2021 Retail Predictions From Today's Industry Experts

It’s safe to say that no one is sorry to see 2020 go.

With even Oxford University Press designating “unprecedented” as the 2020 Word of the Year, it’s officially been a year like none other, even for a battle-hardened industry like retail. Retailers spent the year pivoting, experimenting, collaborating and leveraging new technology in order to serve their customers and support their employees, and they certainly learned a few things along the way.  

Year-end retrospectives abound, and so RIS decided to balance this out by tapping into some industry experts to get a sense of what’s ahead. To be sure, no one is expecting an easy road, but there are signs that retailers are ready and eager to build on their experiences in order to emerge stronger and smarter from the pandemic.


The New (New) Normal Isn’t Normal Just Yet  

“While we are all hopeful for a fast rollout of vaccination, we should expect the first part of 2021 to continue the 2020 trends associated with a large part of the U.S. population working or studying from home. These include a growing adoption of e-commerce and BOPIS, higher spending on groceries and home-care categories, reduced spending on anything associated with travel or office work — from business apparel and footwear to phone chargers.

“We also predict the continuous need to analyze data at a local level since states and even counties are alternating between lockdown or online-schooling and re-opening at different times, significantly influencing consumer habits. A granular view of in-store data and leveraging new sources of data from e-commerce to locations will continue to be critical to understand the big picture, plan supply and execute on successful promotions.” — Inna Kuznetsova, CEO, 1010data

“The Year of the Vaccine shapes retail branding. How will retailers make us feel safe when returning to shop in a more ‘normal’ way? In the United States, for example, Dunkin’ has taken an interesting path to help customers feel safe. One of the company’s recent ad campaigns emphasized that Dunkin’ has been here all along regardless of the pandemic, and it continues to be a warm, safe space for customers to grab a daily dose of caffeine. That feeling of wanting to return to ‘normal’ life is pervasive, and retailers that help consumers see the new normal as safe and welcoming will win.” — Dan Mitchell, director of retail and consumer packaged goods, SAS      

“The pandemic’s impact on the retail industry rapidly sorted retailers into one of three categories: survivors, optimizers, and differentiators. Survivors have been forced to reduce spend wherever they can while keeping as many sales channels open — a delicate balance as they weather the storm and stay lean in their technology investment. Optimizers have recognized the need to adapt to newer models and newer consumer journeys in a more rapid and agile fashion. Differentiators have been afforded the opportunity to go on the offensive and have looked to utilize digital enhancements to create more compelling value propositions, more digitally-enabled consumer journeys that bridge online and offline, and invest in creating sustainable advantage with technology via automation and intelligence.

“All retailers will begin 2021 having recognized the need to adjust business models that are more resilient and adaptable, that leverage the use of open technologies to support flexibility in journeys, and that further reduce friction in the consumer journey.” — Arvin Jawa, VP, retail industry strategy, Diebold Nixdorf

“We’ve seen Deloitte and others make reference to ‘a tale of two retailers,’ which of course refers to essential vs. non-essential businesses — and their experiences throughout 2020 were completely different. In 2021, we are likely to see this divide widen. One half of the industry — the ‘essential’ retailers — presumably have some advantage in that they have been open and innovating continuously throughout this crisis. Over time, we could see their stores and people demonstrate greater agility than their non-essential counterparts, given their experience operating on the frontlines during the earliest months of the pandemic.

“At the same time, essential retailers — especially grocers — may have fared better financially in 2020 and are likely now in a better position to invest in digital channels, improve logistics, redesign the layout of their stores, introduce contactless technologies in the workplace, and so on. Looking back on 2020 and its impact across all industries, we can recognize that innovation truly knows no bounds. Retailers with the resources to reinvent their business for the post-COVID era are going to come out on top and will lead the transformation of the retail landscape as we know it.” — Amanda Nichols, senior manager of the retail, hospitality, and food service practice of UKG (Ultimate Kronos Group)



Emerging Technologies

“Technology plays a significant role in everything we do today, and retail is no exception. Retailers that want to be successful will need to optimize their labor operations by leveraging technology (and artificial intelligence) solutions to automate the routine tasks they’ve traditionally done on paper, e.g., schedule creation and communication.

“For example, today’s workforce management solutions offer retailers real-time data and analytics that not only enable the ‘smart’ automation of manual tasks, but also generate predictive scenarios and their impact on in-store traffic. AI-driven solutions can also ensure compliance with labor standards on a ‘by location’ basis, enable automated Covid-19 contact tracing and healthy work protocol communications; and even identify and automatically schedule top performers during peak periods or special events.” — Sanish Mondkar, founder and CEO, Legion Technologies

“Investments — of substantial size — in the latest wireless technology are going to pay off in many aspects of retail as it promises to unleash new experiences. Mega-trending 5G is poised to deliver unheralded speed and bandwidth to ensure shared visibility of retail data without impacting other in-store network operations. Expect 5G to go from pilot to production phase throughout the retail industry.” — Tim Rowland, CEO, Badger Technologies

“When you look at the use of AI in consumer-facing operations today, it’s mainly used in AI-supported chatbots and customer personalization features. If we look at how consumers have taken advantage of AI-supported features during the pandemic, we can see that they’re actually using them to resolve issues faster through human agents.

