The future of retail: what lessons can we learn from 2020?
With signs of a vaccine and hope on the horizon what lessons can we learn from those retailers who have bucked the trend and are thriving despite the challenges? Vicky Hernandez shares her thoughts on the key things that retailers can learn from 2020 that will be key to their future success:
It is evident that those retailers who have had a successful 2020 had the infrastructure and leadership in place to enable them to flex quickly and adapt to new ways of doing business. With physical store closures, retailers have had no choice but to embrace technology (from online personal shopping consultations and virtual changing rooms to click and collect). The world is changing; those retailers who were prepared have simply accelerated pre-existing plans, other retailers will need to catch up quickly or risk being left behind.
A unique and innovative proposition
Without a physical store experience to define themselves, this year’s more successful retailers have looked to their product range to distinguish themselves from the competition. We’ve seen retailers move quickly to launch new products (homewares being a prime example as retailers pivoted to address changing consumer demand during lockdown) and branch out into other services as a way to generate income. Waitrose launched online cookery classes and other supermarkets set up subscription food boxes. Not only does this avoid putting all of one’s eggs in the same basket but it also helps generate interest in the more core product ranges. Next year as stores open up again retailers will be looking to follow trailblazers like Superdrug who have gradually changed their offering from being “just” a retail store to more of a leisure destination with nail bars, eye brow shaping and other services on offer.
Ethics and sustainability credentials are now key. We have already seen consumers start to reject cheap throwaway items in place of quality products that are built to last. Retailers like IKEA and John Lewis are already focusing on repairing and reselling second hand stock or renting products they would only have sold previously. This trend is set to continue. Millennials are far more concerned about equality and diversity considerations than older generations were. They are also deeply passionate about protecting the environment. Retailers who identify with this and can genuinely tap into the movement towards more ethical and sustainable ways of doing business (this doesn’t just mean making a few social media posts about topical issues!) will attract and retain a loyal customer base.
We have already seen that for some retailers is it no longer financially viable to sell one brand from lots of expensive retail stores. The alternative is to sell multiple brands or collaborate and share space with other retailers. BooHoo, which has done incredibly well this year, started with ownership of brands like Nasty Gal and Pretty Little Thing and now counts Karen Millen, Coast, Oasis and Warehouse within its portfolio. It’s not hard to understand how it has had such a great year when it owns so many well-loved brands without the overhead costs that physical stores bring.
Retailers are also looking more and more to concession type arrangements where they occupy space within another retailer’s store. With rents and rates being the biggest overhead for many retailers the alternative to downsizing stores is to share retail premises. Traditionally retailers have shied away from too much co-operation with their competitors but many are starting to see that in being united they can not only reduce costs but also extend their reach to more customers.