During 2021, global retailing sales rebounded to surpass pre-pandemic levels buoyed by the expansion of e-commerce. While store-based sales saw recovery with the return of footfall in malls and stores, they have yet to recover to pre-pandemic levels. Thus, the channel shifts accelerated by the pandemic were seen to remain in motion, with online retail sales continuing to grow. The report explores the key trends driving the retail industry during 2022 and its outlook in the short- to medium-term
Global retail sales showed a strong re-bound in 2021 with sales exceeding 2019 levels in real terms. Despite subsequent COVID-19 variants, increased inflation and supply chain challenges, the retail industry has emerged resilient and less vulnerable than other services.
Channel shifts accelerated by the pandemic remained in motion, with continued growth of e-commerce during 2021. While store-based sales saw improvement with store re-opening, sales in physical stores are expected to take a few years to fully recover. Thus, physical retail continues to lose share from overall retailing with more sales shifting online.
E-commerce players continue to increase global dominance. Among the top 10 retail companies globally, Amazon, Alibaba and JD.com stand out with their combined share exceeding the global share of the rest seven leading retail players.
The long-questioned future of physical retail was answered by the pandemic, when despite e-commerce growth sales returned to stores during 2021. Thus, while stores remain relevant, retailers rethink and redefine the “utility” and “purpose” of store with new business models for optimisation and profitability.
The pandemic, as a big event, led to series of short-term and long-term industry shifts. Most of which are set to seamlessly evolve over the next five years, while others would be disruptive in nature driven by new technologies. Given retailers are actively engaged in understanding these trends, different strategic developments are likely to unfold over the future.
Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.
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