“Companies like Bank of America, which has a consumer-facing AI-powered chatbot named Erica, saw consumers using Erica to find the best course of engaging customer support teams. Rather than asking Erica questions to fix any issues directly, customers simply asked Erica how they should go about reaching out to the customer service team to rapidly resolve their problem with the appropriate human agent.” — James Isaacs, president, Cyara

“2021 will give rise to hyper-personalization within the e-commerce sector in regard to the customer experience. We'll start to see AI technology coupled with NLG create a type of 'algorithmic e-commerce' experience, where customers gain bespoke shopping experiences through customized product and category descriptions. This growing trend will lead to a shift with vendors offering a product type approach to personalization and the customer experience, which has always been a consulting product in the past. All this, when vendors struggle even with delivering personalization, so the personalization sector will need to change dramatically to deliver value, or it will be forgotten.” — Robert Weissgraeber, CTO, AX Semantics



Omnichannel Integration

“E-commerce and traditional retail have been largely separate channels. Going forward, the hallmark of successful merchants will be deeper integration between online and offline assets. This includes distribution of real-time product inventory online. Roughly 40% of online purchases will be picked up at local stores. The ability to search for a product, buy it online and pick it up the same day or next day locally will become a permanent feature of the customer experience for major retailers and a key success factor.” — Greg Sterling, VP of insights, Uberall

“Physical stores will always remain an important part of retail. However, the future belongs to the retailers that understand the omnichannel ethos and figure out how to integrate the convenience, speed and power of e-commerce with the sensory appeal and excitement of physical stores.” — Dave Cesaro, executive director, client strategy, Valassis

“Online grocery shopping will finally reach mass adoption, meaning grocers now need to differentiate their online experiences to compete. We’ve finally seen more shoppers test out online grocery shopping as a result of COVID-19, and I predict we'll see e-grocery continue to flourish in 2021. The pandemic has already had a monumental impact on how we grocery shop — in the US alone, online grocery sales increased from $1.2 billion in August 2019 to $7.2 billion in June 2020. In 2021, to compete, we’ll see grocery retailers capitalizing on this trend in myriad ways — it will be smart for grocers to bolster their online services, offer membership programs and look for new ways to better align their online shopping strategy with their in-store shopping and curbside experience.” — Faisal Masud, CEO, Fabric

“For established retailers I expect that there will continue to be an acceleration of online capabilities and hammering out the kinks in the supply chain, but leading companies will begin to transition online shopping from a clunky point-and-click experience to something much more akin to a virtually shopping a flagship store. Many of these retailers will also be looking to improve profitability to fund these investments and deal with difficult market conditions. Leveraging data and analytics to eliminate the waste in promotions, assortment and inventory while also improving the offering for customers will continue to be critical. In short, I expect retail of 2021 to be accelerated and precise.” — Katherine Black, partner, Kearney



Supply Chain and Fulfillment

“The COVID-19 pandemic created a major spike in outsourced delivery services as restaurants, grocery stores and retailers rushed to adapt overnight to shifting consumer needs for home delivery. Months later it’s become clear: the delivery-based business model is not going away, and the high fees and unpredictability of outsourced services are no longer tenable.

“In 2021, retailers will cease to use outsourced delivery services by building their own app-based solutions for delivery scheduling, routing and live location tracking. These tools will provide countless more options for customization and integration with vendors’ POS, CRM and ERP systems, giving them greater control over the last mile experience and a greater percentage of profit margins.” — Kashyap Deorah, founder and CEO, HyperTrack

“As uncertainty persists, adjusting the supply chain to meet unprecedented disruptions is a new reality. A holistic, end-to-end view of the supply chain opportunities with prescriptive recommendations will allow retailers to address dynamic changes in any part of the supply chain. Gartner predicts that by 2022, half of all legacy spend analysis software will be retired, replaced by AI-powered, cloud-based solutions. This will help retailers address global ecosystems and the circular economy, as well as digital drivers and collaboration with direct-to-consumer and CPG companies.” — Kevin Sterneckert, chief marketing officer, Symphony RetailAI

“As the pandemic continues, more grocers and CPGs will adopt intelligent automation to handle the growing demand for scarce products in certain categories. Grocers will also continue investing in automation that powers efficient, contactless services such as: automated checkout, fulfillment technologies (micro-fulfillment centers), central-fulfillment centers and picker robots, and driverless delivery vehicles. And as grocers scale up their e-commerce operations, they’ll be focusing specifically on fulfillment technology to efficiently power their CPG-sponsored promotions and newly launched auto-replenishment programs.” — Sylvain Perrier, president and CEO, Mercatus

“Automation will move to smaller footprint facilities: As consumers turn to online shopping and companies seek to support higher density population areas, we will see automation solutions deployed in existing stores and smaller fulfillment centers closer to major cities. We’ve already seen ecommerce businesses creating smaller storefronts and access points to urban areas so they can reach more customers, and this trend will accelerate as ecommerce and omnichannel continue to grow.” — Melonee Wise, CEO, Fetch Robotics

“Post-pandemic, brands like Apple, Best Buy and Home Depot offered curbside pickup and drop-off during the 2020 holiday season. There is a mobile opportunity in this digital-first mandate. Brands with the best apps and text message programs—  both of which should be used to streamline customers’ purchase journeys — will win in the future.

