With major transformation on the horizon for the retail sector in 2021 and beyond, we can expect to see sustainable growth that prioritizes the customer, from a continued shift to omnichannel shopping and e-commerce to using technology to create a more personalized shopping experience. Here are four trends in retail that we can expect to see in 2021 and onward.
1. Disruption to Customer Loyalty
A report from McKinsey found that about three-quarters of Americans changed their shopping habits in 2020, with 40 percent of them changing brands too—twice as fast as 2019. Younger generations were even more likely to switch, demonstrating that now more than ever, companies need to really invest in customer loyalty.
Although it’s easy for retailers to get caught up in the trend of convenience, value is an equally important driver of shopping behavior change. Even younger consumers look for high quality and brands that align with their values, two factors that inspire change for about 40 percent of younger shoppers.
2. Long-Lasting Shift to e-Commerce and Online Shopping
COVID-19 has cemented the importance of unified commerce across both physical and digital retail channels. In the United States alone, e-commerce grew more than three times as fast from 2019 to 2020 as it had in the past five years, as more consumers are willing to buy products before they even try them.
Many consumers expect omnichannel shopping options from brands, with two-thirds of survey respondents citing the growth of omnichannel and digital shopping as the retail sector’s greatest trend—and its biggest challenge. While e-commerce is often less profitable than brick-and-mortar stores, brands can subvert this by investing in data-driven marketing and distribution management for long-term growth.
3. Restructured Approach to Supply Chain Management
While the Suez Canal blockage lasted only a few days in March 2021, it held up almost $10 billion worth of goods, highlighting the vulnerability of global supply chains to external forces beyond our control. The rethinking of global supply chains has been underway for some time. Governments and companies continue to their supply chains to look for weak points, strengthen resilience, and prevent disruptions, like the global chip shortage that left thousands of brand-new electronics and cars unable to be sold for months.
With the rise of globalization, supply chains have usually been optimized for both cost and efficiency, but the events of the past year and a half have shown us that resilience and agility are just as important.
4. More Personalized Shopping Experiences
For quite some time, I have been predicting that the future of retail will be driven by stronger branding and increased digitally influenced immersive customer experiences. Seventy-six percent of consumers are more likely to purchase from a store or brand they trust right now. This is where brick-and-mortar stores have a bit of an edge over e-commerce brands. By offering a more experiential option for consumers, they can build stronger, more memorable relationships with their customers.
Experts found that consumer demand for in-person experiences is returning, despite the continued growth of e-commerce sales. For online retailers, connecting customers to relevant products can help them stay competitive, as more than 30 percent of online shoppers “bounce” from an e-commerce website if they can’t easily find what they’re looking for right away.
COVID-19 has become a brutal accelerator of digital transformation trends that were already underway. Global and retail economies are returning to strong growth in 2021 and beyond. Technology is now taking a more central role in transforming all industries, especially retail. Welcome to the “new normal” and for more, watch my latest webinar on the “Disruptive Post COVID-19 Future of Retail.”
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