retail trends_FEATURED IMAGE

2021 RETAIL TRENDS 1st February 2021

Asset 1

While the retail sector has had its struggles, some have also emerged stronger, bouncing back effectively, notably in regard to digital transformation, brand awareness and customer experience. Due to the challenges of brick and mortar and a highly competitive market dating before the pandemic, many D2C/ B2C brands had already invested, planned and tested their digital strategies; in many respects, Covid-19 accelerated this agenda. Moreover, the latest issues have forced brands to further consider what the future of retail means, how to successfully combine and offer both physical and digital journeys to tomorrow’s customer.

 

finance 2021 trends blog

HYBRID MODEL: THE FUTURE OF BRICK AND MORTAR

Whilst brick and mortar cannot compete with the convenience and breadth of choice available online, it can however, better cater to the human senses and offer a different set of experiences. Afterall, 81% of shoppers globally are willing to pay more for a better experience (Westfield, 2020) and 74% of UK millennials still prefer physical stores to online shopping (The Convergence Continuum by I-AM Shift, 2019).

From creating new and exciting environments and becoming entertainment concepts in their own right, as does Gentle Monster by creating an artistic exhibit within its stores. Brick and mortar can also create personalised and tailored experiences, with 57% of customers that would schedule appointments with instore staff, if given the opportunity (JRNI, 2019). This is definitely an area to tap into and it is what John Lewis is aiming to do with its concierge service launched in 2017 and continuing to evolve both on and offline, with home design, style studios and a beauty concierge.

Moreover, stores can still offer a manner of convenience albeit differently, they can provide curated products and/ or services, such as Story NY’s curated and discover-led concept, inspired by product and brand storytelling which have been major tools for them to play to the strengths that in-person experiences can offer.

As for flagship stores specifically, they will continue to succeed as brand awareness hubs that centre around inspiration and aspiration, stepping away from product-led spaces and focusing on forming authentic relationships with consumers; whether by catering to their lifestyle interests or by incorporating relevant and entertaining in-store initiatives etc.

The pandemic has reinforced the fact that physical stores should no longer be considered the final destination in the purchase journey. Combining the strengths of both online and physical stores, orchestrating a holistic experience will make it possible to introduce a more compelling hybrid model that transforms the retail space into an experience centre similar to the ‘Live, Work , Play and Shop’ 12 storey complex that is Funan Mall.

 

CROSS CHANNEL EXPERIENCES

CROSS CHANNEL EXPERIENCES: OMNICHANNEL STRATEGY

82% of customers consult their phones on purchases they plan to make in store (Google, 2020), it is undeniable that retail today is led by a shopping journey that merges online and offline touchpoints. Moreover, according to Harvard Business Review, omnichannel customers spend 10% more online and 4% more in person than shoppers who use only a single channel. Connecting technologies and optimising omnichannel customer journeys are enabling retailers to combine aspects of the convenience of online shopping in-store (i.e. click and collect, RFID mirrors etc.), and the engaging, compelling environment of in-store shopping to e-commerce (i.e. Try before you buy, cosmetic virtual try-ons etc.)

It is all about a seamless omni-channel strategy and a network transformation that balances physical and digital, ultimately catering to the different needs and wants of consumers, also appealing to various human-senses (smell, touch, taste….) and above all, consumer expectations (convenience, real time updates etc). Salesforce’s research shows that 70% of customers say connected processes — such as seamless handoffs or contextualised engagement based on earlier interactions — are very important to winning their business.

The shift to cross-channel experiences will largely be driven by the data captured online, and brands will recognise how a physical presence can improve the exposure and loyalty. As we can see with the likes of Amazon 4 Star stores, e-bay’s UK pop-up store hosting its small local business sellers or the concept behind The Trending Store, the blend of channels by using the best of both is going to pave the way for what to expect from the future of retail. Furthermore, with the ambition of bringing the store to the customer, livestreaming has great potential to take centre stage in 2021. Within the retail landscape, livestreaming will act as the “product reviewer and presenter” while boosting the potential of “social and immediate selling” as well. We expect physical stores to be innovative retail spaces in some shape or form. For instance, in China where livestream retail is at the forefront, these traditional spaces during the pandemic were re-established as video-led sales areas, turning staff into KOL’s to sell the in-store product online. Seeking out the opportunities where offline and online can support each other are key to the growth and network strategy of retailers, finding the right balance will become fundamental to the success of future retail sales strategies and brand experiences.

