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Predictions 2021: Customer Experience – Retail

7 Jan 2021

Trends, technologies, key topics, and issues around the retail sector that will shape up 2021

Digital technology is advancing at a fast rate while a global pandemic continues to change the way consumers live, communicate, work and shop. From record closures of well-known retailers to online sales soaring like never before, 2020 has been a year full of with surprises along with challenges for retailers to decipher and adapt to the ‘new normal’. Following such a turbulent year, I caught up with retail expert Steve Hewett to understand how customer experience will be shaped in 2021.  Below we have captured what we anticipate will be the key retail trends.

Increasing prominence of omni channel strategy

This prediction is already becoming a reality. The premise of omnichannel shopping certainly wasn’t borne out of the COVID-19 pandemic, but the pandemic has dramatically elevated consumers’ use of both on- and offline channels in tandem, whether for click-and-collect, contactless delivery or an array of other fulfilment options. With few alternatives available during the widespread lockdowns earlier this year, e-commerce quickly became a go-to means-to-an-end for shoppers. Months later, the reliance on e-commerce has expanded into a fundamental dependence on still-evolving omnichannel shopping experiences- one that is poised to be the norm in 2021. While the general trend has seen offline retailers moving into online by establishing e-commerce divisions of their businesses, more lately, we have seen online retailers developing a bricks ‘n’ mortar presence. At the other end of the spectrum is the trend of smaller start-ups and cottage enterprises opening pop-ups, concessions, and collaborations with bigger brands.

Touch free goes mainstream

A tremendous amount of innovation during the pandemic was born of the need to reduce the frequency of touch. And shoppers have embraced the trend with gusto. Digital shopping has soared, contactless payments have quickly become the norm, and several digital technologies that have been on the edge of more widespread acceptance for the last few years — are poised for growth. Technologies like AI, robotics, IoT, RFID, QR codes virtual and augmented reality (VR/AR), connecting these technologies is enabling retailers to bring the convenience of online shopping to offline shops and stores, and the richly interactive environment of offline shopping to the world of e-commerce. Some examples already seen include Shiseido is using hands-free technology (along with artificial intelligence and algorithms) to remotely analyse skin and offer personalised suggestions. A Japanese company recently debuted the first-ever foot-operated vending machine allowing hands-free access.

Sustainability led Innovation – focus from retailers on circular economy

While in the short term, we expect to retailers to quickly adapt to consumer changes in the wake of COVID, we expect sustainability to be a long-term focus as we get deeper into the year. According to “Consumer Products and Retail: How sustainability is fundamentally changing consumer preferences, a recent report by the Capgemini Research Institute, 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact.

In the longer run, we expect to see more retail models like food boxes and clothes rental to support people who may not have the expenditure for new items. We also expect to see more vertical farming projects be trialed in 2021, using technology to create more efficient farming procedures without the need for large acres of space. Retailers could begin to grow their own produce in-store and sell to consumers for cheaper and without the need for so much packaging to help reduce their carbon footprint. We expect an increase in initiatives that are goof for the planet and wallet!

Autonomous fulfilment

This one has been on the horizon for a while, but with the pandemic-driven changes, we’re likely to see ideas such as self-driving delivery vehicles and drone delivery really coming to life and being tested more widely- as another example of how to blend services both good for planet but also good for customer experience. Over the next year, autonomous delivery initiatives are likely to remain focused on ‘last mile’ solutions, employing self-driving vehicles and airborne drones for trips between fulfilment centres and consumers’ homes. Again, several trends will be involved here, including AI- to manage logistics and routing. Others will also most likely include blockchain, to ensure security and transparency along supply chains, and digital twinning, allowing sophisticated models of logistics and fulfilment operations to be built, driving efficiency.

Food service innovation to go mainstream by restaurants

With the threat of further lockdowns looming in 2021, the foodservice industry cannot afford to take another hit like they have in 2021. We expect to see the restaurant industry evolve and pivot their model in order to continue to run their business even in lockdown. Restaurants may begin to trial solutions such as ‘meal kits’ that consumers can buy so that they can receive restaurant like quality of food at home. The big challenge for many restaurants is to figure out how to provide a restaurant experience through deliveries and take away – which will be top of their agenda in 2021.

 Redeployment of store staff for virtual tours, classes – bring the instore experience at home

With lockdowns and social distancing dominating the year, retailers are now looking to capture the physical delight of the in-store experience by bringing it over to their digital channels.  Brands like Boots, Liberty are already seen doing this, and this is going to be a continued trend if lockdowns continue in 2021.

Meet our expert

Steve Hewett

Steve Hewett