The past 12 months were yet another period of intense reinvention for retail. Enforced store closures, an online shopping boom and the emergence of hybrid working all impacted the industry. Here are eight key trends from a pivotal year:
1. Touch-free took off
Contactless payments were available pre-pandemic but anxiety about infection-spread fuelled enormous growth take-up. With contactless, typical transaction time is reduced to 15 seconds – down from up to 45 seconds for chip and pin. Experts believe the strong push towards a cashless society will continue – forecasts estimate 420 billion transactions worth $7 million will shift from cash to cards by 2023.
2. Pickup in store picked up
According to McKinsey, 29% of Americans tried a new shopping method due to Covid-19 and 84% intend to continue it post pandemic. In-store pick-up and in particular curbside pick-up enabled by mobile POS grew at astonishing rates. National Retail Federation surveys show that two thirds of retailers currently offer, or plan to offer buy online, pick-up in store.
3. Online exploded
eCommerce usage was always going to accelerate. But when lockdown shut the doors of their favourite stores, customers had no choice but to shop online. Today almost three quarters (70% of Americans) are shopping online more than they were before the pandemic, and 52% of adults believe they’ll continue to buy some groceries online post pandemic (rising to seven in 10 Millennials).
4. Buy-now-pay-later (BNPL) grew by billions
With the rise in online shopping came customers trying out new payment options at checkout. BNPL is now a $100 billion industry, with Klarna, Affirm and Afterpay all holding significant market share. Klarna saw 300% growth in the first half of 2021 and is now used by 90 million users in 17 countries. US customers say the top reasons they use BNPL is to avoid credit card interest (39.4%) or to make better use of their budgets (38.4%).
5. Omnichannel became a non-negotiable
Despite ample warning, some retailers never adapted to the digital world. Over-reliance on physical stores pushed them and other operators to the wall. In the US alone, an estimated 3,700 stores have closed. But a resurgence is under way. Physical stores are now seen as omnichannel enablement centres, blending hyper-personalised physical and digital experiences via edge-to-cloud analytics and technology such as the IoT, AR and VR. Companies that prioritise omnichannel engagement typically retain 89% of their customers, compared to companies that don’t (for whom retention is 39%).
6. Retailers learned to love logistics
Sticky supply chains, stock shortages and a growth in ship-from-store models sent operational efficiency centre stage. Dark stores and micro-fulfilment centres sprang up, and new partnerships were signed to enable vital last-mile delivery.
7. Cloud became a must-have
Cost reduction requirements, the need for increased agility and recognition of the value of actionable insight through data drove Top Tier retailers to review both their commerce systems and their storage infrastructure. The result was a move to single SaaS commerce platforms, and migration away from on-prem to public cloud.
8. Growth didn’t disappear
Fear, uncertainty, lack of notice on Government action and a myriad of other issues couldn’t halt the growth of the retail industry. NRF estimates retail sales will grow between 10 and 13.5% to an incredible $4.44 trillion in 2021. As NRF President and CEO Matthew Shay said. “The pandemic was a reminder how essential small, mid-size and large retailers are to the everyday lives of Americans in communities nationwide.” We couldn’t put it better ourselves.
Flooid is working with Intel to embrace the opportunities that the new era of retail brings. With Flooid’s unifying commerce platform and Intel’s edge-to-cloud capabilities and expertise in AI and advanced analytics, retailers can optimise, modernise and become more profitable.
Read more about the Flooid Intel partnership here.