The outlook for retail before the pandemic of 2020
While the news for the retail industry this year has been dominated by one single theme, it is imperative to see what the forecast for the industry was before the onset of the pandemic and what lessons can be gained in the process. The concerns for the industry, changing aspects of consumer behavior, future trends in the industry, and how the industry could try to adapt to meet those expectations are some of the things that were predicted in these forecasts.
The outlook for the year was cautious, with the trade battle between the US and China, and the possibility of a ‘no deal’ Brexit already being two issues that were events which could’ve adversely affected retail. However, the black swan event of a global pandemic that has severely hit numerous markets has pushed it to the forefront of the worries for the industry. This pandemic has also brought to the fore numerous trends that have been in motion for a while and given an opportunity for the industry to reinvent itself for the future.
While retail stores were expected to see growth, albeit, in single digits, it was e-commerce that was expected to see the highest growth in the retail industry over the coming years. The rise of internet penetration across the world, a younger consumer base that is more relaxed shopping online compared to their older counterparts, and the wide variety of options available online have all contributed to this. However, there has been experimentation across the industry, and brands and retailers have also started to use the internet and combine their strengths in physical retail with the advantages offered by the internet. The O2O (Online-to-offline) model, where the internet is seen as a complimenting force rather than a competitive one, is one such development.
Change is the only constant:
Within a store too, retail has been seeing a change with stores adopting technologies and innovations such as IoT, AI, AR, and VR. This is fueled by the twin demands of trying to gather more data to better compete with online retail and of making the shopping experience innovative and more engaging for the consumer. Customer engagement is one of the top priorities for customers according to numerous surveys, and stores have been trying to stand out and ensure that the experience they offer their customers is a unique and positive one. Tailoring products and discounts to consumers based on their prior shopping history, making products and shopping more engaging through smart displays and beacons which can be used for interacting with the product, and virtual fitting rooms to try on options which are not available in-store at the moment are a few ways in which stores are going about it. These are innovations that were already starting to be adopted by the industry and by the biggest players in it, and retailers who do not keep up with these innovations will start to lose out to both their physical counterparts and e-commerce.
These trends are not just for countries like the USA but concern one such as India, China, and those in South East Asia as well. With young populations and high internet penetration, retail stores cannot afford to count on increasing consumption, as consumers might very well shift their loyalties to online retailers. If physical stores are to thrive in this competitive environment, they have to offer a more engaging experience to their patrons and ensure that the novelties they offer draw them to their stores and keep them engaged.
These were a few of the concerns, ideas, trends, and innovations that the retail industry was focused on prior to the pandemic. How that has changed things, and how the industry has adapted, and what it means for the future of the industry are some areas that we’ll write about in the future.