After a year unlike anyone’s prediction, the retail industry and its analysts are trying to figure out what 2021 will look like as COVID-19 continues to surge, vaccines against the disease are launched and anxious consumers long for life after the lockdown.
Vaccines inoculated against the coronavirus could change many of the trends that 2020 brings, while some of the changes are likely to remain and accelerate as the US and the world try to build a new normal.
The categories that decreased during the pandemic can be seen demand is “strong” this year, including clothing, beauty and footwear, according to NPD Group Chief Industry Advisor Marshal Cohen. At the same time, areas that are gaining traction in 2020, such as household items and other categories that are helping to make life at home better, could lose steam in 2021.
B. Riley Securities analyst Susan Anderson predicts that 2021 will be the year when “[f]ashion overtakes casual wear as wardrobes need updating for new experiences. “Following a year when fashion fell 25% to 40%, Anderson said in an emailed research note that the B. Riley team expects” fashion will return in 2021 when consumers get Out, ‘”with Revolve, Guess, Abercrombie & Fitch and American Eagle Outfitters reaped the largest profits among the companies they covered.
Other areas of growth, such as gaming and home productivity, could continue their growth post-pandemic, according to the NPD Group.
Some of the new shopping habits will likely stick around too. As Cohen noted, online shopping by consumers over 65 remains strong year-round in 2020. Some may return to physical spending after vaccination, but the NPD said that “it will be important to follow the long-term implications of older consumers. -commerce and monitoring the extent to which online shopping is replacing in-store shopping for this group. “
Digital is still a top priority
According to Deloitte’s survey data, digital acceleration remains a priority for 88% of retail executives entering 2021, making them the leader among all topics. It came after one year when, according to a Deloitte InSightIQ analysis of Affinity Solutions’ spending data, the share of online retail shopping reached 40% in the spring and holiday season.
“With a pandemic taking the volume of digital interactions to unprecedented levels, the majority of retailers expect a continued increase in digital engagement demand through 2021,” Deloitte staff wrote in a recent report.
It’s not just digital that took off last year. Multi-channel, with a mix of digital and store operations, is also at the center of attention and is likely to remain a major force in retail. According to a November study from the NPD, 34% of consumers report using the online buy option, pick up at the store since the COVID-19 restrictions began, and 31% say they have used curbside pickups.
In a company blog posts, AlixPartners Senior Vice President Alexa Driansky wrote that 2021 will be the year when omnichannels “stop being an afterthought” for the industry.
“For any retailer hoping to succeed by 2021, features like curbside pick-up, buy-online-take-in-store, send-from-store are an absolute bet,” added Driansky. “Retailers should think about how this option will work in the long term, because the time to attach Band-Aid to the fracture between the lines is over.”
For consumers, roadside pick-up options and shops reduce social contact amid the pandemic. For retailers, as Driansky notes, this can help reduce e-commerce running costs. He wrote that this channel “creating ‘win-win’ answers about speed and convenience for customers and reducing shipping costs for retailers. “
General cost cuts and lean inventory adopted last year amid store closings and general uncertainty could persist in 2021, boosting profits for retailers and brands, B. Riley Anderson noted.
Next year can also be defined, like previous years, by financial turmoil for some. Driansky noted that “a lot more retailers will file for bankruptcy, while those with deep pockets will undertake opportunistic acquisitions or consolidations. ”
While the volume of deals hit their lowest level in six years in 2020, the total value of mergers in the consumer market is up 7% from 2019, according to the latest report. PwC Report.
“Consumer players continue to rationalize their brand portfolios to reduce supply chain complexity and prioritize core brands for growth and scale,” the report said. “Investments in direct-to-consumer channels and digital authentic brands can help companies stay relevant amid the rapid growth of online sales. Adoption of emerging technologies will help build further transparency throughout the supply chain.”
As the market increases in general, it can create avenues for other types of deals as well.
As one example, Anderson suggested that the Bath & Body Works spinoff of L Brands of the Victoria’s Secret brand could be reactivated following a deal to sell a majority stake in Victoria’s Secret to private equity firm Sycamore Partners. fall apart in the midst of last year’s pandemic.
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