Trends

2021 Retail Trends: Industry Leaders Share Their Predictions

By Sherene Hilal

There’s a lot to be hopeful about going into 2021. For retailers, in particular, the challenges of 2020 actually set the stage for incredible opportunities in the coming year.

Across the board, retail leaders agree that 2021 will be the year of ecommerce. To better understand exactly what this means and what these leaders expect in the year ahead, Bluecore surveyed top executives at brands and retail agencies like J.Crew, Natural Life, GreaterGood, Leaf Group, Blue Moon Digital and WITHIN. Here’s what we learned.

A Note on Predictions After a Year That Proved Anything But Predictable

As we’re all painfully aware, 2020 was anything but predictable. Reflecting on what happened in retail reveals enormous swings in shopper behavior and a renewed focus on the purpose of digital. Against this backdrop, most leaders abandoned the predictions they made for last year and re-thought how they view everything from shopper behavior and inventory management to the role of digital vs. store and beyond. 

Bluecore, however, actually doubled down on our 2020 predictions. In the middle of it all we wrote:

The best predictions are the ones that hold true no matter what the environment throws at your business. That’s because the best predictions are about future-proofing your business so that it’s not so fragile that a single change to the environment will totally disrupt everything you’ve done.

Over the past several years, we’ve seen numerous disruptions to the retail industry. While they had nowhere near the immediate impact of the COVID-19 pandemic, trends like the rise of ecommerce, mobile, direct-to-consumer strategies and the subscription economy completely altered retail. They disrupted well-established businesses, many of whom didn’t survive.

Following these disruptions, one of the primary business goals for any retail organization should have been to increase agility to be able to pivot the business as needed in response to anything that might get thrown its way — expected or not. And any sound predictions should recognize the importance of this type of future-proofing.

With that in mind, we’re confident in our predictions for 2021, no matter what the year ahead might hold (but here’s to hoping it’s far less crazy than 2020). 

Looking Ahead to 2021: 3 Key Areas of Focus for a Forever-Changed Retail Environment

As we look ahead to 2021, we identified three key areas of focus for retailers based on our conversations with industry leaders:

Continued Digital Transformation

The retail leaders we surveyed unanimously agreed that the majority of discovery and buying will happen online in 2021 as the scales continue to tip in favor of ecommerce and digital channels.

However, these leaders do foresee different roadblocks that brands will need to overcome to continue accelerating ecommerce growth.

For instance, Michael Choi, Integrated Media Team Lead at WITHIN, calls out ongoing changes to regulations and technology as key challenges to managing data privacy. Over the past few years, consumer privacy has become one of the most important conversations in the marketing industry with GDPR, CCPA and the deprecation of third party cookies bringing on new challenges for marketers in the ecommerce space. Looking to 2021, we anticipate Apple’s introduction of ATT with iOS 14 will cause huge shifts in the balance of retailer media portfolios.  The top priority for this year will be refining our media strategies with our clients and partners to ensure we are prepared for what we know about the upcoming changes and have contingency plans in place for the unknowns.”

Interestingly, data access, data privacy and experience-related challenges outweighed concerns around shipping and carrier constraints (despite this proving a big challenge during the 2020 holiday season) and the ability to power advanced onsite identification and personalization. Those elements will no doubt be critical to success in an ecommerce-first world, but they are areas where retailers got more experience in 2020 and therefore feel they have better under control going into 2021.

Another important trend that emerged on the state of digital transformation in retail centered around the role of the store. Specifically, as retailers transform into ecommerce-first brands, the store will become more of a marketing channel than a commerce channel, for example by serving as concept locations for new products or even warehouses for local distribution.

According to Adam Fine, SVP Marketing at J.Crew, “Humans need experiences and to be in social environments, so brands will continue to rethink their retail stores to be more in line with this basic human need and interaction. This will be powered by seamless digital services which will focus on (1) optimizing service for customers with click-to-everything strategies and (2) maximizing efficiencies for brands.”

Evolving Consumer Behaviors

From BOPIS and investments in customer experience to the rise of informed consumers in a politicized world, to say that a lot has fundamentally changed for consumers over the past year would be an understatement. Going forward, we can expect these changes to have a profound impact on consumer behavior.

The leaders we surveyed believe these changes will center around the quality of the shopping experience, as brands will no longer be able to compete on just price and proximity in a digital-first world.

Along the way, we believe consumers will define the value brands offer based on factors like enticing and relevant product recommendations, the alignment of a brand’s mission to specific causes and the presence of reviews and tutorials that allow for more informed purchasing decisions.

As Cindy Brown, CEO at Blue Moon Digital, puts it: “Brands that haven’t, don’t or won’t address today’s sociopolitical events have felt the backlash. Do not be one of those brands. Many consumers expect and demand that brands take a stand on social issues. If brands aren’t using their platform to speak out and work towards affecting positive change, many consumers will purchase elsewhere.”

Technology and People Investments

In response to the accelerated shift to eCommerce and evolving consumer behaviors, the majority of leaders believe that brands will need to make changes to how they invest in both technology and people

On the technology front, clear priorities exist among the retailers we surveyed, with the importance of automating workflows to improve efficiency and personalization in a highly reliable way topping the list.

Changes to people investments appear a bit more divisive, with leaders differing on whether they plan to organize their teams around products and customers versus channels and whether or not they’ll maintain separation between the teams responsible for digital and physical retail.

Bluecore believes the approach of organizing around products and customers versus channels will ultimately prevail. Fayez Mohamood, co-founder and CEO of Bluecore, shares: “With a more streamlined supply chain and application of cloud-based and predictive technology, brands can move away from heavy discounting, seasonal inventory management and expensive customer acquisition. But this requires a complete restructuring of retail organizations to focus teams around products and customers rather than the traditional, more channel-centric approach.”

A New Era of Commerce is Here

As we enter 2021, continued changes centered around the ongoing shift to digital remain top of mind for every brand. This shift has ushered us into a new era of commerce — one that is more personal and focuses on elevating the customer experience to the same level of curation provided by the best digital platforms, such as Netflix and Spotify.

In response, retailers must consider changes to teams, processes and technology to stay competitive. To learn more about the shift that’s underway and how top brands like Ascena Retail Group are leading the way, watch the on-demand broadcast Beyond Transactional Commerce: Driving profitability in a digitally dominant world. Click here to watch now.

Sherene Hilal

Sherene Hilal

Sherene Hilal is the Chief Product Officer at Bluecore. In this role, Sherene leads the commercialization of products and business operations, with a focus on product vision, market differentiation, and enterprise excellence. Previously, Sherene was the VP of Product Marketing at Curalate, a content intelligence platform that makes images shoppable. Prior to Curalate, she served as the Senior Director of Product Marketing & Pricing for BlueKai (and later Oracle, following the company’s acquisition), where she defined and developed the “Data as a Service” category. Sherene holds a Master’s Degree in Applied Math and Systems from Columbia University and a B.S. in Applied Math from Cornell University.