Every sports locker room and high school coach has uttered the cliché, “when the going gets tough, the tough get going.” But this old adage has never felt truer than this year.
We all toughened up this year. We learned resiliency together, even while apart. We grieved for the loss of family members, for special occasions spent together, and for the loss of normalcy.
More than any other year, retailers stood out in the collective consciousness as the world grasped just how central a visit to Target has become in daily routines.
This year, retailers stood on the frontlines of keeping the world safe, fed, and sane. To all those in the industry, thank you. You got us through.
And as retail workers and brands adapted in real-time to changing global conditions, trends like e-commerce and curbside pickup became forever cemented as “ways to do retail.” Here we look at four trends that make us excited and hopeful for the future of retail.
Trend 1 – Retail is NOT Dead, Just Adapting
We’re not worried about the so-called “death” of retail. Why? People love to shop. This year brought many changes but people still are spending. Q3 saw consumer spending increase by 46.9% as confidence in the economy rebounds.
Online shopping was increasing prior to 2020. This year just accelerated the trend. This shift is natural and expected. People love convenience so e-commerce will continue to increase. People will keep doing their research online and comparing products and prices before going into a store.
Retailers that adapt to this will continue to thrive, long into the future. Just look at Target’s performance this year. Nearly every sales category increased and their same-day services exploded. Shipt grew 280% and Drive Up increased by more than 500%.
But just because more people turn to their phones before entering a store, doesn’t mean that in-store shopping will ever fully disappear. We might be spending more time on our phones or do our research more thoroughly beforehand, but if 2020 showed us anything, it’s that people will always want to gather in person. There’s something about walking in between the gleaming shelves at Target that make us feel like we’re kids in a candy shop. And this year proved to even the non-shoppers, how cathartic and enjoyable that in-store experience can be.
Trend 2 – In-Store Experiences
This year was the year of home delivery and curbside pickup. And those two options are here to stay. Why? Convenience. But that doesn’t mean that in-store shopping will go the way of the dinosaurs. Quite the opposite. Who doesn’t miss strolling between the sparkling shelves of Target? Your cart, mysteriously overflowing even though you went in for one spatula.
Prudent retailers are expanding how they service their customers. But the in-person shopping experience will never go away. In fact, even 73% of Gen-Z, the most digital-friendly generation, prefers to discover new products by shopping in stores.
That doesn’t mean that retailers will be able to coast and rely on the same old tactics that worked in the early 2000s. The future of in-store shopping will be all about the customer experience.
We expect endcaps and signage to be increasingly important to the in-store experience. Some even going so far as to install temporary pop-up stores.
Not every retailer that will be successful has to focus on over-the-top “surprise and delight” experiences. Just as effective is focusing on the basics. Great customer service, easy-to-navigate store layouts, and friendly return policies.
Expect an increase in focus on executing endcaps and displays, needing top-notch retail planogram maintenance, and embracing in-store signage, including Instant Redeemable Coupons (IRCs) to attract buyers.
Trend 3 – What We Buy
One of the most fascinating phenomena this year was watching how consumer dollars shifted. In years past, we spent on cosmetics and items that help us socialize. This year? Lots of coffee, hygiene products, and comfort foods.
Though how we shop and what we buy may change, the reasons we buy stay the same. We still want to buy gifts for our loved ones, groceries because we need to eat, and home improvement projects because it’s nice to love where you live.
While we sure hope we’ll be less dependent on junk food next year, expect the retail data lovers to continue crunching numbers that look at what we spend and more importantly, why. This data will feed into supply chains, staffing decisions, marketing campaigns, and more. We’re just at the start of the data revolution and we expect the trend of more personalization and more real-time adaptation to continue.
As for what consumers will buy post-pandemic, only time will tell for sure. But staying ahead of trends and keeping a pulse on what consumers value is sure to be a winning strategy.
Trend 4 – The Magic Is in the Back-End Operations
The reason Disneyworld is so magical is there’s an elaborate network of tunnels, zigzagging beneath the streets. Their operations are fine-tuned so guests only experience a seamless experience that makes even adults feel like they’ve been transported to Neverland.
The same is true for retail. Without backend operational activities like setting displays, taking inventory, and re-stocking shelves would be empty, items mis-stocked, and the retailer and brand alike would miss out on sales.
2020 cemented the importance of tightly run operations. Retail workers shifted their focus to essential items, like toilet paper and hand sanitizer (thank you!), as well as to fulfilling online and curbside pickup orders. This dance of balancing fully stocked shelves with growing pickup orders is already rearranging staffing and retail technologies.
Retailers and brands can stay ahead, even as their operations transform, by embracing technologies like RFID to better track inventory and partnering with retail merchandisers, like RMS. to improve store presentation. Like expecting to be transformed by the magic of Disney, shoppers expect a great shopping experience when they take the time to visit a physical location.
The effects of COVID-19 will stretch long into the future and consumer behaviors like online shopping. Building key partnerships, embracing data, and staying on top of buyer trends are key to thriving in the years to come. So, while we hope that we never have to have another year like 2020, we celebrate the people who got us through it and will continue shaping the future of retail.
Curious to see how we can transform your brand’s performance at a retailer like Target? Book a consultation today to chat with one of our experts.