New business models, e-commerce trends and consumer preferences for convenience are factors that can affect retailing for years to come. In this constantly changing context, the industry is trying to understand the future better. The factors that make up the retail industry are complex, but it is possible to identify some critical trends due to consumer preferences, technological developments, economic changes and market pressures.
These trends are shaping the strategies and investments of retail brands and startups in 2021.
New business models are proliferating the retail sector, and consumer preferences and technological developments are shaping retail startups in 2021.
Multiple Purchase Options and a Premium Service
Today, as consumers have more choices, competition has intensified, and inter-sector coordination has transformed the vitality of businesses. Many retailers offer high-quality services such as Amazon Prime, Flipkart Plus and other exclusive retail services to remain competitive. This strategy can lead to higher profits and better control of production, branding, pricing and promotion. This trend gained momentum in 2020 as COVID-19 brought a fundamental shift in the way people shop online.
Rise of E-Commerce and the move away from Brick-and-mortar Stores
Even before the coronavirus pandemic outbreak, physical retail stores were transforming into more of a digital model. From 2010 to 2018, the retail industry witnessed a fall in retail spaces as more businesses moved into the digital market. Unsurprisingly, e-commerce continues to develop as traditional shops are changing. But, traditional retailers are not going away anytime soon. These stores still account for more than three-quarters of all retail stores. Although customers still look to local retailers to purchase products, the in-store experience is usually lower in purchase transactions. To fill this gap, people do their work online before buying by researching products and competitors.
Convenience is a new Critical Parameter
In 2021, consumers can choose retailers as they see fit more than ever before. Convenient and comfortable shopping environments are the main reason around 20% of India’s urban consumers use online shopping. The growing affinity for convenience is likely to outgrow the pandemic, as more consumers are willing to spend more money to shop in comfortable, safe and easy e-retail markets. Convenience today means contactless shopping, rapid and point-to-point deliveries. As the demand for mobile payments, app downloads, online shopping and in-store options increases, all of these trends will continue, helping retailers make their plans a success.
Healthy and Stable Consumer Choices in the Retail Sector
COVID-19 has radically changed the shopping habits associated with consumer health. In recent months, over 40% of consumers have increased their spending on hygiene products (hand sanitiser, medicines, etc.). Sales of organic and sustainable developments have also increased. However, as other options are not weighed in research, it is unclear whether consumers actually prefer particular health products or bought them simply because other options were out of stock. Whatever may be the reason, retailers and startups in the healthcare and products industry can seize this opportunity, as consumer interest in healthcare products will last for years.
Mobile Shopping and Targeted Retail Navigation
Smartphones have become almost ubiquitous in today’s information-dependent world. People’s first introduction to a product could very well be on their phone due to the regular flow of data streaming into the device in their pocket. Still, most do not finalise a business on this medium. The mobile device is basically becoming the mouse to the physical world. It is an excellent possibility to reach consumers through local mobile ads when they are already out and about. Many labels have already adopted this technique. These mobile ads can hyper-localise your retailers’ reach, as customers near a retailer’s location will be presented with advertisements directing them to the retailer near-by.