A new report has defined five key areas bricks and mortar retailers can focus on in a bid to improve the bottom line as the COVID recovery for the retail sector increases in momentum.

Artificial Intelligence company Olvin recently released their ‘Retail Statistics, Trends, and Forecasts For 2021’, noting there is exciting opportunity for real-world retail in the years ahead, but only if they capitalise on lessons learned in 2020.

Here’s an insight into what they found…

The fallout from 2020

The road ahead

The retail sector rebounded over the holiday season with record spending also extending into Valentine’s Day and Easter.

That said, Olvin notes around 40 per cent of Americans don’t expect their finances to return to normal until late 2021 or even 2022 and beyond.

Despite this, there is a widespread sense of optimism in the recovery of the economy. Forty-one per cent of people in the US said they were optimistic about the economic future.

And, as a result, 12,200 stores have revised their plans to close.

But how can retailers maximise that optimism and translate it to the opportunity ahead?

Bricks and mortar potential

Olvin said despite a tough 2020, there is hope for the future of real-world retail based on the recent resurgence in both sales and optimism.

But they note it will centre around four key trends emerging post-COVID.

A focus on the consumer

More than ever before, the customer experience will be critical in the months ahead.

“Knowing your customers might be one of the first rules of retail, but after setting up, many businesses lose sight of what their customers want…,” Olvin said.

Ethical activity

The conscious consumer has steadily been shaping retail in recent years. The period ahead sees this trend likely to strengthen.

“The increase in the amount of information that is available about companies means that consumers are also becoming increasingly conscious of the power their purchases have,” Olvin said.

“Customers are not only choosing the products they buy much more consciously, but they are also deciding which businesses they are prepared to buy from much more carefully too.”

Cost-cutting

The retail bottom line is increasingly becoming the differentiator between the stores that thrive and those who fail to survive. And shoring up this bottom line through cost-cutting is essential.

“To remain competitive, retailers are likely to be cutting their costs significantly in 2021 – and will need to do so while keeping the right balance with their ethical credentials,” Olvin noted.

Creative use of space

The traditional bricks and mortar could well be a thing of the past, with retailers reconsidering exactly how they utilise their physical real estate.

That’s seeing an increase in alternative uses of retail space, whether it’s a dispatch outlet, an immersive experience, coffee outlets, or in-store recycling facilities.

The final word

When it comes to where people intend to purchase their Easter-related items, discount stores are the most popular choice, with 43 per cent of survey respondents noting they intended to shop there.

Discount stores are followed by:

• Department stores – 35 per cent.

• Online – 35 per cent (the highest percentage in the survey’s history and up from 28 per cent last year).

• Specialty stores – 23 per cent.

• Small businesses or local stores – 23 per cent.

Meanwhile, as vaccination rates increase, celebrations are also on the rise.

The National Retail Federation has released its retail sales predictions for 2021 and, based on the results of last year combined with a vaccine rollout, it’s more optimistic than expected.

In 2021, the NRF anticipates retail sales will grow between 6.5 percent and 8.2 percent to more than $4.33 trillion as more individuals get vaccinated and the economy reopens.

So, let’s recap their findings and look to the year ahead.

The tally for 2020

Despite a year tarnished by political upheaval and a deadly global pandemic, early results show retail sales in 2020 performed better than expected.

The NRF notes throughout the year retail sales grew 6.7 percent in 2019 to $4.06 trillion, nearly doubling the NRF’s forecast of at least 3.5 per cent growth.

They explain their initial prediction did not account for the impact of a global pandemic and the figure was well beyond the 3.9 percent growth enjoyed in 2019.

“Online and other non-store sales, which are included in the total figure, skyrocketed to 21.9 percent at $969.4 billion as consumers shifted to e-commerce,” they continued.

It’s important to note these numbers exclude automobile dealers, gasoline stations and restaurants, the latter of which were hit particularly hard last year due to shutdowns across the country.

The holiday sales surge

Meanwhile, it was the holiday period that accounted for much of the retail sector’s sales surge.

