2021 Retail Predictions
Remember at the beginning of 2020 when you thought you had everything all planned out for the year, and then COVID-19 came and knocked all of your preparations off the table? That was not fun for anyone, and many businesses are still trying to recuperate and rebuild their models. We live in very unpredictable times, and with another possible lockdown in the forecast, retailers in 2021 will be figuring out whether they are in survival, adaptive, or growth mode — and their path forward.
Instead of taking a wild guess at what 2021 will bring us, Independent Retailer went straight to the source for the goods. Everything you need to know from ecommerce and buying online, pick-up in store (BOPIS) to social media and influencer trends is right here. So buckle up and take notes, because there is a lot retailers need to know to keep their business moving forward in the new year.
Brick-and-Mortar is Still Alive
COVID-19 may be changing ecommerce operations forever. Consumers who traditionally shopped in stores are now purchasing online, and this disruption is so widespread that ecommerce sales are expected to rise even after the pandemic subsides. 2021 also promises to be a profitable year for digitally native merchants. Several key business and technology trends are emerging or have already taken shape and it is wise to consider them as 2020 ends.
“I do believe that brick-and-mortar will come back a little bit, but in general, ecommerce has been gaining share for over a decade and the pandemic has just accelerated that trend,” Chris Bell, CEO and Founder of Perch, said. “There will be a small pullback in ecommerce in 2021 as consumers go back to stores, but most of the shift to online will continue to grow as we have all gotten used to this mode of shopping.”
Retailers Will Need to Rely on Their Own Data
“Even when retailers are trying to use consumer data to promote more relevant content and products, consumers have grown wary of how their identities and information get passed around the internet to help brands push their products,” Trevor Testwuide, CEO and co-founder at Measured, said. “As a result, government bodies and some companies themselves have implemented limitations on how third-party data can be shared and used. Retailers are going to need to rely a lot more on their own data to gauge what marketing and ad tactics are driving sales. In 2021, we’ll see more brands follow the leads of TechStyles, Drizly, Lulus and others who are using science-based experimentation to measure the performance of different marketing and ad channels.”
Beware of Online Fraud
“The 2020 holiday will see online sales surge continue and surpass all other years. Although this is excellent news for the merchant’s holiday online sales, with an increase in sales they will expect increased fraud and theft,” Pattie Dillon, anti-fraud network relationship manager at SpyCloud, said. “I’m afraid that in 2021, Account Takeovers (ATO) and shipping redirect fraud will result in a sharp spike of chargebacks and refund fraud. These losses erode profits and result in price increases passed along to the consumer. Unwitting customers who have fallen victim to ATO fraud will produce a negative customer experience and loss of confidence in the merchant’s security protocols will impact the customer from doing any future business with them. Monitoring is key to gain knowledge and respond to fraud losses for a more proactive response. The knowledge gained will prevent unauthorized customer account access and help combat fraud through the rest of the year.”
New Ways to Drive Organic Shopping Traffic
Sharon Gee, head of omnichannel partnerships at BigCommerce, says that in 2021, we will see more merchants get savvier about:
- Using social channels to not only reach customers, but also sell to them through Facebook Shops and Checkout on Instagram where merchants can easily list products, sync inventory and allow shoppers to discover products from tagged posts and checkout directly within Instagram. We will also see more of those social channels enable shopping and checkout directly through their apps.
- Getting the most out of organic search channels by taking advantage of new programs like Google Shopping offering free product listings to merchants to drive organic shopping traffic.
Social Commerce Will Play a Significant Role in 2021
“Shoppable Instagram posts, Snapchat VR, and ‘buy now’ Pinterest buttons have become well established during 2020 and will have a much larger impact next year as they continue to gain momentum,” Harry Thakkar, Partner at digital ecommerce firm Avatria, said. “Customers will be able to save their payment methods, shop brands they are already engaged with, and complete the transaction without leaving the app. This will effectively become another large channel that ecommerce retailers will need to consider when planning their marketing strategy.”
Technology Partnerships Will be Critical
Many ecommerce brands are in the thick of making business plans for 2021. When thinking about technology implementations, e-tailers need technologists and development partners that are going to provide products that will evolve their growing business.
“For brands who are creating ecommerce stores, it is critical that they have some kind of technology partnership so they understand what is out there and how they can streamline and anticipate the growing demand and needs for the business,” Jeremy Jackson, Principal and Founder of Shift Lab, said. “When looking for a technology partner, retailers need to effectively gauge what their business needs for software, launching a new system, what are the needs today and in the next few years. The complexities really lie in figuring out what customizations need to be made to fit the business’s needs.”
