Page 23 - Retail World March 2021

2. Escalating e-commerce: driving online and profitability E-commerce was the winning channel during the early part of the pandemic. Although this growth is receding, online penetration is expected to remain at higher levels than pre-crisis. Retailers have increased capacity and enhanced the experience for shoppers. Retailers will want to retain the newly acquired online shoppers, but will need to reduce overall operating costs to accommodate a larger, unprofitable online business. We expect to see omnichannel retailers encouraging shoppers towards click and collect to improve profitability. It’s likely that retailers will still have to offer rapid deliveries, such as same-day or within a few hours. They will either let the aggregators do it, let a third party do the last-mile, or accept the costs associated with last-mile rapid delivery and do it themselves. Retailers will invest in processes and automation to reduce their fulfilment costs. We’ll also see businesses prioritising growing online revenue by selling online advertising, and/or increasing delivery revenue through tiered subscription schemes and dynamic pricing. What we expect in 2021: • Retailers seeking to reduce their overall operating costs to accommodate online, improving processes and automation. • Encouraging shoppers towards click and collect. • Retailers assessing the options for rapid delivery – for example, the same day or in a few hours. 3. Making a meal of it: creating inspiration and excitement Many shoppers will be looking to recreate the out-of-home experience at home this year. There is opportunity for suppliers to partner with retailers to develop solutions, including digital platforms, that can support this. The evening-meal-at-home opportunity is still up for grabs. As the pandemic continues to create challenges for social interaction and people continue to work from home, we expect retailers to focus on inspiring meal solutions for all occasions throughout the day and week. By highlighting value, ease of preparation and cooking, along with inspiration, retailers have a real opportunity to capture shopper spend that was previously taking place out of home. What we expect in 2021: • Retailers creating inspiring meal solutions for all occasions. • Retailers seeking to capture shopper spend that was previously taking place out of home. 4. Holistic health: supporting health and wellness Retailers will aim to support both physical and mental health as a priority. We expect retailers to lead and respond to shoppers’ individual health priorities, which we anticipate will evolve and become broader. They will span nutrition, immunity, exercise, work-life balance and sleep. We’ll 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 influence their existing and new products. Personal health will increase in importance, but ultimately, affordability may take precedence during economic downturns. As health and wellness shape retailer formats and category developments, brands will need to consider what this will mean at a product level. What we expect in 2021: • Greater focus from shoppers on hygiene and sanitation products for individuals and the home. • Retailers and brands trying to differentiate themselves by helping shoppers and consumers live healthier lives. • More tailored solutions in-store, either through assistants or using digital tools like apps. 5. Recuperative retail: focusing on sustainability Climate change will remain a top priority in 2021, as it is recognised as the most likely source of major future disruption. We expect to see retailers push ahead with sustainability initiatives, as many have committed to supporting the targets of the United Nations Sustainable Development Goals and COP26 (2021 UN Climate Change Conference). While there will be much focus on how sustainability supports the climate change and resilience agendas, we’ll also see initiatives to build trust and loyalty with shoppers. Retailers have been one of the few points of contact outside the home during Covid-19, with retail staff a vital part of their communities. Many businesses have also actively played their part through donations and support for vulnerable citizens. They will look to build on this and create deeper relationships between their staff and the communities in which they operate. What we expect in 2021: • With climate change remaining a top priority, we expect retailers globally to push ahead with initiatives to support goals in this area. • Continued implementation globally of initiatives to reduce plastic and food waste. • Initiatives to build trust, loyalty and better relationships with shoppers, staff and communities. INDUSTRY INSIGHT About Toby Pickard Toby Pickard is IGD’s Head of Insight on Innovations and Futures – and the impact they could have on the industry. He regularly works with leading retailers and manufacturers to create content and insights focusing on the future of retail. About IGD IGD is a not-for-profit research and training organisation. It has a trading subsidiary that provides commercial insight services for the consumer goods industry. The profits from these commercial services fund our not-for-profit activities. Follow IGD’s communications team on Twitter for all the latest retail insights: @Comms_IGD MAR, 2021 RETAIL WORLD 21