2020 was a game-changing year for retail. Practically overnight, the pandemic forced the growth of eCommerce forward ten years. So when it comes to the retail trends of 2021, it’s no surprise retail experts think they’ll be focused on coming to grips with the changes that have been made.
1. Contactless payments become the standard
Consumers have a heightened awareness of hygiene practices now. As a result, contactless payments have gained popularity and are expected to become the standard in payment in 2021.
There are a few methods that experts suggest merchants start making sure they can accept.
- RFID credit card payments are probably the most common contactless method. Allan Borch, Founder of DotcomDollar.com, pointed out that the New York City subway recently “enabled riders to just basically tap their contactless card at any participating tap-and-go at subway stations.”
- Scan QR codes. If you start accepting QR codes, Tal Shelef, co-Founder of CondoWizard, advises that you place a sign on the counter and email your customers.
- Biometric fingerprint technology allows users to make touchless payments via a personal fingerprint stored on a credit card. Rachel Gerli from retail consulting firm Right Hand Brands, says, “The global demand for biometric technology in the payments industry is robust and will accelerate during the busy end of year shopping season and as business returns to a new normal in 2021.”
2. Increased innovation in delivery methods
Before the pandemic, consumers enjoyed the convenience offered by some innovative delivery methods. Brad Christian, Global Chief Customer Officer at Conversity, said: “Think of the success of Deliveroo, Uber Eats, and supermarket delivery services. The arrival of Covid-19 and the fact that we’ve spent a lot more time at home has accelerated this trend.”
Experts predict that a few different delivery trends will pick up steam in 2021:
- More companies will invest in sustainable delivery options, says Julia Henry, Post-Purchase Manager at parcelLab. “While some brands are already offsetting the carbon footprint of their shipping, this can extend into other offering alternative delivery carrier options, such as bicycle delivery for packages. Think DoorDash delivery, but for purchases like apparel, jewelry, and other items.”
- Curbside pick-up is set to become a standard, turning storefronts into fulfillment centers. Customers’ opting for this method has doubled year-over-year in 2020. But beyond hygiene concerns, Rachel Gerli adds, “Curbside delivery is beloved particularly by parents, who cringe at the thought of getting all the kids out of the car and then back in, to pick up one item at a store.”
- In addition to curbside pickup, Lisa Woodruff, vice president and global head of retail at Turner & Townsend, suggests that “package lockers that can be opened via a QR code will likely remain a permanent feature in suburban retail areas.”
3. Text marketing is the new email marketing
2019 and 2020 saw retailers exploring using text messaging in addition to their email marketing. 2021 is likely to see SMS messaging supersede email messaging as retail’s gold standard for messaging channels.
Texts have a 98 percent open rate and a conversion rate of 45 percent. By comparison, only 22 percent of B2C emails are opened and read. Kiehl’s actually found that 73 percent of consumers who signed up for text messages purchased a product within 6 months.
Cliff Holsenbeck, Senior Director of Product Management at iconectiv, suggests that retailers who wish to utilize SMS messaging should “choose 5-and 6-digit numbers that map to their brand name. (For example, Target uses 827438, which spells “TARGET.”) Customers can send a text message to the short code to get information, make a purchase, and more.”
4. Influencer marketing will get a new approach
Consumers have become distrustful of many large influencers and classic influencer marketing tactics. Eric Jones, CEO of Couture Candy, says that his brand has seen a shift towards “a raw, real aesthetic. Nowadays audiences put more trust in brands that showcase authentic voices and it will continue in 2021.”
Here are some tips for retailers looking to run influencer marketing campaigns in 2021:
- Work with micro-influencers. The veil has been pulled back on large influencers’ drive to make money, but micro-influencers still hold a lot of sway with their audiences.
- Try having influencers make you short product demo videos. Andrei Vasilescu, CEO of DontPayFull, says that “since trying products isn’t possible for an online audience, authentic hands-on demo videos will be greatly appreciated by your target audience.”
5. The DTC boom will accelerate
With the rise of hosted eCommerce platforms, direct-to-consumer (DTC) brands have become more common. When COVID-19 shut storefronts, even heritage brands scrambled to diversify their sales channels. On the whole, they began prioritizing their previously ignored DTC eCommerce sites.
In 2021, every brand will be DTC, even if they sell in other retailers.
Social media shopping will become key to promoting DTC brands as they expand their shopping features in 2021. Brands will be able to treat their social media accounts like storefronts, selling directly to their engaged audience.
With the rise in DTC, Julia Henry cautions brands that “more direct interactions with their customers also means more opportunities to disappoint them, especially the most loyal buyers.”
Merchants invest more heavily in customer experience and retention strategies rather than customer acquisition strategies to avoid that possibility.
6. Innovation in the physical space
As brands diversify their sales channels in recognition that physical spaces are not always guaranteed to be open, they will begin re-evaluating what their brick-and-mortar spaces should like.
Shared spaces and partnerships will likely become the new norm. Lisa Woodruff says that “sharing spaces reduces costs and accommodates the new ways of customer interaction.” Shared spaces also enable merchants to capitalize on foot traffic where it already exists. “Look out for more specialty brands shop-in-shops at stores like Walmart,” says Rachel Gerli.
Additionally, the lasting effects of health-awareness combined with the boost in eCommerce will likely drive showrooming into the mainstream. And as brands turn to showrooming, Woodruff predicts that “urban centers as a whole will be giving more consideration to creating ‘experience centers’ that provide more space and better customer circulation. These spaces leverage technology and promote brand culture better than traditional set-ups.”
7. Mass adoption of personalization technology
Retail tech has been trending towards personalizing the customer experience for quite a few years, and 2021 is finally going to see mainstream adoption of such technology.
One tech service we’re likely to see a lot of is customer video calls, says Tal Shelef. “For selling more complicated stuff like cars and electronics, online consultation is a great way to connect with customers and explain product specs more comprehensively.” Because these kinds of purchases usually take more decision-making time, staff assistance through video call is an easy way to make the process less intimidating for the consumer as well as highly personalized.
Retailers in 2021 will also be adopting some more futuristic technology. Allan Borch says that artificial intelligence and virtual reality technologies are set to come to the forefront due to the leap forward in eCommerce. Neel Vithlani, Orderhive Marketing Executive, even thinks that brands will begin launching products virtually in 2021 because “firstly, it is an economical alternative to the pre-pandemic method, and secondly, it gives a chance to reach out to more customers.
Onward to 2021
As you’re mapping out your retail strategy for the coming year, keep these seven retail trends for 2021 in mind. The world changed in a big way in 2020, and 2021 is going to be all about figuring out how to deal with that change.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.