Top retail industry predictions for 2021
A focus on smaller local stores, more acquisitions of retail companies by non-traditional buyers and an increased focus on wellness are among the top industry predictions for the coming year.
That’s according to Berns Communications’ Retail Influencer Network, whose members were asked for their insights on where the industry is headed as global vaccination efforts accelerate and retail and related sectors regain their footing. (The Retail Influencer Network is a carefully selected group of senior business leaders and influential investors and analysts.)
According to the experts, here’s what to expect in the coming year.
A return to brick-and-mortar shopping, but with a focus on smaller local stores:
• Retailers will continue to focus on localized assortments and smaller-footprint stores, while creating microfulfillment centers in cities and malls to meet online shoppers’ delivery and pickup demands, said Sandra Campos, CEO of Project Verte, former CEO of Diane von Furstenberg and founder of Fashion Launchpad.
• More consumers will choose to shop from local small businesses, which will strengthen their omnichannel offerings by adopting technologies that bigger retailers have relied on, said Retail Minded founder Nicole Reyhle.
• We’ll see more livestreaming from stores in 2021 as retailers look to engage more deeply with customers and offer new personal shopping experiences, predicted Maxine Clark, founder and former CEO of Build-A-Bear Workshop.
• There will be an all-out battle for foot traffic once shelter-in-place orders are lifted, predicted the founder and CEO of Trove, Andy Ruben. Retailers and brands will be judged by the early traffic and sales numbers they generate at that point, similar to how Black Friday results are seen as a gauge of holiday success.
But it will take more than discounts on the same old products to drive traffic, so brands should consider special incentives, such as offering gift cards in exchange for resale trade-ins, to lure consumers back into stores, he says.
• Nontraditional buyers will swoop in to buy the assets of brick-and-mortar retailers that can’t wait out the recovery, said Peter Fader, professor of marketing at the University of Pennsylvania’s Wharton School. We’ll see more mall operators, e-commerce and tech firms, and even some health-tech and fintech firms expand their brand portfolios through acquisitions that provide additional distribution channels and more points of contact with consumers.
A shift in consumers’ values:
• Wellness will be considered a necessity, not a luxury, according to Mindy Grossman, CEO of WW. The pandemic has prompted consumers to rethink how they live, how they work, what they value and what they want in their life, she says. They’ve turned their attention to health and well-being and will look to shop from trusted brands that marry technology with meaning to help them live better, more connected lives.
• Employees will still want to work remotely, predicted Greg Petro, CEO of First Insight. They’ll likely want to dress up and return to the office on occasion, but after sitting in traffic and being late for the morning meeting a few days in a row, they’ll be asking to work from home again forever, he says.
Mobile apps, new fulfillment options and “MTC” will be hallmarks of e-commerce
• Curbside pickup and ship-from-store fulfillment will exceed orders fulfilled from warehouses in major metropolitan areas as brands create more smaller-format fulfillment centers, said Nitin Mangtani, founder and CEO of PredictSpring.
• More brand manufacturers will sell directly to consumers as the “MTC” trend gains traction, said Sucharita Kodali, principal analyst at Forrester Research.
Travel and Entertainment will be winners in the second half
• The latter half of the year will look like the post-Prohibition era, with consumers who were able to financially weather the pandemic celebrating the vaccine rollout by booking over-the-top trips and stays at incredible hotels, said Lucy Lieberman, CMO of Tablet Hotels.
• Millennials and Gen Zers will be especially eager to travel again in 2021 and pent-up demand for travel is at an all-time high, said Nancy Berger, Publishing Director for Cosmopolitan, Women’s Health and Seventeen.
• Consumers will spend heavily on parties and travel, boosting sales of dress apparel as spending shifts away from categories like home goods and backyard accessories, predicted William Susman, managing director at Threadstone Advisors.
• The pandemic-fueled eat-at-home trend will create a permanent headwind for restaurants and a tailwind for grocers, according to Rachel Elias Wein, founder and CEO of WeinPlus. The money consumers save by not dining out will sustain increased discretionary stay-at-home spending through the second quarter, shifting to travel and entertainment in the third quarter, she says.
The rise of Gen Z:
• Gen Zers will emerge as the “winners” in the post-COVID-19 world, said Keval Desai, general partner at InterWest Partners. These digital and social media natives, who account for 30% of the world’s population, will have been largely untouched by the health impacts of the pandemic, while benefitting from the acceleration of all the trends that are reimagining retail into what they have always wanted it to be.