There have been substantial changes in the way the retail world operates, especially in the last year. The difference results from the change in consumers' way of living, shopping and engaging. Amid a whirlwind of changes and transformations that the retail industry has witnessed since the beginning of the pandemic, some have continued into 2021 as well.
Let us look at a few imperative retail industry insights and trends that retailers need to look out for in the future.
The loyalty market will be more competitive
As consumer behaviour is seeing shifts, brands need to rethink their strategies to influence customer loyalty and gain trust. According to McKinsey, since the pandemic hit the US, more than 73% of customers have adopted new shopping behaviours such as contactless payment, BOPIS and experiential retail. Establishing customer loyalty will get competitive in an already competitive retail scenario. Retailers need to focus on certain key elements to shift customer loyalty. Convenience, cost and easy availability will be the go-to factor for shoppers. Personalisation is the new must-have trend for brands to engage and connect with customers better. Whether an in-store experience or a digital experience, today’s customers crave unique immersive journeys to engage with a brand. Retailers who offer customised loyalty programmes with instant rewards also tend to see a higher purchase history. Brands that don’t provide quick bonuses or offers to customers during the first week of loyalty cards/ wallets witness a decline in shopping experiences. According to a report by Digital Commerce 360, 86% of retailers that provide offers and rewards during the first week have noticed that customers have shopped at least once a week subsequently. To retain customer loyalty, brands will need to continue evolving and adapting to the digital wave of retail and embracing technologies to offer compelling experiences.
Retail brands are getting creative with content
The brands that deliver their product with compelling and creative content are ruling the online game of winning followers and popularity. With people consuming every piece of information via the internet, there has been an increase in demand for great content for brands. One way in which brands are doing that is with influencer marketing. Gone are the days when influencers post a selfie or a flat product shot on their social media. Retail brands are getting creative with their storytelling format and with their influencer collaborations. They are creating more authentic, user-oriented content for their brands.
Vocal for Local will go a long way
According to a report by Drapers, 64% of British shoppers opted for shopping from brands closer to home in the last year, and 91% of participants stated that they would continue to shop local. Consumer mentality has transformed drastically in the wake of the pandemic. When the pandemic hit us globally, many local and small shop owners suffered the consequences of low purchases due to limited online presence and a supply chain gap. As we progress with more conscious retail choices, customers choose brands that are homegrown or support local or small business owners. An Accenture report says that 56% of consumers are shopping in neighbourhood stores and purchasing more locally sourced products. This localisation push has led to consumers connecting with local brands to support them through the pandemic. India’s ‘Vocal for Local’ campaign gained massive momentum after its launch last year, a government-led initiative to help local artisans and business owners. As a by-product, there are a plethora of Indian local brands that have risen and loyal customers are supporting local retailing.
Pandemic behaviours will stay
Since the lockdown, we have seen many new buying patterns among consumers. Touchless payment has been the top priority and online shopping has increased. A report by Computer Weekly says that online shopping is predicted to grow for half of all non-food spend by 2030. The shift from brick-and-mortar to online stores accelerated in the past year for many brands. Furthermore, some leading brands, including Victoria’s Secret, Macy’s and Nordstrom permanently closed some of their physical stores. Another trend that picked up pace is BOPIS (buy online, pick-up in-store). BOPIS purchases have increased by 554% since May of last year, among US consumers, states a report by Digital Commerce 360. Another pandemic trend that rose last year was the prioritisation of shopping for essential commodities and slashing luxury spending. A WARC report states that 61% of consumers have reduced their luxury spending.
According to McKinsey, more than 65% of consumers plan to stick with these changes going forward.
Retailers embracing the technological shift in the future
The goal for retailers in the new normal is simple - collecting data on consumers and analysing their behaviour is a future-proof way to implement their best retail strategies. Adopting new technologies such as Augmented Reality, audio-visual storytelling and omnichannel experiences are key influencing factors to stand out.
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