Omnichannel

3 retail trends that will set the stage in 2021

Ignatius K.C. Lau, vice chairman and CEO at SML Group, offers up the top three trends retailers should be aware of and why they need to remain agile and embrace innovation to meet the demands of consumers in the future.

Photo by istock.com

February 12, 2021 by Ignatius K.C. Lau

2020 was one of the most tremulous years in history and many industries faced challenges that required companies to quickly adapt in ways they never imagined or planned for. The effects of the global pandemic on retail in particular accelerated industry changes that had been evolving around customer expectations and operational efficiencies, and retailers and brand owners will continue to grapple with disruption to the supply chain, poor inventory accuracy, and consumer demands as we move further into the New Year.

With additional waves of COVID-19 looming, a global vaccine rollout underway, and the "new normal" still out of grasp — it will be important for brand owners to stay abreast of the top three trends that will affect their businesses and customer bases in both the near and longer term.

Understanding the new consumer

The dramatic shift toward e-commerce has undoubtedly altered consumer behaviors in the past several years alone, but the impact of COVID-19 lockdowns, travel restrictions, and social distancing norms has propelled an even greater systemic change to the future of where, how, and what people buy. The convenience of click and ship with zero health risks will continue to drive people to shop online, and for those that do leverage a storefront Buy-Online-Pickup-in-Store and curbside pickup will be the preferred method for many.

Enticing consumers to return to in-store shopping will be challenging, and unpredictable store operating hours and traffic in the first half of 2021 will make it more difficult for retailers without proper planning procedures in place and inventory management technology like Item-level RFID and the improved inventory visibility it can provide. In turn, retail real estate will need to further adapt to these changes, and brands will need to reevaluate physical footprints — building up e-commerce strategies where possible, the technology they're using, inventory availability, and ultimately competitive price points that will keep customers coming back.

With fewer formal or social events, combined with less discretionary income and more fears surrounding the unknown — frivolous and luxury spending will likely continue to shrink as well, and consumers will predominantly focus on purchasing essential items, including more casual attire, for at least the duration of the pandemic. As part of this, brand loyalty will also diminish.

Gone are the days of brand-envy and younger generations are no longer paying to have the hottest retail items as they once did. Instead, some prefer second-hand clothing stores and if they do make a new purchase, they're more likely to shop around for a brand that fits their individual values. For retailers, this means engaging and memorable experiences will be that much more important this year and in the years to come.

Personalizing experiences and aligning with values

As consumer needs continue to shift — and with abundant options at consumers fingertips, brands need to start rebuilding that loyalty by reinforcing two major influences: consumer trust and confidence.

They can accomplish this in a few different ways, including through technology. RFID for instance allows brands to enable real time inventory at 98%+ and collect data on consumer shopping behaviors (including via smart fitting room solutions) that can help improve the overall shopping experiences. Additionally, QR code offers a way for consumers to learn more about the actual journey of their product, including sourcing and sustainability - which are increasingly important for eco-conscious consumers today. Both options allow brands to improve the foundation of their sales: trust.

In order to drive these engaging and memorable moments, immersion and personalization will be key. While in-store shopping may still be limited this year, brand owners can still accomplish this through their website, promotions, and products – down to the very label and tag used — helping consumers to feel unique and individualized. One way brands can do this is by embracing their personalities, giving them the ability to customize products. Just look at successful company examples like Coca Cola and Kleenex that offer personalized products or garment brands like Vans that have plug and play options for creative clothing items that consumers love and increase their brand loyalty.

Today's shoppers, especially the younger generations, are also increasingly aware of Corporate Social Responsibilities and companies that align with their own values. Fast fashion is declining and quality over quantity is the priority — meaning that brands that are transparent around ethically sourced and sustainable materials, fair factory production conditions, and socially inclusive and responsible efforts will fair that much better with eco-conscious consumers.

Embracing digitization and technology

Between increasingly remote workforces, the challenges within the supply chain and logistics, and growing demand for more virtual and touchless experiences, digitization and technology will continue to permeate the entire retail cycle as we move further into 2021 and beyond.

This includes everything from 3D and AR technology that will eliminate the need for physical samples within the garment industry and can offer up high-quality previews, to RFID technology that collect better data, drive supply chain efficiency and increase visibility.

As the retail space continues to evolve and adapt to new challenges, brands need to consider these trends and develop new strategies that address them in order to stay relevant in one of the most competitive landscapes to date.

The global pandemic has certainly made its mark on the industry and changed how brands of every size approach operations — but those who remain agile and embrace innovation now will be that much better positioned to meet the demands of consumers in the future.

Ignatius K.C. Lau is vice chairman and CEO at SML Group

About Ignatius K.C. Lau

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