The retail industry has been rattled, to say the least, in the past 14 months. With the fears of the coronavirus slowly easing and consumers returning to the new normal, many retail changes are still inevitable. Going into 2021, over 15,500 stores were forced to either reduce store hours or close numerous locations to preserve their already low margins.
As more shoppers flocked to online shopping, retailers have had to rapidly adjust to meet the explosive growth in demand for curbside pickup. And the post-pandemic consumer is favoring brands that offer wide selections of products and ultra-fast (and cheap) shipping. With the retail landscape ever-evolving, here are four retail predictions for 2021.
Expect an increased number of bankruptcies and mergers.
It is estimated that $430 billion were lost in 2020 as a result of stock outages and store closures due to the pandemic. Though the retail industry hasn’t been as hard hit as many entertainment outlets like restaurants and movie theaters, retailers are only expected to recoup less than 20% of their losses from last year.
As a result, experts warn that the number of company bankruptcies are expected to increase with 30 major brands already filing for bankruptcy. With large household brands struggling to stay afloat, this opens up the opportunity for mergers and acquisitions on the largest scale that the retail industry has ever seen.
Creative buying options will dominate.
Not only have retailers had to shift to accommodate the pandemic, but how consumers shop has quickly changed as well. Buy online and pick up in-store has become a popular (and almost standard) feature offered by mainly brick and mortar retailers.
As such, creative financing options such as “Buy Now, Pay Later” have increased in popularity and given consumers the flexibility to get the items they need and want now – and wait to pay upon item pick up. This represents a large opportunity for retailers to increase consumer cart values as consumers are more likely to make a purchase if they know their money won’t be tied up in a purchase that a retailer cannot deliver on.
Competition will increase.
With the closing of stores and significant mergers taking place in the retail industry, the competition for consumer dollars will heat up. It’s estimated that 4.4 million new “pop-up” online businesses have started in 2020 to meet the growing demand in consumer goods. This influx of new companies and the mass exit of many established brands serves to create a new dynamic in retail where low cost, high quality will predominate.
For retailers, the key to standing out from the increasingly saturated market is to guarantee inventory availability while also offering highly flexible and convenient shopping options.
Footwear and apparel brands are poised to explode.
The boom in fitness apps, at-home workout routines and activewear has continued to increase since the onset of the pandemic. The interest in getting in shape and being active has already been one of the leading retail segments for large brands like Nike and Under Armour.
However, as consumers look to return to enjoying many of the everyday activities we’ve all had to put on hold due to the pandemic, footwear and apparel brands are in a prime position to cash in.
No matter what happens next, one thing is for sure: the retail industry has been forever changed. It’s hard to say what new trends will emerge as we start to live in this new post-pandemic normal. But, retailers that keep a pulse on consumer preferences and can continue to offer affordable high-quality products will likely be the ones handsomely rewarded in 2021.