TAILORED JOURNEYS-05

TAILORED JOURNEYS: PERSONALISATION AT SCALE

Personalisation will continue to prevail, and the growing accessibility of artificial intelligence, machine learning, and big-data processing tools will only drive this trend further.

Traditionally customers expected to receive individual attention mainly when shopping at high-end stores, with personalisation offerings across their experience and their high-value purchases. However, technology has enabled personalisation making it accessible to more consumers. The understanding of user data is allowing this to be carried out at scale across a growing range of products and services.

Between market disruptions and easily imitable traditional pricing strategies, it is hard to stand out, this is where personalisation has an important role to play; retailers will need to take it on to survive and when done well it will allow them to thrive. Whilst scaling personalisation and gaining consumer insights are not without their challenges, it will be what allows a sustainable competitive advantage. We’re even noticing established e-commerces more than ever pursuing customer retention strategies that are based on personalisation approaches.

One of the game changers is sport giant Nike, tackling personalisation this with great success, through apps such as SNKRS, a personalized shopping experience, which led to users’ average spend nearly triple what Nike.com shoppers do. In addition to their app ecosystem, Nike has excelled in uniting the channels between its retail spaces and the different app capabilities to enhance the store experience.  “What’s important from a Nike shopping experience is that with machine learning and AI, we’re able to have every digital experience at Nike be unique and personal. My wish for you one day is to feel that you have your very own personal store curated for you on our app experiences.” says Heidi O’Neill, Nike D2C President.

Similarly, there is the Starbucks loyalty app, which at first appealed because of the convenience it offered. However, the subsequent data gathered allowed for more personalisation, allowing it to suggest relevant beverages based on the individual preferences of their users – becoming a ‘must have’ app. Another great example that takes gathering data on the spot to then personalise the offer is Graze, which asks its customers to share their preferences and allergies and receive a regular subscription box full of curated snacks. A less seamless approach but a great way to begin capturing data, after all personalisation is a priority with 83% of consumers willing to share their data to get it (Accenture Pulse Check).

 

RETAIL 2021 trends blog-07

MINDFUL RETAIL: CONSCIOUS CONSUMPTION & ACCOUNTABILITY

A shift to more “sustainable and mindful consumption” is most certainly on the rise. Consumers are more mindful of what they’re buying, shopping more consciously and buying more sustainable options. Consumers are becoming aware of the impact of global supply chains and their purchase power – consequently, they are demanding greater transparency and holding themselves accountable for who they financially support, with 57% of consumers saying they will be more likely to spend money at a business that offers locally produced products (Deloitte, 2020).

In 2021, brands who have and act with ethical, sustainable and socially conscious values will gain greater customer attention and retention, with 80% of customers being more loyal to companies with good ethics (Salesforce, 2019).

We will see both independent and big brands emerge with innovative concepts and campaigns centred on these issues. Leading the way is H&M, in addition to its pre-existing ‘Conscious product line’, it has revealed a new strategy with the launch of a first-of-its-kind sustainable-focused retail experience at one of the London stores, Hammersmith. With the objective of elevating the customer experience and strengthening the H&M brand for its shoppers, alongside the usual categories, the retailer offers a range of new services including a Repair & Remake service allowing H&M Club customers to have their H&M garments mended free of charge, it has also progressed with online tips via H&M take care.

Whilst many brands have committed to reduce plastic and packaging, LUSH has been even bolder with completely plastic-free packaging and naming themselves as ‘Naked Products’ thus making it a core pillar of their brand ethos. Focusing on a social need is Selfridges pop-up coffee shop collaboration with New Ground, an ethics-driven brand who hire ex-offenders in the hopes of giving them a little stability. In addition to this, the beans are all sustainably grown, and everything’s served in recyclable cups, with any recycled in-store are turned into Selfridges shopping bags.

As we can see, this changing mindset towards value-based consumerism will become game-changing and it will put more pressure on brands who have yet to tackle these issues.

 


WANT TO KNOW MORE ABOUT RETAIL TRENDS, AND HOW THAT MIGHT AFFECT YOUR BRAND? 

Get in touch.

 

Subscribe To Our Newsletter

Join our mailing list to receive our latest news, including our trends reports, insight articles and invitations to our webinars.

Thank you for signing up to our newsletter! 

We look forward to inviting your to our webinars and send you our latest news and trend reports.