“The 2020 November-December holiday season accounted for nearly one-fifth (19.4 percent) of overall annual retail sales,” the NRF remarked.

“Retail sales during this period grew an unexpectedly high 8 percent to $787.1 billion. Non-store and other online sales represented $206.9 billion of total holiday sales, up 22.6 percent over the year before.”

The forecast for 2021

With a better-than-expected 2020 under its belt, the NRF says retail sales are predicted to continue to surge in 2021.

Due to the vaccine rollout and increased consumer confidence, the NRF currently predicts:

• retail sales will total between $4.33 trillion and $4.4 trillion.
• Online sales, which are included in the total, are expected to grow between 18 percent and 23 percent to between $1.14 trillion and $1.19 trillion.

Increased employment is also tipped to contribute to the predicted surge, with the NRF expecting the overall economy will gain between 220,000 and 300,000 jobs per month in 2021, depending on the pace of the overall economy in the second and third quarters.

“Despite the economy’s stalled momentum at the end of last year, NRF forecasts real GDP growth between 4.5 percent and 5.0 percent,” they noted.

Optimism and relief

NRF President and CEO Matthew Shay welcomed the positive forecast, noting a range of factors contributed to the expected retail growth.

“Despite the continuing health and economic challenges COVID-19 presents, we are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” Mr Shay said.

“From the outset of the pandemic, retailers have gone above and beyond even the most conservative safety guidelines to protect and serve their associates and consumers alike.

“Retailers are increasingly engaged in working with federal, state and local health officials to distribute and administer the vaccine. This partnership has been key to our economic health throughout the pandemic and will continue this year.”

Meanwhile, NRF Chief Economist Jack Kleinhenz said the vaccine rollout could see the economy accelerate at the fastest rate in more than 20 years.

“Our principal assumption is that the vaccination will be effective and permits accelerated growth during the mid-year. The economy is expected to see its fastest growth in over two decades.”

Mr Kleinhenz further noted this year marks the second year of savings, record-high stock valuations, increased home prices, enhanced government support and record low-interest rates, which are all contributing factors towards the economy and consumer spending behavior.

For more information on the retail trends of 2021, see here, or view our range of security tags and labels to secure your store in advance of the expected surge here.

With retail beginning to settle back into its new normal and consumer spending on the increase, attention is turning to getting back to business and boosting the bottom line.

The key to protecting that bottom line is loss prevention, but with a new landscape come new challenges.

Here are five loss prevention challenges the retail sector will be looking to address throughout 2021.

Control versus convenience

An increased focus on omnichannel and strategies like buy online pickup in-store (BOPIS) means control of stock and products now has to be carefully weighed against consumer convenience.

That makes visibility key when it comes to inventory control.

Improved inventory visibility might include:

• Item tracking via RFID.

• A focus on loss prevention such as electronic article surveillance to reduce out-of-stock events.

• Improved data and analytics for accurate insight into stock levels.

Truth is inventory accuracy has always been a major factor in loss prevention, with human error, fraud, and theft all undermining a store’s ability to keep track of its stock.

As trends like BOPIS and omnichannel are set to stay, this accuracy and control are now more important than ever.

Customer interaction

With retail foot traffic still lower than in years gone by, bricks and mortar is looking to play to its strength of allowing customers to touch, try, feel and interact with products.

Again, this requires a fine balance of allowing customers access to products while also ensuring these items are protected against theft.

Meanwhile, enticing displays are becoming a priority as retailers seek to find more ways to lure potential customers into their outlets.

So how can you protect products, while still guarding them against shoplifting and theft?

Loss prevention methods include:

• Product-based security measures including security tags and labels.

• Lockable glass cabinets.

• Alarmed and tethered displays for products like electronics.

• Good store layout.

• Staff education and training.

Supply chain accountability

Securing the supply chain continues to be key to mitigating retail loss. This has become increasingly important in the past 12 months due to the shipment and manufacturing delays that have occurred over the past year.

