5 trends: How retail will change in 2021
5 trends: how retail will change in 2021
We live in unpredictable times. Digital technologies are advancing at a frantic pace as the global pandemic continues to change the way consumers live, communicate, work and shop. Hardly a day goes by without new obstacles for retailers that challenge their ability to quickly adapt to the ever-changing "new normal".
But as we see, where there are changes, there are opportunities.
In 2020, $189 billion was spent on online shopping, up 33% from 2019. 21 also promises to be a profitable year for digital merchants. Several key business and technology trends have already taken shape, and it is wise to consider them at the end of 2020.
Here are the top five retail forecasts for the coming year and why we need to keep an eye on them.
1. Alternative business models are profitable
Not so long ago, sellers simply sold goods to buyers. But digital technology has fundamentally changed the old-fashioned transaction model, and new opportunities offer consumers an even more comfortable way to pay for value.
More and more brands provide subscription products. Some retailers are exploring ways to use technologies such as smart speakers and IoT concepts for automatic restocking. In addition, many companies are blurring the line between renting, selling, and subscribing.
This is how Apple sells its hardware today. The company allows consumers to break down purchases into monthly payments, making big sales more attractive. But they are not the only ones.
Retailers like Nordstrom, Macy's, Eileen Fisher, Walmart, and Patagonia are now applying the same methods to clothing, tools, and more. The rent-buy model, and even the sale of used and refurbished goods, is particularly attractive to consumers who are reluctant to buy, need only a one-time item, or lack funds. It also strengthens the brand position as customers interact with the company throughout the product lifecycle.
2. Delivery of the "last mile"
Food delivery companies have revolutionized food delivery from restaurants and grocery stores. But why stop there? FedEx, UPS and Amazon are struggling to keep up with demand during the pandemic. As a result, partnerships with last mile delivery companies are becoming increasingly feasible as retailers look to use their physical stores to fulfill local online orders.
Last mile delivery services are ideal for keeping your business active during the pandemic. They can be easily scaled with gig economy workers. If your car has a back seat or trunk, you can easily deliver the goods.
For example, Bed, Bath & Beyond recently announced a partnership with Shipt to offer same-day shipping for orders from both companies' e-commerce platforms. The service is available for a flat fee of $4.99 for orders over $39. Shipt has also partnered with Costco, CVS, Office Depot, Petco and Target.
3. Shopping mall as a distribution center
Changes in consumer behavior will have consequences in 2021. With rented space and storefronts in malls shut down due to lack of foot traffic, retailers are looking to turn them into fulfillment centers. There is a remarkable synergy in using these e-commerce spaces, turning them into mini distribution centers in some cases, especially when combined with last-mile delivery services.
Amazon has already started eyeing this model to further expand its footprint and same-day delivery network. He is reportedly negotiating with mall operators to take over empty areas.
Apple is another retailer that has recently started to use its retail stores, turning them into distribution centers to deliver products to consumers faster. Although, this trend preceded the pandemic and is part of the company's planning. COVID-19 and the associated growth of e-commerce are accelerating this process.
4. New concepts of traditional retail
Despite the massive shift to e-commerce, physical stores aren't going away anytime soon. They are just going through a time of transformation. Several high-profile retailers are focusing on combining online and in-store shopping, emphasizing creating a more engaging and socially distancing shopping experience. For example, Walmart recently made headlines when it announced a major overhaul of 200 of its supercenters into airport-themed stores with more prominent signage, contactless checkout, and other innovations.
Brands are moving away from the traditional concept of aisles and fully stocked shelves. The physical store should no longer be considered the final destination on the path to purchase. Combining the strengths of both online and physical stores allows for a more compelling hybrid model that transforms the retail space into the center of the experience.
This could mean offering pre-production meetings so that shoppers can try out the product and then order online (thus eliminating in-store overselling). Retailers can also set up a demo environment, such as the Canada Goose Arctic Room, which reaches -20 F, allowing potential buyers to test the jacket's performance in real arctic conditions. Augmented reality and virtual reality are also of great importance in the new round of retail development.
5. Online Presentations - Mainstream
Video calls have already become mainstream in the business and everyday world. People see each other, share screens, and exchange information. Retailers are also starting to realize the value of video chat as a consulting and sales tool. Whether a consumer is buying a car, furniture, or high-end clothing, why not offer the opportunity to connect with a sales rep or product expert online at a convenient time? It could be after work, on weekends, or even late at night. Retailers need to be prepared for flexibility in determining the shifts and schedules of their employees.
In addition to the convenience factor, online consultations allow you to share product videos, view technical specifications, familiarize consumers with product demo features, and build trust through face-to-face interaction. Today, most buyers come to the store, salon, supermarket already knowing what they want.
The task of retail in 2021, using the knowledge and skills acquired in the 20th year, is to create conditions for meeting the needs of the client, which in turn will bring a guaranteed income. And for this, it is necessary to delve into Client Analytics in more detail and use experience, knowledge, and technology to the fullest.
Kamilla Kostenko Marketing&Communication Manager
Based on material from digitalcommerce360.com
