6 trends for the future of retail

The disruption caused by the Covid-19 pandemic is well documented by now. Changes in lifestyle, consumer habits and shopping priorities which would typically take place over years transformed retail in a matter of weeks. As the Covid recovery begins, the sector will be looking to the future to identify the trends that will have a lasting impact.

1. Cash is out – mobile and contactless payments are in

Throughout the pandemic, consumers have been urged to to use contactless payments versus cash, causing cash usage to drop by 35% in 2020, according to data from UK Finance. Physical money was used to make 6.1 billion payments in the UK, or just 17% of all transactions, while contactless card payments accounted for 27% – up from just 7% four years ago.

Mobile payments also saw a sharp rise in 2020, especially among 16 to 34-year-olds. The number of UK adults registered to make mobile payments rose to nearly a third of the population.

2. Consumer needs are continuing to change quickly

A report by Google on the future of retail named ‘dynamic demand’ as one of the purchasing behaviours that has stuck around throughout the pandemic. “People’s buying patterns will continue to change as they react to unpredictability,” it said.

According to the company, 15% of the search queries it fields every day are brand new, and retailers will need to be ready to anticipate these changing needs by keeping a close eye on consumer trends.

3. Omnichannel shopping has arrived

According to Google’s report, consumers are spending more time online searching for ideas and inspiration around what to buy. Searches on Google Images for ‘unique gifts for’ have grown globally by more than 100% year-on-year, and 81% of consumers around the world said they discovered new brands online during the pandemic, proving the importance of having a digital presence in today’s market.

Online shopping exploded during the pandemic, and a 2021 report by KPMG said that e-commerce retail sales are expected to increase by almost 17% per year by 2024. Whether shoppers are searching online before visiting physical stores or buying online for click and collect pickup, retailers that can manage an online shop are set to benefit.

4. The rise of the retail experience

Although online shopping is here to stay, a bricks and mortar revival is expected as shoppers seek out the much missed experience of shopping.

Of the recent rise in retail footfall, Nick Brackenbury of retail tech firm NearSt told us, “People want to get back out and shop, and many have saved a great deal over the lockdown that they’re now looking to spend. I think people have really missed the ability to be both inspired and surprised by what’s in their local stores, and the social shopping experience that comes with it.”

KPMG’s report stressed the importance of the shopping experience as well: “Customers are now engaging with retailers beyond the traditional transaction, forcing retailers to focus on delivering more tailored, seamless, responsive and consistent customer experiences. In particular, customers are looking for more immersive and more unique experiences from their retailers.”

5. Convenience is back

Although the pandemic slowed the pace of life for many, consumers’ schedules are filling up once again, meaning convenience will be a top priority. “Consumers want to know what they can expect before heading into stores, especially around inventory and business hours,” Google’s report found. Over the past year, searches for ‘in stock’ soared by more than 700%, while ‘available near me’ grew by 100%.

KPMG agreed that convenience is a key driver of consumption. “Consumers have less ‘free time’ and are therefore looking for seamless experiences they can use anytime, anyhow and anywhere,” its report said.

6. Ethical consumption is here to stay

“People will continue to be more discerning about how and where they spend their money,” Google said. The group expects ‘value’ will be replaced by ‘values’ as a product’s perceived value will be less about its price point and more about its alignment with a buyer’s values. Indeed, searches for ‘ethical online shopping’ soared by 600% year-on-year.

Consumers are increasingly aware of retailers’ priorities, KPMG’s report added. “Those who demonstrate the right behaviour while ensuring their purpose is aligned with customers’ values and expectations will hold a strong position.”

While fine food retail faces a future full of new shopping habits and preferences, from conscious consumption to experiential shopping, there are increasingly opportunities to build on the successes of the last year and identify new ways to attract today’s customers.