Five trends to focus on this year  

Driving online profitability, creating safe shopping spaces and bringing the out-of-home experience in-home are among the key trends expected to shape global retail in 2021, according to a new report from IGD.

The research charity said retail businesses might do well to focus on five stand-out trends for the year which include digitally enhancing operations, escalating ecommerce, creating inspiration around meal solutions, supporting health and wellness, and focusing on sustainability.

The report expects introduction of digital technologies that have a low capital investment and are easy to update in 2021, alongside partnerships with third-party technology providers to speed up new tech introduction.

More use of machine learning and artificial intelligence at store level to drive revenue and increase customer satisfaction would be another area of growth this year.

“The pandemic has accelerated retailers and shoppers’ digital awareness and capabilities. Numerous companies have been testing and learning from new digital initiatives, and in 2021 companies will need to move beyond this to improve and implement at scale,” commented Toby Pickard, Head of Innovation and Futures at IGD.

“Digital transformation will require new leadership and a fresh cultural mindset as companies create flexible and agile ways of working.”

Ecommerce is expected to drive profitability as retailers seek to reduce their overall operating costs to accommodate online, improving processes and automation. Options like to click and collect and rapid delivery might get increased attention, according to the report.

“With many shoppers using the channel for their large weekly shop, we have seen retailers focus on enhancing the pickup, or click and collect, experience to help improve profitability,” Pickard said. “While the initial surge is receding, online penetration is expected to remain at a higher level, compared to pre-crisis.”

IGD expects retailers to create inspiring meal solutions for all occasions, in an effort to capture shopper spend that was previously taking place out of home.

As shoppers set to continue greater focus on hygiene and sanitation products, retailers and brands would try to differentiate themselves, particularly with more tailored solutions in-store, either through assistants or using digital tools like apps.

“We will see more retailers educating, informing and rewarding shoppers for living healthier lives. Companies will look to champion both their health and sustainability credentials, as the two key trends merge, of their existing and new products” Pickard said.

“Personal health will increase in importance, but ultimately affordability may take precedence during economic downturns.”

With climate change remaining a top priority, IGD expects retailers globally to push ahead with initiatives to support goals in this area, with a continued focus on reducing plastic and food waste.

“While there will be much focus on how sustainability supports the climate change and resilience agendas, we will also see initiatives to build trust and loyalty with shoppers,” Pickard said.

He added that companies should consider the two main variable factors from the pandemic – “the potential path of the virus (from a relatively manageable virus to multiple outbreaks with lockdowns) and performance of the economy (from an economic performance that quickly recovers to a hard-hit economy slow to rebuild” – when planning for 2021.