While 2020 may have shown us that you never know what to expect, it also demonstrated the power of a retail connection, the importance of brand loyalty and overall, the necessity of both offline and online marketing to combat the high volumes of competition today.
Scrolling through the news over the last few weeks, we have heard from Wall Street Journal, Forbes, National Retail Federation (NRF), CNBC, and others about what’s to come. While they’ve each given us a lot to think about, we want to offer the Media Horizons take now that we are a few weeks into the New Year. Here are five trends to keep top-of-mind in 2021.
1. The DTC Effect
While the DTC influx may have caught us by storm in 2019, success continued well into 2020. As some of the original players (enter: Allbirds and Casper) started to introduce new products, others focused on the customer experience (like Stitch Fix, Glossier and Peloton) (source: NRF).
We believe that this is just the beginning with DTC. In fact, DTC has largely stayed the same the last few years and in doing so, actually changed consumer behavior…and expectations.
2. Changing Consumer Behavior
Consumer confidence changes month to month. In fact, it weakened in Q4 2020 (source: The Conference Board). Throughout the pandemic, consumers continued to need and want retail products, but were restricted to their homes. This resulted in new interests, changed purchase behavior and updated expectations in terms of experience and delivery. As we head into 2021, we expect changing consumer behavior to be fluid with consumers demanding more from brands, especially for mid and high-ticket buyers.
3. Innovation and Implementation
Availability, accuracy, quality, and speed have always been focal points for consumers, and the pandemic has shifted people’s perspectives even more. Nowadays, receiving the mail is an exciting event. Customers anxiously await their latest order or a catalog offering a promo. From BOPIS to contactless purchases to AR, the consumer wants more.
Last month, Industry Dive reported that companies are using this time to grow from within by implementing new digital interfaces, tools and data like DMPs, CDPs and POS systems. Leading retailers – Walmart, Target, Kroger, Home Depot, Best Buy – showed triple-digit growth in online sales (source: Retail Dive). We leave you with this: “leading physical retailers’ digital businesses have advanced five to 10 years with this structural shift” (source: Retail Dive).
4. Media Consumption
Don’t ask me how many shows and movies I’ve streamed in the pandemic! I used to travel at least 25% of the time and view the occasional show on my iPad during a flight. Now, I watch a new movie using my surround sound on my home TV. We are all consuming media in different ways than we were pre-2020. Whether it be someone who used to commute 10+ hours per week on public transportation; changed jobs; relocated; caring for kids; adopted a pet, how we consume media will continue to evolve in 2021 and beyond. Specifically, we are looking forward to how Connected TV, AI, AR and VR will further impact behavior.
5. Category Expansion (and Collapse)
From beauty/skincare to apparel and footwear, to athleisure and athletic equipment, to luxury, to pet goods, to online grocery, to technological equipment and home décor (to name a few!), many industries experienced successes last year. For reference, small animal supplies went up 274% in 2020. Outdoor furniture rose 428% and video game usage increased 75% (source: Criteo, Verizon).
We predict that crafting will continue to be hot along with books, baking, cooking, and home improvement. Unfortunately, the success that some brands are experiencing is at the expense of other industries. Those to watch include food service, travel (including equipment and accessories) and entertainment. Stay tuned for our upcoming more detailed blog post about hot retail segments this year.
As marketers, we rely on data to identify trends. Most often, we trust past data for future predictions. As we all know, these are unprecedented times in a whole new era. While a lot of it is uncomfortable and scary, we prefer to look at the bright side that the opportunity for innovation, invention, efficiency and growth are all at our fingertips. In fact, we believe the options are endless and often highly profitable.