In the fourth installment of our new 2021 Outlook Series, Brand Innovators talks to Retail CMOs and marketing leaders for insights into what to expect next year, and how the category will innovate as consumers avoid in-store shopping experiences and adopt new forms of low contact behaviors.
Retail faced a challenging year in 2020, as already struggling bricks-and-mortar stores shut down for months and the uncertain economy hit the channel hard.
But innovations like curbside pickup, contactless payment options, app orders and digital returns have helped the channel bounce back — and will likely be a driving force for retailers in 2021. Retailers that pivot to meet new consumer behaviors and communicate shared values will thrive in 2021.
“Consumers are looking to brands that reflect their values,” says Mary Alderete, CMO of Gap. “Brands they can trust and that deliver personalized experiences across multi-channel touch points, both digitally and in-person. The category leaders that emerge in the new year, and build momentum, will be those that can make a culturally relevant connection between their products and consumers.”
Retailers will invest in logistics to improve speed and flexibility in 2021, according to Forrester. The research group also predicts that store space will be reimagined – some stores will shut down and reopen as warehouses supporting online orders.
“In 2021, I believe that we’ll see convenience and digital services, as well as the supply chain changes that were accelerated by COVID-19, continue to be top of mind for consumers,” says Patrick McClean, SVP & CMO of Walgreens. “COVID-19 forced people of all ages to adopt new ways of shopping digitally and for many, introduced them to shopping online and picking up in-store, at drive-thru and curbside, as well as same-day on-demand delivery of items beyond food/restaurant delivery. I also expect that consumers will continue to prioritize a safe shopping experience and look for retailers that are following health and safety guidance when choosing where to shop.”
Contactless and deferred payments are expected to transform 50 years of consumer payment behaviors among US consumers, Forrester predicts. During the pandemic, 19% of US online adults paid with a completely digital payment tool in-store for the first time in May. Among those, 62% used their phones and 56% used credit cards to make these payments. Expect contactless payment methods to increase significantly in 2021.
This year retail brands have had to be nimble and able to produce marketing messaging that reacts to the time. This approach will continue for retailers in 2021, as they look for ways to evolve their processes for creating digital content and storytelling to ensure they can quickly react to their community, whether that be reaching homeschooling parents or social justice activists, or in many cases, both.
“We have got to look at 2020 as an opportunity to evolve and formally change processes,” says James Gregson, Head of Social Content Studio for LEGO. “There’s a lot of archaic potentially historical processes in place whether that is around creating content or coming up with marketing or communications strategies that you need to potentially flip on its head.”
“2020 has been a year of reaction and constant pivoting,” Gregson continues. “I believe this will continue into 2021: creating processes that support that constant evolution and that need to be very close to what is happening within your communities or within social media, wherever your message is living.”
One message that will continue to be big into the next year is health. Consumers that go into stores want to be reassured that doing so is safe. Retailers should continue to offer safety measures that do their part to protect the health of shoppers in 2021, such as offering hand sanitizer, requiring masks, maintaining plexiglass and limiting the number of patrons allowed inside at a given time.
“Health and well-being is going to continue to be a big focus,” says Alyssa Raine, Group Vice President, Customer Marketing Platforms, at Walgreens. “As a nation, we have now realized how important our health is to us because we want to stay here as long as we can hopefully and so health and well-being will continue to be a big focus.”
“As Americans we have optimism and always look for a silver lining,” Raine continued. I think we have a long road ahead, but I am very pleased with the optimism we have as a nation being able to find that silver lining and continuing to get through it together.”
Retailers that offer health-oriented products like vitamins, hand sanitizers and medicines will likely do well next year as people proactively look for products to help them stay healthy. But pharmacies are not the only kind of retailer feeling positive.
Despite a tough 2020 for retail, some apparel brands are optimistic about 2021. Carter’s has already launched a new campaign called “Hello Optimism” playing up the optimism felt when a new baby is born. Jeff Jenkins, EVP, Global Marketing at Carter’s Inc., says that he has optimism overall for the year ahead.
“Our brand is in a unique position – we are with parents from the start, engaging with our core consumers in the most joyful and exciting moments– welcoming new babies, celebrating first holidays, making new family memories and more,” says Jenkins. “That allows us to share an optimistic, supportive and emotional dialogue with our audiences – even in a year like 2020.”
In 2021, consumers will likely continue to spend more time at home, which could continue to benefit home goods retailers. When they do go out, many people are cutting down on social encounters and looking to spend more time outdoors connecting with nature. Retailers that support these adventures have an opportunity to reach consumers next year.
”In 2020 the world re-discovered the outdoors, DIY, and the people who perform essential work every single day,” says Tony Ambroza, Chief Brand Officer at Carhartt. “While technology keeps us virtually connected, unplugging and engaging with the rugged outdoors keeps us human. Carhartt is built for this and we believe this trend will continue in 2021 and beyond.”
