We’ve collected 2021 retail predictions from industry experts.
With the COVID-19 pandemic affecting many different businesses, those in retail look forward to what the new year could bring.
Predictions have been made by such professionals as IPsoft’s Faisal Abbasi and Haysmacintyre’s Natasha Frangos.
The past year has been challenging for various different industries, with lockdowns and tiered restrictions slowing down business, stopping it entirely, or forcing operations to adapt to the ever-changing rules of the “new normal”.
The retail sector in particular has experienced significant disruption during this time, often in polarising ways – as supermarkets and online stores make headlines with their popularity, brick-and-mortar based operations have suffered significantly.
As we enter 2021, many within retail look forward to the new year, wondering what it will bring to their business, and the industry altogether.
So, what exactly will 2021 bring to retail? We’ve collected a list of industry expert predictions into what retail could expect during the course of this new year.
Our Panel of Experts:
- Faisal Abbasi – Managing Director at IPsoft
- Natasha Frangos – Head of Corporate at Haysmacintyre
- Jonathan Moradoff – Senior Director at David Coffer Lyons
- Zach Boyette – Co-founder and Managing Partner at Galactic Fed
- Andre Hordagoda – Co-founder and Co-CEO at Go Instore
- Tytus Gołas – Co-Founder at Tidio
For any questions, comments or features, please contact us directly.
Faisal Abbasi, Managing Director at IPsoft
“Critical to re-stimulating retail consumption post-pandemic will be in creating unique customer experiences and a seamless customer journey. Technology, particularly artificial intelligence (AI) in the form of intelligent automated services, will define the future of retail.”
“Delivered via phones, tablets, PCs or in-store kiosks, AI-powered assistants can analyse and determine the very best product for each customer – creating a totally personalised, yet automated shopping experience. They can offer up new product options, reveal pricing details and provide a personalised, near real-time update on when items will be available and ready to dispatch and deliver. This creates a simple, easy-to-use experience for the customer with a familiar form of technology and without the need for human-to-human contact.”
“AI also powers “just walk out” shopping – as trialled by both several large supermarkets in the last few years. This allows completely contact-free shopping, where consumers could walk into a store, grab the items they want and exit without stopping at a single check out to fully automate the payments process.”
“For online retailers, AI can be combined with machine learning to keep track of customer selections and preferences while keeping track of site visits. The technology can also make predictions about future purchases, paving the way for repeat buying and increased customer loyalty – something which all retailers will be striving for next year in the wake of COVID-19.”
“Pre-pandemic, the retail sector was already ripe for regeneration as the convenience and speed of online shopping outpaced innovation on the high street. The COVID-19 outbreak has since accelerated the monumental shift in shopping behaviour and a surge in online shopping channels. That said, the industry will bounce back, and with it we are likely to see new means of interacting and engaging with our favourite retailers, both online and in-store.”
Natasha Frangos, Head of Corporate at Haysmacintyre
“2021 has started in a way that we all hoped it wouldn’t – with the blow of another national lockdown hitting the UK high street. But despite a gloomy beginning and the likelihood of hard times ahead, there are glimmers of hope.”
“Lockdown 3.0 is in many ways similar to lockdown 1.0, but this time businesses are well prepared, having had a year to develop and implement strategies to endure the forced shop closures. Retailers’ online presence had already risen before the pandemic, but store closures has seen digital shopping become the norm, a trend we can expect to continue throughout 2021.”
“As part of this digital revolution, we should expect retailers to prioritise enhancing the digital experiences of consumers; one such way of doing this is through AI and Deepfake technologies to personalise online experiences and marketing strategies. And, once Covid restrictions permit, we could see this personalised approach transpire into greater momentum behind experiential retail, where physical stores become a destination for more than just browsing or purchasing products.”
“What’s more, with the rise of home working resulting in many people moving out of city centres, the location of stores will be brought into question. Perhaps we will start to see new shops opening up in more suburban and rural communities, where their consumers are now based.”
“Sustainable fashion is also here to stay. The pandemic has made everyone acutely aware of the climate crisis we are facing – and we are seeing brands addressing their consumers’ concerns, and focussing on developing the eco-credentials of their products. There is still some way to go, but with the consumer mindset shifting to purchase fewer items of higher quality, we could see demand for fast fashion start to decline. And, given the risk of some supply chain imports from overseas, both from the pandemic and Brexit, UK retailers may prefer to source products locally, cutting down emissions and reducing the risk of logistical issues further down the line.”
“UK retail has begun 2021 set against a backdrop that would have been unthinkable this time last year, but there are plenty of reasons to remain optimistic for the future as we begin to emerge from Covid-19.”
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Jonathan Moradoff, Senior Director at David Coffer Lyons
“My clients are based in the hospitality and leisure sector – restaurants, bars, clubs etc., so this past year has obviously been very eventful for us.”
“In general, it feels we’ve been left in the dark by the government. We’ve been the first ones hit with all the restrictions, and it’s been very challenging. We saw a lot of casualties in during the past year since March, there’s been so much restructuring recently just to try and let these big names survive and get through all of this.”
“There’s also definitely been a lot of change in market trends. Because so many people have been working from home, we’re seeing the suburbs have generally thrived a lot more as opposed to central London. So that’s been a very interesting change.”
“We’re seeing local restaurants where the larger chains have let go of their sites and local independents have snapped up these fully fitted units, and there’s been quite a strong demand for that. In addition to this, with Deliveroo and various other platforms, these locals have been able to deliver to the surrounding residents. So a lot of these areas have thrived in these challenging times, and that’s been quite nice and positive to hear.”
