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In an effort to boost their bottom line as the COVID recovery for the retail industry gathers steam, brick and mortar merchants may concentrate on the five critical areas identified in a recent analysis.
A new report from the artificial intelligence company Olvin, titled "Retail Statistics, Trends, and Forecasts for 2021," notes that there will be exciting opportunities for traditional retail in the years to come, but only if they take advantage of the knowledge gained in 2020.
Here's a description of what they discovered:
Olvin didn't mince words when describing how difficult the year 2020 would be for stores.
They highlighted that in October alone, brick and mortar shopper volume was down by a third compared to 2019, and 90% of customers reported that COVID had affected their buying habits.
Fashion was one of the most severely impacted industries, with revenues in 2020 falling between 27% and 30% from those in 2019.
It wasn't all terrible news, either.
Sales of food and beverages increased by 8.5%, those of general retail by 7.8%, and those of cleaning items alone increased by up to 40%. Some sectors of the retail industry even saw growth.
Meanwhile, omnichannel retail was of course a clear winner.
“Around 15 per cent of consumers that responded to an online survey said that as of June 2020, they were using online, pickup, or in-store services more often,” Olvin reported.
“And that’s partly because of the increase in businesses that are investing in omnichannel – the use of omnichannel approaches has risen by 80 per cent since the start of 2020.
“It makes sense – retailers have to adapt, and there has probably never been a time that they have needed to adapt faster than during a global pandemic.”
Over the holiday season, the retail industry recovered, with record spending continuing into Valentine's Day and Easter.
However, Olvin points out that over 40% of Americans do not see a return to normal financial conditions until the latter half of 2021, if not 2022 and later.
Despite this, there is a general feeling of confidence about the economy's revival. The US population as a whole expressed optimism for the economy to the tune of 41%.
12,200 shops have changed their closure plans as a consequence.
However, how can retailers make the most of their confidence and apply it to the opportunity that lies ahead?
Olvin claimed that despite a challenging 2020, real-world retail has reason for optimism given the current uptick in both sales and confidence.
But they point out that four major themes that emerged after COVID will be at its centre.A focus on the consumer
In the next months, the customer experience will be more important than ever.
Knowing your consumers may be one of the fundamental principles of retail, but Olvin observed that many companies lose sight of this principle once they have established themselves.Ethical activity
In recent years, the conscious customer has been progressively changing the retail industry. This tendency is anticipated to intensify in the next decades.
According to Olvin, customers are becoming more aware of the influence their purchases have due to the growth in the amount of information available about businesses002E
Customers are making far more deliberate decisions about the things they purchase as well as the companies they are willing to do business with.Cost-cutting
The difference between establishments that succeed and those that don't is increasingly being determined by the retail bottom line. It is crucial to increase this bottom line through decreasing costs.
"Retailers will likely be lowering their expenses drastically in 2021 to remain competitive, and they'll need to do so while maintaining the correct balance with their ethical credentials," Olvin said.Creative use of space
Retailers are rethinking how they use their physical real estate, which might lead to the demise of the classic brick and mortar store.
In-store recycling facilities, immersive experiences, coffee shops, and dispatch outlets are just a few examples of the growing number of alternate uses for retail space.
Discount stores are the most common choice when it comes to where individuals plan to shop for their Easter-related things, with 43% of poll respondents stating they intended to do so.
Discount stores are followed by:
Department stores – 35 per cent.
Online – 35 per cent (the highest percentage in the survey’s history and up from 28 per cent last year).
Specialty stores – 23 per cent.
Small businesses or local stores – 23 per cent.