Forecasters believe 2022 will be a kind year to retailers, with total U.S. retail sales expected to increase 2.5% year over year to an estimated $6.6 trillion, according to a report from Insider Intelligence. And once again, in-store sales will account for the bulk of that – more than 80% – even as e-commerce continues to grow.

But the look and feel of retail will continue to change rapidly, as retailers try to keep up with consumers’ evolving expectations around digital innovations and navigate the ongoing challenges posed by the COVID-19 pandemic. Here are five trends that retailers should be aware of heading into 2022.

1. Buy Now, Pay Later Has Officially Arrived

Installment plans are nothing new, but a new class of startups has helped make them fashionable for Millennial and Gen Z consumers. Providers like Affirm, Klarna and AfterPay have marked their Buy Now, Pay Later (BNPL) services as an easy way for younger shoppers to purchase the latest tech or fashion without having to pay the full price all at once – and while avoiding credit card interest. Consumers made roughly $100 billion in BNPL purchases in 2021, up from $24 billion in 2020.

Retailers are implementing these services at warp speed. Amazon partnered with Affirm for a program that lets shoppers split purchases of $50 or more into monthly installments, with loans starting at 0% APR. Square acquired AfterPay, and Target and Apple have announced their own BNPL program. In just a few quick years, BNPL has gone mainstream.

There’s good reason for stores to embrace BNPL. Studies show the option drives sales, with one suggesting it can lead to a 20% increase in conversions and an 87% spike in average order values. And, increasingly, as younger consumers come to expect BNPL, they may bypass retailers that don’t offer it in favor of ones that do.

2. Supply Chain Shortages Underscore the Need for Data

There’s no consensus on when the global supply chain challenges that haunted retailers for the past year will be cleared up, but experts agree it won’t be anytime soon. And the implications of that are enormous. The shortages jeopardize customer loyalty, as shoppers break their routines and migrate to retailers that may be more likely to have in stock what they’re looking for. They also pose an opportunity for retailers to attract and retain new customers.

Technology and data are becoming increasingly crucial in helping retailers navigate shortages, since it can help them better stock alternatives. For example, if one popular brand of office chair is unavailable, data can help an office supply store stock others that more or less fit the bill, meeting shopper requirements.

“‘Small Data’ will help companies deliver on core objectives – efficiency, risk mitigation, cost reduction, and more,” Amen Reghimi, product VP of Jaggaer, predicted for the publication Supply Chain. “Big Data got all the attention a few years ago, but the value of smaller, AI-driven data insights is now in the spotlight. Embedding such intelligence in tech platforms has a big impact on confident decision making.”

3. Labor Shortages Will Necessitate Tech Workarounds

Labor shortages, too, will continue to pose a challenge for retailers in 2022 and beyond. The Bureau of Labor Statistics reported that a record 4.3 million Americans quit their jobs in August, followed by another 4.4 million in September. That’s nearly 3 percent of the entire American labor force per month.

The pandemic has transformed the American job market, while creating headaches for both retailers and shoppers. Staff shortages lead to longer lines in stores, slower fulfillment times and fewer associates available to help convert sales. And, of course, these challenges come at a time when brick-and-mortar stores are facing more competition than ever from e-commerce.

Retailers will continue to offer higher salary increases and better benefits to attract and retain employees. But they’ll also turn to technology to help compensate for the shortages. In its 2022 forecast, the technology company NCR Corp. predicts that “retailers will prioritize and invest in technologies that power end-to-end store management, labor automation and alternative checkout options in 2022,” Payments Journal reports.

4. Contactless Payments Tease a Cashless Future

Contactless payment options like smart cards, wearables, key fobs and mobile apps existed before 2020, but the pandemic helped normalize them. According to a study from Verizon, 33% of adults had either heard about or used contactless mobile payments for the first time amid the pandemic.

That technology isn’t going anywhere. According to a new report, the global contactless payment market size is predicted to hit $6.25 trillion by 2028. Driving that growth is perceived ease of use and the enhanced security protections contactless payments offer. For retailers, there’s another benefit: They speed up checkout.

A recent study by Visa showed that contactless payments aren’t just seen as an option for consumers, but a preference. All things equal, 63% say they’d switch to a new business that offered contactless payment options. And where many new technologies are driven by younger consumers, contactless payments hold appeal across all age groups. Baby Boomer preferences for contactless payments jumped from 45% before the pandemic to 55%.

5. Store Redesigns with Customer Safety in Mind

Surveys have shown that despite the lingering threat of virus variants, most consumers feel comfortable shopping in-store and that many prefer it after the pandemic kept them away for so long. In response, retailers have a responsibility to help them ensure they continue to feel safe while shopping.

Brick-and-mortar stores have been redesigning their spaces accordingly, building in extra room to keep their customers socially distanced and adding protective shields at checkouts. They’re also allocating more space for contactless payment as well as conveniences that became popular during the pandemic, like curbside and in-store pickup. Aesthetic changes to stores that once seemed temporary now appear to be destined for permanency.

If you’re redesigning or upgrading your store, now’s the time to replace any worn or outdated furnishings, which can give shoppers the impression your store is unclean or inattentive. Commercial Zone offers a full line of site furnishings – including clean stations, trash and recycling containers, planters and benches that can complement any space, telegraphing your store’s commitment to cleanliness. One attractive addition to any entryway is our PolyTec Trash Container Clean Station, which offers a trio of sanitization options: a hand sanitizer dispenser, glove dispenser and wipe holder.

Learn more about Commercial Zone’s more than 600 unique products at commercialzone.com. Or call 800-782-7273 to talk with a member of our team of trained experts, who can help you integrate them.