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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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Published:
November 8, 2020
Updated:
December 30, 2020
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Slavica Grgic

Marketing manager

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Mario Stipetic

Product design lead

Our CX research agency runs fresh and high-level community newsletter for CX related roles.

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UX Consultancy Guide for Clients

Introduction

Your customer experience team and your brand surely did not anticipate the global pandemic of 2020. The pandemic disturbed all of our experience and marketing plans. The customers have different priorities, fears, and service expectations than in 2019. We are entering 2021 and still, nobody knows exactly what can we expect next.

In this article, we will explore how the retail industry has changed during the pandemic and what trends can your retail brand can expect in 2021.

Here is the list of the following 10 retail industry trends:

  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.Recurring bundles are convenient for the customer  - It saves time and effort of going to the physical store or webshop.

Recurring bundles are also convenient for the retailer - It's much easier to budget and plan when dealing with subscriptions.
Recurring bundles have higher retention rates - Customers are committed to the subscription service in the long term.

One great example of subscription-based is HelloFresh brand. HelloFresh sends 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


Super super advice is that you offer your core product as a bundle (HelloFresh example), and not a secondary offer like Apple One. Your customers will get the most value with your core product.

SuperSuper CX agency can consult on the best customer experience Practices. Please contact us here, let's talk.


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

Today’s market is dictated by tech innovation to the same extent as the market was dictated by brand communication innovations in the 60s, 70s, and 80s.

Today, the brand building, while still important, is losing importance as the prime differentiator that attracts customers is the customer experience innovation.

Many of the world's most successful companies have problems with modifying their business to suit the new paradigm. They are often offering a complicated customer experience that is not very favorable to customers compared to some modern innovative companies.

For example in the fashion world, apps like Mr. porter, Zalando, Fatfetch, and Asos had a huge increase in sales and revenue - they do not rely on typical marketing branding at all but only on customer experience innovation.

Asos mobile app screenshot

The same examples can be found in almost any industry. In the movie industry, marketing branded tv shows and movie franchises are becoming only one of the titles in the Netflix catalog that offer superior CX and sell the products directly to the consumer.


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.

10. Retailers are embracing agile to innovate faster in the age of Covid

These are very turbulent times for retailers. There are so many things to be figured out, from delayed deliveries, limited work hours, and COVID-19, there is also an increasing need to be fast, adaptable, and agile. 

The best among retailers are, however, quickly innovating. We’ll just list some of the examples:

  • Many restaurant brands quickly launched contactless and curbside pickup. 
  • Many grocery chains completely reimagined their user experience (UX) and forged new partnerships (i.e. Glovoapp.com) to meet consumer demand.
  • Pharmacies quickly mobilized to offer prescription deliveries. 

What’s really interesting is that retailers are also changing how they work internally. The retailers are becoming more agile by designing and deploying innovations to customers far more rapidly.

Retailers today are changing at high speed to become more consumer-centric and to operate more efficiently. To achieve these ambitious goals, retailers need to fundamentally rethink their operating models. Finding the right way to organize, steer, and employ will be the key success factors over the next five years. 

What do customers want and need from their retailers?:

  • Mobile - The constantly-increasing usage of mobile phones makes it convenient and easy to shop from anywhere, at any time.
  • Instant availability and deliverability - With services like Amazon Prime, deliveries have never been faster. And customers are getting used to getting what they want ASAP.
  • They want individualization of products & services. - Customers are willing to pay an extra buck for a product that is tailored to their needs.
  • Customers care about their customer experience - Customers care about experiences, not only about products. Brands that can captivate their customers with unique experiences are leading the agile revolution.

To sum up:

This has been a year of ups and downs, and one thing is clear. The fittest will survive. Brands and retailers are adapting, implementing, and embracing new services and technologies sooner than ever. In a way, they’re adopting agile approach to work. 

Customers are starting to notice which brands are adapting to their needs and are quickly offering new services and solutions to their problems.

Those are the brands that are leading the revolution of retail as we know it.


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

Our CX research agency runs fresh and high-level community newsletter for CX related roles.

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Authors

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Slavica Grgic

Marketing manager

Slavica is a content and marketing manager with experience in SEO and inbound marketing strategy. She takes a broad view of the challenge and keeps up to date with latest trends and techniques.

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Mario Stipetic

Product design lead

Mario has worked for New York and San Francisco-based startups and large corporate companies such as ZTE. He specialize in product design solutions.

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