The Top 10 Technology Investments
A new study by Brightpeal, a digital operations platform, revealed in-depth research conducted with the leaders of 500 of the nation’s most influential retailers who have revealed what technologies will be at the forefront of retail strategies for the year ahead. The study found that 68 percent of retailers are planning to increase their technology investment over the next 12 months. Here are their top priorities:
- Web personalization (64%)
- Social media marketing (63%)
- Increased online payment options (62%)
- Inventory management software (62%)
- Barcode scanning technology (61%)
- Delivery tracking (59%)
- Buy Online, Pick Up In Store (58%)
- Order management software (57%)
- Returns management software (56%)
- Business intelligence and performance reporting (55%)
Make Your Brand Stand Out With its Packaging
There is so much competition across the retail industry, that the same products just all start to blend together. Ross Kimarovsky, CEO of Crowdspring, says that brands must try to tell stories through their product packaging in order to stand out.
“Driven by the pandemic, ultimately the world has changed significantly and we see three big macro trends in packaging designs. One is shifting buyer patterns, with some reports pointing out that in just the past 6-7 months, ecommerce has moved forward 5-6 years. The second major change we’re seeing is that health and safety is a primary for many consumers than it used to be, with people cleaning packages to stay safe. The third trend, driven by the pandemic and new generations of consumers, is sustainability. The use of plastic has increased, creating friction with a lot of consumers who are against using plastics.”
Attracting & Retaining Customers
“It really comes down to loyalty and becoming a trusted source,” Mike Rittler, Head of Retail Card Services at TD Bank, said. “Many retailers we work with, if you can develop a reputation with customers, they can turn to you and know they will get sound advice, fair prices, and a simple process to pay in the way they want to pay. The options for how to do that, especially with larger purchases, can bring that all together to become that trusted source for customers. Developing that reputation and trusted partner is really important.”
Utilizing Influencers Will be Crucial
“Influencers have established themselves as a vital touchpoint for brands this year by tapping into human connection. As we physically distance ourselves and rely on our virtual channels, influencers have the opportunity to fill that ‘connection void,’” said Cristy Garcia, Vice President of Marketing at Impact. “Now more than ever, consumers expect humanized touchpoints with brands, and influencers serve as an effective way to do so. They transcend the fourth wall from ‘seller of product’ to ‘friend making a recommendation.’ Whether macro or micro, global or regional, expect the continued rise of the influencer economy in 2021.”
According to Ryan Sauer, Director of Digital Marketing at PowerChord, influencers can be a great way to get your brand’s products exposed to an influencer’s audience, but you should make sure that the influencer’s audience has buying power. Meaning, if the product is a more expensive and higher consideration product than the majority of the influencer’s audience needs to fit the right demographic including household income. Otherwise, the brand’s products are getting a lot of exposure but not with potential buyers.
Email Is Still King for Consumers
“Back in March, we conducted a global study with eConsultancy on consumer behavior,” Richard Jones, CMO of Cheetah Digital, said. “Seventy-seven percent of U.S. respondents said they made a purchase because of an email they received, compared to 22% who purchased from a text message. We also found that email drove 180% more sales than display ads (online and in-app). Needless to say, email is still king for consumers.”
CUSTOMER EXPERIENCE TRENDS
Leverage Video Content to Connect With Your Customers
It is not easy to make personal connections with consumers while everyone is trying to be socially distant and more are shopping online. The pandemic has caused many retailers to shift their ways of thinking and get creative on making those personal connections.
“Lovesac, a furniture store that sells sectional sofas and other products, has physical stores they had to shut down during the pandemic, and part of a physical store was to give consumers the ability to experience the physical product,” Jim Dicso, CEO of SundaySky, said. “You need to leverage digital and modular video content to create a holistic message about using the product. It is much harder to try and communicate that in text or images. We think this idea of leveraging video content to create a physical and emotional connection is something that all brands will need to adopt in the future.”
Rise in Text as the Ultimate Customer Engagement Tool
“While SMS marketing is a great way to acquire new leads, text is also proving an incredible tool for engaging with customers and building loyalty,” Norman Happ, CEO of EZ Texting, said. “With less foot traffic, retailers can use texting to stay top-of-mind with promos and inventory updates. Yet businesses are also broadening the scope of their text comms, like providing pick-up or shipping updates and even streamlining their customer service through 1-on-1 Chat. The efficacy and scalability of text communications will allow retailers to continue to nurture customer relationships and engage with them even as face-to-face time has become limited.”
While the future still makes everyone feel a little uneasy, hopefully these 2021 tips and predictions from industry experts can help brands keep their business moving forward and going strong.