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2021 trends guide for retail brands: How to adapt to the new normal

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UX Consultancy Guide for Clients

SuperSuper Top 10 Retail Industry Trends for 2021

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Slavica Grgic

Marketing manager

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Mario Stipetic

CX lead

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UX Consultancy Guide for Clients

Introduction

2020  has brought unprecedented change to the retail industry. Although the ongoing pandemic only accelerated the growth of the online business, in the future, we can expect that some retailers will thrive while others struggle to survive. Interestingly, COVID-19 has accelerated four key fundamental trends that were already influencing the sector: evolution of the business model, focus on the sustainability of the supply chain, rethinking cost, and the increased power of the consumer.

This article will explore how retail markets around the world are changing and how the retail industry might prepare for the new reality.

Here is the list of the following 14 fashion retail eCommerce chapters:

  1. Recurring revenue (subscriptions) bundles trend
  2. Traditional advertising is losing importance in favor of online ads
  3. Zero-click shopping
  4. Brands that don't innovate and compete in tech will lose their market share and relevance
  5. The focus will be on customer experience innovation, not the brand itself
  6. Tech companies are driving the distribution trends
  7. Utilize big data to make better decisions and improve customer experience
  8. Sustainability of the supply chain and emphasis on ethical values
  9. Brands who win obsess over the customer experience

SuperSuper agency can help your brand to leverage 2021 trends and improve customer experience with customer research and design. Please contact us here, let's talk.


1. Recurring revenue (subscriptions) bundles trend

According to a Royal Mail report, the subscription market has grown by 100% year-over-year for the past five years, and, in the UK alone, the subscription box market is expected to grow by a further 72% by 2022. And with the help of AI, subscription-based retail revenue can be more personal than ever.

Consumers can be overwhelmed with too many choices, and subscription-based models can offer many benefits, both for the customer and the retailer.
It is convenient for the customer  - It saves time and effort of going to the store or webshop. They're already familiar with the service and what they're getting for their money.
It is convenient for the retailer - It's much easier to budget and plan when dealing with subscriptions.
Higher retention rates - Customers are committed to the subscription service in the long term.

One great example of subscription-based is HelloFresh. They send boxes of convenient meal kits that contain high-quality, fresh ingredients that are pre-measured for a recipe. That way, you don't have to worry; you'll have leftovers, and you can cook an easy, quick meal without the hassle of going grocery shopping.

HelloFresh landing page

Apple also started with the bundle offering with its Apple One subscription.

Apple One bundle offer


Your brand should offer your core product as a bundle (HelloFresh example) within the bundle offering and not a secondary offer like Apple One. Your customers will get the most value with your core product.


2. Traditional advertising is losing importance in favor of online ads

Brands are fleeing from traditional media (TV, radio, newspapers) to digital media (websites, social media) through their smartphones and laptops. Advance advertising algorithms available on Facebook, Instagram, TikTok, or Google make it easier to serve your ads to your audience.
Instead of sending a single piece of content to many customers, you can tailor your message to fit the needs of unique customer groups in your audience.

With the help of advanced media metric tools at the disposal, it is crucial to identify their customers and analyze their behavior.

Digital vs traditional media time spent

Time spent per day with digital versus traditional media in the United States from 2011 to 2020

3. Zero-click shopping

Some companies recognized that and offered zero-click to their customers. For example, one of the biggest pizza restaurants chains Domino's, started using it in 2016. When their users open the app, the order is automatically placed, and they are given a ten-second countdown to cancel.

Dominos Zero click user interface

With zero-click shopping, companies would send customers not only items they ordered but also items they would probably buy. This entails advanced algorithms for predicting choices, or in other words, figuring out what customers want before they want it. TikTok's algorithm is a good example but in the video domain.

This approach implies trust between customers and the company and also the return option. Customers would also be provided with an opt-out option, but companies would do their best to predict customers' needs to make it unreasonable for them to use it.

SuperSuper agency can help your brand to identify and design a seamless solutions and in the end improve customer experience. Please contact us here, let's talk.


4. Brands that don't innovate and compete in tech will lose their market share and relevance

Companies that took the leading position in the retail market pay strong attention to adaptability. They observe market dynamics, customer experiences, and rising technologies.

Retail companies that succeed in innovation and implementation of new technologies usually:
- Embrace the agile approach to work
- Test and experiment
- Share their knowledge with the community
- Make data-driven decisions
- Gather data about their customers
- Innovate with tech in the delivery sector


Huge companies and disruptors in the industry, like Amazon, are dictating the guidelines of e-commerce, not only in terms of purchase but in terms of overall shopping experience.

Amazon Go grocery cashless checkout


5. Brands compete with customer experience innovation, not through brand building

Think of CX as the touchpoints with the customer. Every step of the journey is equally important. That's why businesses should evaluate every touchpoint of consumers who shop with you. Pleasant customer experience brings better revenue, positive reviews, and higher retention rates. In contrast, a poor customer experience leads to quite the opposite.

Pleasant experiences encourage better revenue, positive reviews, and lifelong customers. In contrast, a poor customer experience (CX) leads to the opposite.

One way you could improve customer experience is by narrowing the decision for them by not offering them too many options. It might seem contra-intuitive, but offering too many options may lead to indecisiveness and confusion in customers.

