Flexible and Contact-Free: Retail Investment Predictions For 2021

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Flexible and Contact-Free: Retail Investment Predictions For 2021

By Lisa Johnston - 10/21/2020

Logistics will win retailers’ investment dollars in 2021, Forrester Research predicts, as they seek to maintain or grow business in a disrupted landscape.

This will translate to faster and more flexible delivery through dark stores and microfulfillment centers, as well as subscription services and drop-shipping. Some retailers will also investment in annual subscription services like Amazon Prime and Walmart+.

Somewhat unsurprisingly to anyone wearing a mask right now, contactless payment options will be a top trend next year, as will flexible payment options. Nineteen percent of U.S. online adults used a fully digital payment in-store for the first time in May, according to Forrester, and of those, 62% used their phones and 56% used their credit cards to pay.

While just 40% of U.S. consumers who were aware of installment payment methods had used them in 2019, Forrester expects their use to rise significantly in 2021, spurred by active marketing by retailers and brands.

Speaking of brands, expect to see more consumer goods brands take greater control of their supply chains to compensate for shrinking wholesale partners, as well as invest more heavily in direct-to-consumer selling.  

The savviest brands in 2021 will be far more proactive and protective about distribution,” the research firm states. “To start, they’ll take charge of their supply chain, which will involve remastering their digital supply chain and harnessing AI-based retail planning to manage through ‘the new, unstable normal’ ahead.”

Successful brands will also need to reevaluate their wholesale network, better vet their drop-shipping partners, and improve control over their brand online to protect them.

Finally, expect malls and mall tenant agreements to look a lot different moving forward, as the successful mall operators reinvent their business models to account for new needs.

“Some malls will shutter — in some cases, by design,” notes Forrester. “The savviest operators will shift their models to capitalize on their premier locations, closest to customers and logistics infrastructure, while converting excess capacity to build the emerging logistics solutions that retailers and brands need.”

The research firm predicts mall operators will change tenant fee agreements to include online sales that involve in-mall fulfillment like BOPIS in addition to traditional in-store sales.

Sucharita Kodali, Forrester VP, principal analyst at market research and consulting firm, spoke at Analytics Unite earlier this month, and shared deeper insight into what retail sales trends may look like next year.  

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