In February 2020, I made a handful of predictions for how the retail landscape might change as part of my conversation with RIS News. Sure, the pandemic had a dramatic impact on the market in the last year, but the retail industry also demonstrated remarkable resilience — and brighter days are certainly ahead.
As for the predictions: Some of my forecasts fell flat, but a few of them were on the mark. Here's a quick run-down of things that happened and a new set of predictions for retail in 2021.
Healthcare in and near retail spaces: The blending of the two of the largest five industries in the U.S. is well on its way. CVS, Walmart and Walgreens have expanded their urgent care clinics as well as physician-staffed centers. Amazon has now become an online pharmacy and it is reasonable to expect they will leverage their Whole Foods physical retail platform here.
A recent survey found that 61% of city residents completely trust retail health clinics’ quality of care. And that 77% of consumers have one or more prescriptions that require regular pharmacy visits for refills. Of those consumers, more than half (56%) would consider using retail healthcare for preventive care, primary care and/or physical exams.
Privacy becomes the fifth “P” in marketing: Apple announced changes to IDFA, the Identifier For Advertisers in 2020 but postponed implementation to 2021. With these changes, marketers are expected to have to develop new attribution models. Additionally, privacy regulations have entered the enforcement phase. The Privacy Collective, a European non-profit foundation filed multi-billion lawsuits accusing major software companies of breaching GDPR in the way they process and share personal data in order to sell online advertising.
Sustainability becomes a key part of the customer journey: According to the World Economic Forum, in 2020 the business of sustainability has come of age. Outdoor clothing and gear retailer Patagonia now offers used clothing alongside new merchandise by adding a "buy used" option next to every product listed on patagonia.com, and this is a harbinger for the future. In addition, ThredUp, a leader in the circular economy, filed for IPO in 2020.
FedEx and UPS will enable retailers to provide safe, white-gloved deliveries to customer homes while they are not there: The logistics industry scaled up dramatically in 2020 and introduced several new services. However, since consumers have been at home more often, there was no driving need to provide white-glove delivery services while they were not at home. Once most people are back to work in the office, look for that to change.
Retailers will build storefronts on gaming platforms like Roblox, Unity and Unreal: In 2020, virtual concerts on gaming platforms became a reality. The first ever concert featured Travis Scott on the Fortnite’s Unreal platform, and was attended by over 12 million concurrent gamers. Retailers, similarly, will build pop-up store fronts in collaboration with brand ambassadors and influencers to reach audiences of 10s of millions of people.
Retailers will mass personalize, shoppable video especially on TikTok: Shoppable videos are interactive — shoppers make purchases directly from the content, eliminating search. TikTok is fast following Instagram’s lead and in 2020 is enabling early access to brands and retailers to the shoppable video live streams to the Generation Z audiences. Retailers will jump on this platform to reach and personalize new brands to this audience.
Demand sensing and forecasting using deep learning and real-time customer data will become essential for retailers: The pandemic has exposed the fragility of traditional demand forecasting techniques to regular shoppers who will never forget the empty shelves and aisles in stores. Traditional forecasting techniques are weak in handling seasonality, promotions, holidays, etc. and have larger challenges with time series data with no history. Retailers will transition to a real-time demand sensing paradigm with real-time customer data as the foundation, and close the data gaps they have between clickstream intent data and POS data.
Consumers will use virtual reality at home to try-on and purchase clothes, cosmetics and shoes: In 2020, retailers have started offering augmented reality within their apps to enable customers to use virtual images of merchandise with the physical environment of where it might be used. With virtual reality gear like Oculus becoming more inexpensive, retailers will take the next step into virtual reality to offer consumers a fully immersive experience to try on merchandise physically, blending the digital and physical world.
Post-vaccine, clienteling will drive consumers to return in-store for some retailers: With stores closed or partially open, the pandemic has transformed the contact center into a mission critical operation, created a new retail job, the online retail associate, who uses contact center tools to provide digital clienteling to consumers. Customers will reward the retailers that do well in this transition to an omnichannel clienteling offering from the contact center and in-store, by returning en-masse to the stores, post-vaccine.
Airbnb-powered retail experiences: In a post-vaccine era, and powered by capital from a recent massive IPO, we can look forward to retail experiences in large, safe homes powered by Airbnb or some other service provider.
Thomas Kurian is head of industry solutions of Treasure Data.