“On the flip side, the city has been a graveyard, just because there’s no one there, it’s been really tough. I’m not sure how that’s going to look on the other side yet, there is talk of offices wanting to downsize rather than leave the city entirely, so hopefully the city may come back again and thrive at some stage.”
“But at the moment it’s a huge challenge for operators to get through that. Central areas of London as well such as the West End have taken a real hit due to various factors, including no tourists and numerous lockdowns.”
“What will be interesting to see is how landlords and tenants get through this. We’ve been negotiating for both to try and find a happy medium and agree a way forward. I think that’s so important for landlords and tenants to be in discussion, and able to resolve disputes together. But when they’re not able to resolve that’s very difficult. We’ll just have to wait and see how things pan out.”
Zach Boyette, Cofounder and Managing Partner at Galactic Fed
“The biggest trend I predict in 2021, and would put my money towards, is the higher accuracy of in-store attribution. We’re moving closer every year towards accurately mapping a user’s journey from clicking an ad, all the way down to walking out of a store with a bag full of goods.”
“There’s big money in cracking this nut, and Google and Facebook have been competing to roll out more powerful solutions for physical attribution tracking. Longer-term, virtual reality is going to completely transform the way humans shop and interact with retailers. Brands need to stay on top of this trend, or they face the threat of becoming out of date or irrelevant.”
Andre Hordagoda, Co-founder and Co-CEO at Go Instore
“The pandemic and subsequent lockdowns meant that online channels were customers’ main if not only way of engaging with their favourite brands. People have become accustomed to shopping online and are expected to keep up their lockdown shopping habits even once restrictions are lifted. In fact, 44% of shoppers believe COVID-19 is likely to lead to long term changes in their shopping habits while 47% say they will shop more online in the future as a result of the pandemic.”
“As online shopping increases, digital transformation will be a priority for retail businesses in 2021 as they look to double down on investment and meet changing customer habits and needs. Websites can no longer be viewed as a threat to physical stores and retail staff, but a platform to boost sales as people continue to steer clear from the shops and instead buy online.”
“Retailers can’t afford to stagnate and expect the world to go back to normal. Instead, they should look to transform the physical footfall to digital. We are yet to find out what the return to normal will look like, but we do know that online shopping is here to stay, so the “new normal” will have to include enhanced on-line video shopping experience for retailers to remain competitive and it is critical to digitally transform before it’s too late.”
“Physical retail is transforming. The ‘connected’ Dark Store concept has grown over recent years and was accelerated by the pandemic. We can expect the number of Dark Store concepts to surge as we move into 2021.”
“Dark Stores are physical hubs dedicated entirely to online shopping which enables shop floor experts to connect with consumers. Some retailers will be using their Dark Stores to transform traditional shop fronts into fulfilment centres to support online shopping and send products out to customers quicker than they have been able to previously.”
“During the pandemic, Lush Oxford Street started delivering their products from online orders via foot or on bike. It worked so well with the High Street branch that they rolled it out across 45 other shops in the UK. The Dark Store combines the strengths of both online and physical stores to offer shoppers an optimal customer experience. One of our clients, Currys PC, operates a 24 hr ShopLive service which helps drive millions of pounds of incremental revenue.”
“With our clients who have set up Dark Stores, we are seeing the Average Order Value (AOV) increase around 200%. The addition of the live-video element of the Dark Store empowers shoppers to make complex and considered purchasing decisions and enhances the experience of shopping online. It also allows retailers to have their physical space in a cheaper location – it doesn’t have to be on an expensive high street as shoppers won’t be physically entering the space. Overall, cost saving on this model is pretty significant and we expect to see this becoming increasingly popular over the next 6 to 12 months.”
Personal Shopping at Scale
“Customers are increasingly looking for personalised experiences, regardless of the channel they are using to engage with a particular brand. 91% of consumers state they are more likely to shop with brands that provide offers and recommendations that are relevant to them. To add to this, 80% of shoppers are more likely to make a purchase from a retailer that offers personalised experiences. If retailers are unable to provide a personalised experience, shoppers will look to competitors who do.”
“Where purely algorithmic based product recommendation technology is widely used across retail websites, Retailers should look to collect and surface this customer preferences information and arm retail staff too. Empowering physical staff with historic data driven recommendations combined with their own intuition and expertise will facilitate tailored and personalised experiences that will enable them to meet customer expectations and thrive over the competition.”
New Ways to Shop
“This year, we have seen a record-breaking 6001 store closures between January and June. Lockdown accelerated an already growing move from physical shopping to new ways of engaging with brands. Customers now choose to shop online, via social channels and from retailers who enhance the shopping experience with Augmented Reality (AR) or live video.”
“For instance, over 600,000 visitors have used live video via the Curry’s PC World site to chat with tech experts on the best product for them. Technologies like live video have gone from a nice-to-have to an essential to provide an exceptional customer experience.”
“We can expect more customers to engage with technology-enhanced shopping experiences as they demand more from their interactions with brands. Experience is expected to overtake both price and product as a competitive advantage so, retailers should look to innovate their offering to keep up with new consumer shopping habits and prevent more brands disappearing from our high streets.”
Tytus Gołas, Co-Founder at Tidio
“In fact, I know personally of one brand named Broadley’s from the UK which existed on the market for 124 years and had to move fully online when COVID hit in 2020. They’ve decided to use technology such as AR and chatbots to re-created the in-store experience for their loyal customer base as much as it was possible.”
“Moreover, it seems like the AR fitting room apps will become a standard with customers trying on clothes in a virtual space.”