The upshot is, store management now requires greater supply chain accountability to ensure the products that are on order are traced and ticked off when they arrive.

Tools like RFID, which offers 99.9 percent supply chain accuracy can assist.

Remote insight

With remote working still very much on the agenda and travel fairly limited, remote insight into a store’s operation including its sales, revenue and loss is a continuing priority for store management.

That’s where tools like mPOS, cloud-based analytics, and inventory tracking methods like RFID are coming into play, allowing retail management remote insight into the operation of one outlet or a chain of stores.

Staff safety

Between protests, riots, and health fears, staff safety remains a major priority for all retailers. Although necessary, safety focus does have an impact on loss prevention, with staff often at the frontline when it comes to identifying loss and theft.

As a result, loss prevention tools and technology will play an increasingly important role in the fight against shoplifting, theft, and miscellaneous loss.

To learn more about trends shaping the retail landscape in 2021, see here. Alternatively, you can order your security tags and labels directly here.

The National Retail Federation has just concluded the first instalment of Retail’s Big Show for 2021, and this year the event looked very different to years gone by.

Held virtually, the show was divided into two ‘chapters’, with the first held in January and the second to commence in June.

Despite its online venue, the event packed all the punch of previous years with a specific focus on the immediate needs facing retailers today and featured curated sessions, networking programmes and a virtual expo.

With its focus on moving forward together as an industry, here are five takeaways from Chapter 1 of Retail’s Big Show.

The future pulled forward

In a session on ‘Technologies Shaping the Store of 2025’, panellists noted the pandemic had “pulled the future forward”, accelerating adoption of e-commerce.

However, consumers still want curation, personal guidance and authentic connection, regardless of how they shop.

“In the world of commerce, the things we thought we would see in 2030 are now things that we’re seeing today,” Shopify director of product, retail, Arpan Podduturi, explained.

Meanwhile, head of global retail operations at Allbirds, Travis Boyce, noted the role of bricks and mortar was transforming into a hub where shoppers could fulfil needs like buying online and returning in store or engage in events as retail and communities begin to open back up.

It’s all about the show

Luxury retailer Saks Fifth Avenue was among the stores represented in a chat focused on re-imagining retail, with CEO Marc Metrick also agreeing the events of2020 had provided an accelerant for change.

However, he also added that in the case of luxury bricks and mortar retail physical stores continue to be important.

“For luxury, especially, it’s the theatre: People want to see the show,” he said, and since Saks reopened its stores, they have been performing only slightly below 2019 levels.

Better catering to the product cycle

Another thing Saks observed in 2020 was that in the future they could better cater to the product cycle.

For example, their seasonal ranges usually arrive almost six months prior to the season beginning and then the shop needs to push the product. In 2020, stores were closed in the early half of the year and then reopened in May.

“When the customers arrived, guess what was in the stores? Summer product,” Mr Metrick said.

“It had been on the floors since February, but this was the first time they’d seen it. We didn’t have to push it or promote it. It just sold, because we were meeting the customer’s needs.”

The significance of sustainability

A session involving IKEA and H&M representatives looked at whether sustainable purchasing habits changed as a result of 2020.

After years of an increasing shift to more socially and environmentally aware purchasing, the customer’s commitment to ethical retailing was not impacted by COVID-19, both retailers noted.

However, their budget tended to be smaller and the product focus changed to align with the new normal. They also explained that Gen-Z continued to lead the socially conscious push and had a huge demand for information about products.

“Having grown up as digital natives they understand — maybe better than any preceding generation — how to access information,” H&M US sustainability manager Abigail Kammerzell noted.

“And they’re really demanding about it. They want to know where our clothing is made and out of what, what the social implications of that are, and what’s the responsibility of the consumer once they’re done with it.

“On top of that, Gen Z has definite expectations about what a business is: It’s not just here to provide an item, it’s also here to improve the society and community in which it operates.”

