Retail, rockets, and the year ahead
On retail and rocket ships
And it’s nearly done. The turd that is the year 2020. When I think about retail, there’s still a long road ahead with much ambiguity.
A friend and I were recently discussing this next era of retail. He likened it to a rocket ship—or space shuttle, actually—re-entering the earth’s atmosphere. The climate has to be just right and the angle must be precise in order to successfully return to earth. Even a textbook re-entry, however, will not be frictionless as there is always burn off—the goal is simply not to burn up. To me this is a fitting analogy for what physical retail is facing, and will continue to face, through at least the first half of 2021.
The reality on the other side of the vaccine is yet to be seen, but we can do a bit of tea leaf reading to detect the likely retail trends for 2021. This brings us to today’s topic.
It was the best of times, it was the worst of times
Essential versus non-essential. One of the worst things that occurred in 2020 was the mass furloughing, and eventual job loss, of many of my friends who work in retail. In recent weeks, I’ve been heartened that some have returned to work in new positions with new brands that they are very excited about. There’s still much work that needs to be done to get back to pre-pandemic employment levels, but I’m hopeful that we’ve turned a corner.
Integrated, multifaceted brands. The “brands becoming media companies and media companies becoming brands” trajectory was already a pre-Covid phenomenon. This will only accelerate in 2021. Brands will seek to offer products, services, experiences, and community under one umbrella. For physical retail, this means stores will need to become hubs not only to sell products but also to experience all that a brand has to offer. One example: Lululemon’s acquisition of Mirror allows customers to take the brand home, not only with apparel but with content as well.
The frontline retail influencer. I’ve long lauded the immense, and often underutilized, talent of the frontline retail workforce. If a retail employee can make mixing paint captivating for over 100k people, think of what he can do for a brand if given the appropriate agency. Brands have a right to be protective of their image, but they often bury the voices of their biggest fans in red tape and outdated policies about social media sharing. Smart brands will tap into the vast talent on the frontlines to build customer loyalty and brand affinity. (For more on this, see: Walmart)
Logistics FTW. By now it’s pretty apparent that services like BOPIS and curbside pickup have been widely adopted by customers. Many brands have tested fulfill-from-store and smart last mile as ways to mitigate shipageddon. The logistics and fulfillment industries are ripe for disruption as out-of-the-box services remain partial and insufficient for most brands that lack the infrastructure of, say, Walmart. As customers continue to work from home and shop locally in 2021, stores will need to focus on updating their physical customer journeys to get customers the products they want, the way that they want them.
Partnerships > Wholesale. The wholesale model is suboptimal at best, but historically it’s been a necessary evil for an ecommerce-only brand to acquire customers outside of pricey performance marketing. This year saw more brand to brand partnerships outside of the traditional wholesale model, and next year will bring more of the same. These mutually beneficial partnerships bring visibility to all involved parties and allow each to maintain control over merchandising and customer data. (see: West Elm x Caraway, Zola x Made In)
Pay attention to the tension. There are several issues that have an outsized impact on the frontline retail workforce that will continue to garner (much needed) attention in 2021.
Diversity and inclusion will remain a priority for physical retail as often times the demographic makeup of the store workforce does not match that of the home office.
Earning a livable wage as a frontline retail worker is still a struggle. Higher profits should flow through to the store employees instead of stopping at the c-suite.
That’s certainly not all there is to be said about what lies ahead for physical retail, but it’s enough for now. I hope all of you have a safe and healthy new year’s eve, wherever you are.
Rebekah is the founder of Kondrat Retail, a consultancy that builds exceptional retail experiences and scalable practices for the next era of consumer brands. Learn more here.