"Additionally, location will become a larger factor in 2021. For years, the trend had been for consumers to shy away from sharing location information with brands. Our data shows the pandemic reversed this trend: shelter-in-place consumers wanted to unlock experiences that were suddenly need-to-have options instead of nice-to-have conveniences.” — Bernardo de Albergaria, CCO, Airship




“The legacy/on-prem POS no longer suffices in this day and age. It takes something as big as a global pandemic to affect the industry across the board, but we’re seeing its effects rippling into 2021. Adopting a hybrid model to grant flexibility and future proofing ecosystems is key to staying ahead of competition. The benefits of leveraging data for sharing with vendors give retailers the edge to provide insight, recommendations, and automation.

“Mobile-first is the de facto standard for growth. In 2021, more of the world will go mobile as workers shift from a nine-to-five job and determine new ways to live in work-life-harmony vs. work-life-balance.” — Dax Dasilva, founder and CEO, Lightspeed

“Real-time data is the key for 2021. With consumer shopping more disjointed than ever before, retailers can find a competitive advantage in a robust omnichannel experience informed by consumer behavior across channels. Businesses that can identify customers’ needs and preferences and meet them, in the moment, will pull ahead of the pack.

"Take e-commerce for example, retailers, who have not invested in hyper-localized demand sensing analytics using real-time customer data with POS data, to plan inventory capacity, will be challenged to meet customer expectations.” — Tom Treanor, CMO, Treasure Data



Consumer Experiences

“2020 has forever changed how we shop in stores. One of the welcome changes is shorter lines at the checkout stand. That, combined with a new awareness of every surface we touch, is an opportunity for retailers to rethink in-store transactions and make a move to a touch-free, hassle-free customer experience at self-checkout.

“Because RAIN RFID reads many tagged items simultaneously, customers don’t need to search for a barcode to scan each item individually. And, with new capabilities in RAIN RFID tags, touchless checkout systems are not only faster and easier for customers to use, they can be integrated with seamless product returns and smart loss prevention systems.” — Gaylene Meyer, VP global marketing, Impinj

"As retailers and public-facing businesses of all kinds continue to operate amid changing restrictions, the need to clearly communicate the latest health and safety information remains absolutely vital for smooth operations and public support. For any type of retail business — from restaurants to boutique stores — one of the easiest and most non-invasive ways to provide customers with up-to-date policies, special store hours, general store information and local ordinance updates is through strategically placed digital signage that can be easily updated at a moment’s notice as conditions change. We expect this trend of utilizing digital signage as a health protocol communication medium not only to continue — but to grow as we enter the new year." Dan Smith, LG’s vice president of business development

“With privacy regulations and digital acquisitions costs increasing, retention marketing on owned channels will be even more critical to meeting revenue goals and building customer loyalty.” — Christian Selchau-Hansen, CEO and co-founder,  

“The world of social commerce is booming, and we can only expect to continue to see further investment, particularly in social and livestream shopping apps, such as Pinduoduo, who laid the groundwork for the surge in social commerce in the Western world. And as the pandemic continues to alter everyday life, consumers are looking to brands and retailers to offer them the experiences they previously had in-store, online. This will lead to a rise in online personal shopping offerings, where consumers can connect over video conferencing apps to have a tailor shopping experience, all from the comfort of their own home.” — Lucas Tieleman, EVP of product, Bazaarvoice

“While the shift to digital for many industries will be a long-term change, as the pandemic eases, digital will no longer be the only game in town. There will be a surge towards people wanting traditional experiences, but they have to be ‘safe.’ This means that trust — already a huge differentiator — is crucial. As consumers, we want to get experiences from brands who we trust to protect us, keep us safe, and keep us healthy. Successful businesses will be those that earn that trust and show empathy, so CX professionals need to be asking customers what a “safe” world looks like to them, so they can drive action to deliver it.” — Chris Brown, VP of expert consulting, Confirmit

“Consumers are looking for easier and faster ways to pay. Credit and debit cards have huge wallet share, but buyers are looking for more flexible payment options, better identity solutions, more robust reporting on their purchases, and ease of use. Payment cards are the industry standard, but they haven’t changed in decades.”  — Allison Barr Allen, COO and cofounder, Fast