In Focus
RESEARCH | Staff Reporter, UK

Five retail trends to watch in 2021

IGD predicts the movements expected to shape global retail this year.

Driving online profitability, creating safe shopping spaces, and bringing the out-of-home experience in-home are among the key trends standing out as areas for businesses to focus on this year, according to new predictions from IGD.

System upgrade: digitally enhancing operations
IGD expects the introduction of digital technologies that have a low capital investment and are easy to update, partnerships with third-party technology providers to speed up new tech introduction and more use of machine learning and artificial intelligence at store level to drive revenue and increase customer satisfaction.

“The pandemic has accelerated retailers and shoppers’ digital awareness and capabilities. Numerous companies have been testing and learning from new digital initiatives, and in 2021 companies will need to move beyond this to improve and implement at scale. Digital transformation will require new leadership and a fresh cultural mindset as companies create flexible and agile ways of working," IGD innovation and futures head Toby Pickard said.

Escalating ecommerce: driving online and profitability
The insights agency also expects retailers seeking to reduce their overall operating costs to accommodate online, improving processes and automation, encouraging shoppers towards click and collect and retailers assessing the options for rapid delivery, for example the same day or in a few hours.

“With many shoppers using the channel for their large weekly shop, we have seen retailers focus on enhancing the pickup, or click and collect, experience to help improve profitability. This has included adding more collection slots, expanding order staging areas and parking bays and ensuring a contactless experience. While the initial surge is receding, online penetration is expected to remain at a higher level, compared to pre-crisis," Pickard explained.

Creating inspiration and excitement
Retailers, Pickard said, will also be creating "inspiring" meal solutions for all occasions and seeking to capture shopper spend that was previously taking place out of home.

"By highlighting both value, ease of preparation and cooking along with inspiration, retailers have a real opportunity to capture shopper spend that was previously taking place out-of-home," he said.

Supporting health and wellness
There will also be greater focus from shoppers on hygiene and sanitation products for individuals and the home, retailers and brands trying to differentiate themselves by helping shoppers and consumers live healthier lives and more tailored solutions in-store, either through assistants or using digital tools like apps.

“We will see more retailers educating, informing and rewarding shoppers for living healthier lives. Companies will look to champion both their health and sustainability credentials, as the two key trends merge, of their existing and new products. Personal health will increase in importance, but ultimately affordability may take precedence during economic downturns," Pickard added.

Recuperative retail: focusing on sustainability
Sustainability will remain an imporant trend, IGD said. With climate change remaining a top priority, they expect retailers globally to push ahead with initiatives to support goals in this area, aontinued implementation globally of initiatives to reduce plastic and food waste; along with initiatives to build trust, loyalty and better relationships with shoppers, staff and communities.

“Climate change will remain a top priority in 2021, as it is recognised as the most likely source of major future disruption. While there will be much focus on how sustainability supports the climate change and resilience agendas, we will also see initiatives to build trust and loyalty with shoppers," Pickard said.

“When planning for 2021, companies should consider the two main variable factors from the pandemic: the potential path of the virus (from a relatively manageable virus to multiple outbreaks with lockdowns) and performance of the economy (from an economic performance that quickly recovers to a hard-hit economy slow to rebuild)," he concluded.

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