2020 has been a challenging year for many sectors, and retail has been one of the most affected by the COVID-19 pandemic. We’ve witnessed major closures, such as Arcadia (Topshop, Dorothy Perkins, etc.) and Debenhams, showing the immense struggle on the high street.
As 2021 begins, retailers are looking forward to new opportunities and trends that will shape the industry. Here are some key areas to watch out for:
Opportunity in Crisis
Despite the difficulties, some retailers have thrived by being agile and responsive to changing demands. The ability to innovate and adapt will be a key differentiator in 2021. Success lies in a mindset of constant product or service evolution and operational excellence.
Digital Acceleration
The pandemic has accelerated the shift to e-commerce, with online shopping hitting record highs during lockdowns. Retailers will need to fast-track their digital strategies, optimise omni-channel experiences, and leverage AI to analyse data from social media and personalise the shopping experience. Trends like visual search and social shopping will continue to grow. Internally, retailers need to streamline their operations to keep up with the demand, and approaches like Pragmatic Agile have proven beneficial for some.
Traceability
Customers and regulators are increasingly demanding transparency regarding product ingredients, sourcing materials, and production processes. Retailers will need to continue improving traceability, ensuring ethical sourcing and compliance with regulatory standards.
Transformation While Maintaining Operations
Managing IT ecosystems during major transformations is a challenge, particularly with the growing reliance on cloud technologies. Retailers will face increasing cybersecurity threats, making it crucial to maintain operational stability while implementing changes to meet customer expectations.
Supply Chain Pressure
Brexit and the pandemic have disrupted supply chains, from sourcing raw materials to logistics. Retailers are already adapting by shifting from sea to air freight, though this impacts profitability. Supply chain challenges are expected to persist in 2021.
In conclusion, while retailers are eager to leave 2020 behind, the lessons learned will be valuable for the challenges ahead. Success in 2021 will depend on right-sizing the workforce, implementing effective change management strategies, and being ready for the opportunities and obstacles ahead.
At P2, we thrive on helping our clients tackle these challenges. If your business is facing similar issues and you’d like to discuss how we can assist, please don’t hesitate to get in touch.
