directors, National Retail Federation

Once employees are hired, retailers will face the challenge of training them in technologies that power the experiences customers crave. Our survey found that 40% of retailers* plan to invest in training store staff to interact with customers using technology to improve the in-store experience. This includes virtual selling apps, live chat, and using software to manage click-and-collect order fulfillment.

Happy and engaged employees lead to loyal customers

Hiring retail store staff and training them in emerging technologies will not only pandemic-proof the store employee role, but also result in a better overall customer experience.

Fifty-four percent of consumers we surveyed purchased from a specific brand in the last year because they could easily reach customer service on the channel of their choice.* And since 58% of consumers purchased from a specific brand due to excellent past customer service,* retailers that invest more in their employees will win more customers.

Providing store employees with more opportunities to grow, and more flexibility, will also increase employee happiness, engagement, and retention. This in turn leads to better customer retention.

How to improve the employee experience and meet customer expectations

Recommendation 1

Create more specialized roles and increase compensation to match

One likely explanation for staffing shortages in the retail industry is that store employees are quitting due to burnout. Jobs that used to include folding and organizing merchandise, greeting customers at the door, pulling inventory from the stockroom, and customer checkout, now also include making sure customers are keeping a safe distance in store, cleaning surfaces routinely, managing in-person or virtual appointments, responding to live chat, and coordinating curbside pickup orders.

Store staff are demanding more benefits, flexibility, and higher pay in light of those increased responsibilities, but brands should also consider offering more specialized roles. Increased specialization not only prevents your staff from feeling spread too thin, but keeps these roles from feeling mundane, which can lead to employee churn. Consider hiring virtual shopping specialists, or staff that specialize in appointment shopping—or train high-performing employees in new technologies, to keep them learning and engaged.

Look at your employees in a different way, not just as store staff, because that mundanity gets to everyone. Use technology to empower your store employees, as opposed to replacing them. In independent retail, you still need that touchpoint to add a human element even during virtual interactions.
Hemant ChavanFounder, Brik + Clik

Recommendation 2

Make sure you’re providing a healthy work environment for employees

Employees stay with good teams and good managers. Creating a healthy work culture that treats employees with respect, offers flexibility, and recognizes employees for good work should be the foundation for any employee retention strategy.

One way to make sure you’re maintaining a healthy work environment is to schedule weekly one-on-one meetings with store staff to check in, give and receive feedback, share praise and recognition for their work, and discuss growth plans for your employees. Whether they want to learn new technologies like virtual selling and live chat, or prefer to manage the sales floor, you can create an engaging and positive work environment that they’re excited to be a part of.

Merchant spotlight

How UNTUCKit unlocked employee-led growth

Sometimes finding that perfect fit requires a little extra assistance, which is where our store associates are so helpful. We’re excited to be able to make their expertise available to our online shoppers.

Chris RiccobonoFounder and Executive Chairman, UNTUCKit

UNTUCKit’s mission is to help every customer find the perfect fit, so it’s no surprise that their store staff offer a high-touch experience to customers, complete with style recommendations and fit expertise. Even when the pandemic hit, they were able to continue offering this high-touch customer service while stores were closed through their partnership with Hero, a virtual shopping platform.

Virtual shopping is not only effective, with 88% of customers purchasing within 24 hours of chatting, but it has helped pandemic-proof the store staff role.

According to Kaitlin Gottlieb, director of omnichannel sales and clienteling at UNTUCKit, although they implemented virtual shopping because their stores were closing as a result of the pandemic, virtual shopping is here to stay.

We’re seeing good momentum with it. It’s about how to build a relationship based on where the customer wants to shop—they can help you digitally or in the store—and that’s what’s keeping customers engaged.
Kaitlin GottliebDirector of Omnichannel Sales and Clienteling, UNTUCKit

She believes this is part of a larger trend: the evolution of the retail employee role. Customers expect store staff to know things like their preferences, shopping history, and even the status of shipped orders. In response, UNTUCKit equips their store staff with omnichannel customer data, which empowers them to offer more personalized shopping experiences, and as a result, a better customer experience.

Christy Farr, senior director of stores at UNTUCKit, adds that this evolution requires a change in how they recruit and pay their store staff.

Over the past decade, UNTUCKit has grown to 80 locations, due in part to how they approach employee engagement. Following UNTUCKit’s model will unlock employee-led growth for brands that want to succeed in 2022 and beyond.

It’s no secret that it’s been challenging to hire and retain talent in retail. We’ve adapted our approach in recruiting. Our experience has shifted to a dynamic omni approach, so our employees have to be comfortable navigating that. We’ve also adapted our bonus pay to reflect associates’ omni performance so the employee gets credit for the sale on any platform.
Christy FarrSenior Director of Stores, UNTUCKit

How Shopify can help

Improve customer service with virtual shopping apps

With Shopify, store staff can go beyond in-person interactions and use virtual shopping apps to serve online shoppers in real time through text and video. This technology extends in-person service to online shoppers and boost store-assisted online sales, while diversifying the role of store associates and enabling them to earn commissions for the online sales they assist.

Equip store staff with best-in-class technology

To ensure customers get the best service, equip store staff with the best tools for the job. With Shopify POS, store staff can lean on customer profiles that centralize online and in-person purchase history to cater their service to the shoppers they serve better and build on the context of past interactions.

Remove redundancies and pursue sales opportunities

Try Shopify Inbox and serve online shoppers via live chat. Use automated replies to resolve common FAQs and free store staff to spend more time serving shoppers with purchasing intent. See which items shoppers have in their cart in real-time and share custom discount codes to close the sale. When shoppers are interested in out-of-stock items, send them a follow-up once you restock to close the sale.