The Retail Forecast For 2021

    Promo and Ecology

    The ability to purchase as well as shopping mood have changed drastically in 2020. Coronacrisis more clearly demonstrated the need to care for the environment in general and the importance of health care in particular. Now people pay more attention to the preventative measures against diseases, i.e. the opportunity to contact others less, a healthy diet, the inclusion of products to boost immunity, and practices for mental health. Thus, online shopping in 2020 became almost the main type of consumer activity and will take this leading position in the future. If previously a customer was mostly brand-oriented, now the choice is among the retail chains and, as a result, competition in retail increased. Retailers have to focus on promo to attract the attention of the consumers to their products and constantly monitor changes in customer sentiment.

    From another hand, the more popular online shopping gets, the faster the delivery sphere develops. And if it’s good from the point of view of the increase in working places, it’s not always beneficial for ecology. According to the article in Waste360, over 95% of parcels sent to 200 million online customers in the US are sent in carton boxes, and it’s expected to be an even higher number, as online retail continues to grow.

    Coming back to a ‘brick and solution’

    “The COVID-19 recession is over, and the economy is currently in an early-cycle expansion,” said Sophia Koropeckyj, managing director of industry economics at Moody’s Analytics, a research firm based in West Chester, Pa.

    Regardless of the significant rise of income in the retail sector with wide coverage, many retailers had to close their shops within the last year. One of the reasons for such discrepancies is that during the pandemic the customers started buying only the minimum of products necessary for life. The second reason is that the goods are more often bought via digital channels. It’s a long-term tendency that is worsening because the pandemic makes us stay at home.

    According to the specialists’ forecast from Moody’s Analytics, the level of unemployment should decrease to 7.8% by the end of 2021. Retailers can consider a more favorable operation system in 2021, as step by step the economy will rebound from the Covid-19 pandemic consequences.

    “Many of the experiential elements of retail are becoming digital, while bricks and mortar evolves to serve some of the more functional aspects of shopping,” explains Alex Hawkins, senior foresight writer at consultancy The Future Laboratory.

    Not many retailers will survive the pandemic and get back to the game. That means that we will experience a decrease in the number of shops, but an increase in the quality of products and services. Successful shops will have to use emotions, human connections, and major discoveries. Usual retail is going to become an interactive, sensor experience, and retail sellers again have a chance to implement something new in physical space.

    Personalization of offers is one of the key future tendencies in retail. The mechanisms of personalization will become more complex by the end of 2021. The data that they will be using will improve the ability of different sellers to create consumers’ offers at the time of consideration.

    “In the old days, people visited local shopkeepers who knew them by name and could predict their needs based on what they wanted through a personal relationship,” says Riyadh Bhyat, head of Quantium in Europe, Middle East, and Africa.

    In 2020 some retailers recreate this experience at scale, using algorithms that account for hundreds of factors to create personalized offers and services for traders. The retailers predict the needs of the customers, reducing the time spent on finding the right product. For example, in the fashion industry, such an approach will help to choose clothes fast as they are going to fit the specific customer based on the scans of their body.

    Transit from ‘Design-Make-Sell’ to ‘Design-Sell-Make’

    2020 has been the year of mass chaos, but remember, with chaos comes opportunity. Clearly, 2021 will represent a great opportunity for those who embrace the change and look ahead to anticipate it. - Greg Petro

    As we have already said not all enterprises will manage to survive the coronavirus. Startups from generation Z come to replace them. These companies are already changing the approach of selling goods, and they will continue to move in this direction. If before a certain amount of goods was produced based on a previously set layout and only later these goods were sold, now the manufacturer firstly gets the order with all requirements, receives money for it, and only then starts its production. The consumers are ready to wait due to attractive prices and they can get exactly what they want, and the manufacturers are ready to take some steps to make their enterprises more profitable.

    We live in the world of the unknown. The world economy is led by the necessity to decrease the influence of the coronavirus. The weakening of the quarantine is accompanied by a sharp increase in consumer spending or economic activity, which means that retailers should pay attention to monitoring changes in consumer sentiment and their preferences.

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