There are many proofs of that thesis, but maybe most interesting is research from 2000 by psychologists Sheena Iyengar and Mark Lepper:

"On one day, shoppers at an upscale food market saw a display table with 24 varieties of gourmet jam. Those who sampled the spreads received a coupon for $1 off any jam. On another day, shoppers saw a similar table, except that only six jam varieties were on display. The large display attracted more interest than the small one. But when the time came to purchase, people who saw the large display were one-tenth as likely to buy as people who saw the small display."

Customers care less about huge assortment and more about availability. With the second lockdown still in force in some countries like the United Kingdom, "non-essential" stores needed to close their doors. For customers, that meant going online to purchase "non-essential" items. That way, online-business had a clear advantage.

6. Tech companies are driving the distribution trends

It is a good idea for some companies to invest in vertical distribution since it enables them to effectively replace intermediaries in the distribution channel and control the distribution channel. This approach will also result in a vertical marketing system that strengthens the product strategy.

For example, a direct webshop that will sell your brand product and gather various data about your customers will be crucial for your brand to compete in the next 5-10 years.

The decision to remove intermediaries will depend on many factors, including the type of the product being sold, expertise in managing customers' demands, necessary investments, and expected costs. Removing intermediaries is a delicate decision because saving money doesn't necessarily mean that the whole business will benefit. An unsatisfactory delivery system can negatively affect customers and ruin all temporary financial benefits soon.

For example, Nike decided that it will no longer sell its products directly on Amazon and have chosen to control the distribution by selling on its website.

Nike decided to sell directly and not trough Amazon

Vertical distribution is probably better for experienced financially strong companies and companies with a widely recognized niche specialty. They have means, expertise, and a stable customer base for doing business this way efficiently.

7. Utilize big data to make better decisions and improve customer experience

Advanced analytics tools, such as predictive algorithms, will allow companies to understand their business and user needs better. New business intelligence tools and improvements in data literacy levels will lead to the generation of business insights.

Retailers need to increasingly leverage data and analytics to identify their most profitable stores, configurations, and products and, based on this, make some important decisions.

Big data can offer personalized experiences

For example, Amazon, ASOS, and Zalando, the industry data leaders, are great at collecting a large amount of customer data. That allows them to create a sticky shopping experience by increasing the value of the product that customers regularly use. They also have huge financial resources, which allows them to invest in technology far more than the other companies.

SuperSuper agency can help your brand to setup an customer experience measuring system and improve customer experience. Please contact us here, let's talk.


8. Sustainability of the supply chain and emphasis on ethical values

Brands are differentiating and gaining customer loyalty based on values and ethical marketing. Sales tricks and sneaky tactics will only bring short term results but destroy your reputation and retention. The goal is to offer the customer a solution that balances sales tactics and long term values.

COVID-19 crisis exposed weaknesses that can be migrated by diversifying supply or improving local manufacturing. The delay in chain supply made a lot of businesses rethink their overall business organization.

In retail, there has been a huge rise of ethical brands. Retailers of all sizes are jumping on the "green" bandwagon. There is a way to sell fashionable clothing and accessories that don't destroy the environment, endanger workers, or cause suffering to animals.

CIF offered sustainable cleaning products on UK market


9. Brands who win obsess over the customer experience

Consumers today are demanding more out of the customer experience. Identifying their ever-evolving needs and offering proactive solutions in a timely manner is a new norm. The communication isn't one-sided anymore, and companies are actually listening to what customers want and what they can improve.

Customer experience is everywhere, from your website, checkout, customer support to social media. If you don't remove friction from it, you'll quickly start losing customers. Asos, one of the biggest names in online fashion e-commerce, recently tweeted, asking their customers what they want to see in their app. Interestingly, customers wanted reviews because people trust other people. Talking and listening to your customers is a way to create a better experience for them. This is the only way to drive loyalty and advocacy (and revenue) in an increasingly competitive world in which CX is your only true differentiator.

Screenshot from Amazon.jobs



What actions are the biggest brands taking to improve customer experience?
They're stepping in the shoes of the customer.
If you try to see your business from the customer's perspective, it will improve the overall customer experience. The story goes that even Jeff Bezos, the CEO of Amazon, has done this in the past. He called Amazon's customer support after his VP of Customer Service assured him that call waiting times were less than a minute. Bezos and his VP of Customer Service, anxiously watching on, were made to wait for almost 5 minutes. After this, they made immediate changes to the business.

They're transparent
Customers want to know how their data is stored and used. Transparency in the digital age is one of the most important and pressing customer experience trends. Being highly transparent in terms of advertisement, pricing, business practices, etc. can help build and maintain trust with your consumers.
Revolut, one of the biggest fintech companies in Europe, very openly communicated about the changes of their data-centers location after Brexit.

Simplifying the shopping experience
One example of this is the 'Order & Pay' function in the Starbucks app. This feature allows people to order and pay for their coffee all from their phone. Then, when they get to their local Starbucks, they can simply walk to the pickup area, grab their freshly made coffee, and continue with the rest of their day.

SuperSuper agency can help your brand to identify customer-centric opportunities and improve customer experience. Please contact us here, let's talk.

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