2020 has been a tough year for a lot of sectors and retail has been one that the coronavirus pandemic has affected most. We have seen a veritable blood-bath on the high street as consumers stay away from shopping malls in their droves – we have recently witnessed the demise of Arcadia (Top Shop, Dorothy Perkins etc.) and Debenhams, which was caught up in Arcadia’s maelstrom. And even the high street stalwarts are unsurprisingly suffering.
More than most, retailers will be glad of the opportunity to sing Ol Lang Syne and put 2020 behind them. So, what’s on the horizon for next year? Which are the trends and themes that will affect retailers the most? Here’s a few that top our list…
- Opportunity: this might go against the grain of a lot of the doom-mongering, but it’s true that in times of adversity, opportunity beckons. Obviously, the current status quo brings a lot of challenges. But some retailers are seeing glimmers of hope – their businesses aren’t just surviving, but thriving. Being agile, adaptive and responsive to changing needs has paid dividends. For forward looking retailers, every day is a new day and with it should bring a mindset of can-do, product/service innovation, execution-excellence and newness. 2021 will be a key differentiator for those who get it right.
- Digital acceleration: the pandemic has accelerated consumers’ propensity for e-commerce, and unsurprisingly it’s hit an all-time high during the many lockdowns, with statistics showing online shopping is continuing to burgeon. With this surge comes the need for retailers to accelerate digital initiatives – ways to optimise their omni-channel strategy, or using AI (artificial intelligence) to analyse data mined from sources like social media to make the shopping experience easy and personalised. Visual search and social shopping is another digital trend. It also requires retailers to be ‘geared-up’ internally to deliver more, more quickly, which is where our Pragmatic Agile approach has been so successful for some of our retail clients.
- Traceability: the intentions of many retailers are noble, but there are significant headwinds when it comes to traceability. This covers clarity and certainty on product ingredients, source materials, manufacturing / production processes, procurement and labour conditions. The increasing demands from customers as well as regulatory and legislative bodies will continue to drive change in this space next year and beyond.
- Change whilst keeping the lights on: maintaining retailers’ IT ecosystems whilst undergoing change is tough. Given the prevalence of cloud initiatives and ‘on-prem’, ‘off-prem’ projects, this is difficult for any IT director, but especially for those with complex technical estates. And the rise in online fraud and cyber-attacks is exacerbating the situation. Keeping the plates spinning – and all your customers happy – is more important than ever in 2021.
- Supply chain angst: Brexit will upset the supply chain apple cart from the start of 2021, with retailers dealing with different jurisdictions, customs, delays in logistics etc. Retailers will be unpicking what the new regime means and how it will affect their supply chains. And the pandemic has led to additional pressure – sourcing raw materials, manufacturing capability and distribution have all been disrupted. Retailers importing goods have mitigated risk through measures such as switching to air freight from ocean freight, but this means their profitability has taken a hit. Supply chain challenges show no signs of abating in 2021.
All in all, we will be glad to see the back of 2020, but we have all learned some important lessons. For those retailers facing challenges head-on in 2021, a key success factor will be to right-size and upskill their workforce, have the best change management procedures in place and objectively assess business readiness for the obstacles and opportunities that lay ahead.
At P2 helping our clients to respond to and solve these challenges is what makes us tick. If your business is encountering similar challenges and you’d like to speak to us about how we can help, please get in touch.