From ‘calm commerce’ to the dash from cash, we ask the experts to share their insights
Although 2020 was turbulent for retailers and small business owners – to put it mildly – experts are cautiously optimistic about this year’s outlook.
In many cases, analysts argue that the pandemic simply accelerated changes – such as the cashless economy and e-commerce – that were already underway. “Indeed, many fashion companies have taken time during the crisis to reshape their business models, streamline their operations, and sharpen their customer propositions,” McKinsey says in its State of Fashion 2021 report.
So, which are the top trends you need to know?
Calm commerce
“Consumers don’t want to linger in stressful retail spaces for extended periods of time,” says Charlie Clark, trend expert for WGSN. “People don’t want the retail experience to add to their sense of being overwhelmed, but rather to make their lives easier, and in some cases to provide a sense of calm, sanctuary and escape.
“So, it will be important to make their shopping experience simpler and more convenient. That could be through introducing products that actually make their lives easier, bundling products together or by making the whole experience much more streamlined and calming.”
Part of this reluctance to linger and browse is due, of course, to the effect of the pandemic on our psyche, says Paul Zahra, CEO of the Australian Retailers Association. “Customers are shopping with purpose and a focused set of purchases in mind,” he says. “Hygiene practices are now part of operating a business in the new COVID world, and retailers are ensuring all in-store traffic and high-touchpoint areas are appropriately managed. These safety practices and changes in the consumer’s mindset are going to continue.”
Localized and community-led retail
Supply-chain disruption overseas – plus the fact that many of us have been spending much more time in our neighborhoods and communities – means that shopping locally has become more important to consumers. According to Accenture, 56 percent of consumers are shopping in neighborhood stores or buying more locally sourced products – and 84 percent plan to continue buying locally sourced.
“Consumers increasingly want to spend with brands and businesses that are creating tangible, positive impact on the places that they live.”
“Consumers increasingly want to spend with brands and businesses that are creating a tangible, positive impact on the places that they live,” says Clark. “Isolation has been a key challenge for many, so it’s also important to build strategies that allow them to feel more connected to each other through community.”
Contactless digital shopping
According to ShipMatrix, more than 3 billion packages were shipped between Thanksgiving and Christmas 2020 in the U.S., fueled by 49 percent year-over-year growth in online shopping – making a successful omnichannel strategy key.
Retailers also need to consider click-and-collect options, says Zahra. “Retailers in the essentials category such as supermarkets and hardware stores have been offering ‘click and collect’ options for some time, but that’s now evolved during COVID to ‘direct to trunk’ services where shoppers don’t have to leave their cars to pick up their items.”
Other delivery services, such as Hubbed, have also seen demand soar.
The shift from cash
The dash from cash is an example of a trend that started pre-COVID and accelerated in the past year. Fewer adults are using cash, with 29 percent of Americans saying they don’t use cash to make everyday purchases, and 47 percent prefer digital payment options.
“Retailers need to embrace the cashless future,” says Zahra. “Businesses were actively encouraging customers to use electronic payments to slow the spread of the virus through physical contact, while some refused to accept cash at all.”
Buy now, pay later (BNPL) technology – like Afterpay – is also growing. “According to ASIC,” says Zahra, “the number of BNPL transactions increased from 16.8 million in 2017-18 to 32 million in 2018-19 – an increase of 90 percent,” he adds. “There’s no doubt these payment options are here to stay. They’re proving incredibly popular as an easier and more attractive way to pay for goods and services.”
Social justice and sustainability
Yes, sustainability is every forecaster’s go-to trend, but brands’ social credentials have become even more important post-pandemic, as the global emergency prompts consumers to reconsider their own values and priorities.
“There has been a shift toward buying from businesses that align with our values and stand for causes we believe in,” says Clark.
Not only does that mean treating everyone in the supply chain with fairness and respect, says Clark, but it also requires a move away from the cycle of constant stock replenishment and heavy discounting.
“COVID-19 highlighted the need for a shift in the profitability mindset,” says the Business of Fashion/McKinsey State of Fashion report. Among its recommendations, the report suggests that businesses reduce their inventory by taking a demand-focused approach.
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