All round excellence

It’s not enough for a retailer to excel in one area, they need to be excellent all-rounders. That was the message from Wayfair CEO Niraj Shah, who noted what “you’re not good at limits your growth and being great in other areas doesn’t make up for it”.

As an online retailer focussed on furniture, Mr Shah explained for his company that involved a focus on both merchandising and logistics.

But most importantly it involved intimately understanding exactly what a customer needs, and then drawing on tools like technology to meet those requirements.

Lowe’s CEO Marvin Ellison agreed, explaining the true role of technology was to deliver a better customer experience.

“As we look to the future, we ask one single question: What is in the best interest of our customers?

“The most effective technology is a technology that no one sees. All the customer knows is that the transaction was easy. All the associates and supply people know is that the system works well.

“And that,” Mr Ellison said, “is what good innovation looks like.”

The first chapter of Retail’s Big Show ran over various dates from January 12 while the second chapter will commence in June. Further information about the event is available at the National Retail Federation.

2020 proved a watershed year for the US retail sector, with brands required to quickly pivot and adapt in the face a global pandemic and the Black Lives Matter social movement.

As a result, a raft of changes were introduced, including contactless retail, and an upswing in online ordering and curbside pickup, while retailers were also called on to stand up and deliver on social values.

So, as we exit 2020, what are the retail trends that will translate into 2021?

Protecting the bottom line

Protecting the bottom line has been paramount in 2020, and this will continue into the coming year. Despite some rallying in recent times, US consumer confidence hit a four-month low in December and the road ahead looks equally rocky.

For retailers that means they need to protect the bottom line with a clear understanding of their numbers, and solid policies and future plans.

Part of securing that bottom line is about protecting a retail outlet against loss. In 2020, US retail loss hit an all-time high, costing the sector an astounding $61.7 billion with profits literally walking out the door due to shoplifters, employee theft, human error, and miscellaneous loss.

Now is the time for retailers to plug that leak, taking a good hard look at their loss prevention strategies and how to improve them.

Contactless and convenient

Customer convenience has been key to the retail sector surviving and, in some instances thriving, in 2020. After all, this was the year that saw Buy Online Pick Up Instore (BOPIS) and online retail enjoy a major upswing in adoption.

The year ahead will see the demand for convenience continue, with the customer expecting to effortlessly navigate between the real-world and online retail environments.

Meanwhile, contactless retail will remain a priority, with stores continuing to implement strategies like contactless payments, contactless delivery, and contactless curbside pickup.

Communication critical

Communication has been critical throughout 2020 in a year when the Covid landscape kept changing.

In fact Forbes recently noted consumers actually trusted the information from the business more than they trusted their own government in the US over the course of the year.

This communication will continue to be an expectation. The bar has been raised, customers rewarded business for their efforts and now they will settle for nothing less than a credible, consistent two-way conversation using the medium that best suits them.

Social values imperative

This was also a year when retailers were judged by their social values, how well they communicated them and then how effectively they matched their actions with their brand promise.

Earlier this year, Harvard Business Review explained Covid had put business’ social values to the test like never before, and many consumers looked to the corporate world to see how they handled both customers and staff during the pandemic.

Meanwhile, Forbes noted 71 per cent of consumers said they would lose trust in a brand forever if they were perceived to be putting profit before people.

In the coming year, that trend will undoubtedly continue, with consumers placing increased pressure on brands to align their social values with their image and take action that supports that commitment.

Empowering staff

The human factor continues to be real-world retail’s greatest asset with staff at the frontline of the retail experience.

These valued members of the retail team need to be empowered to do their job efficiently and effectively with tools that allow them to tap into the knowledge and offer superior customer service.

Among the tools available to assist are things like mobile Point of Sale, along with creative product displays and little things like smart keys which enable them to be more efficient.

Together, these allow staff to better cater to their customer at a time when it’s never been more important to go above and beyond the customer expectation.

You can find out more about how the retail landscape is changing, and how we can assist with protecting your bottom line here. Or you can shop directly for security tags here, and security labels here.