2020 has been a challenging year for the world of commerce: stores had to remain closed for months, consumers were stuck at home during extensive lockdowns and many B2B buyers had to pause their traditional marketing efforts. As we look ahead to 2021, Bloomreach CEO and Co-founder Raj K. De Datta shares his predictions about the retail industry in the next 12 months.
What do you expect to be the legacy of COVID in the retail industry in 2021?
Raj: I think 2021, unfortunately, still looks a lot like 2020, where we'll have fits and starts and people who are vaccinated and people who are not until we reach the point where we can get at least 75-80% of the population vaccinated. Then, if we can start to get out there and have confidence in our health, I think brick-and-mortar retail will start to come back, but not to the way it was. I think it will come back to a new way which is “digital-first”, where physical locations are diminished from pre-pandemic levels. People will still want to get out, go to stores, and go to see things and places.
I also think certain retailers will win big and will have established themselves in the minds of consumers, much more prevalently than they had in the past, while others will fall away. But I think we will have trained a completely different generation of people and businesses in various categories to operate online first. You can see those changes in grocery, for example, or automotive. People will still buy groceries and cars online. We’ll also have educated an entire generation, especially above a certain age demographic, who had previously shopped only in-store, that they can shop online and have the confidence to do so going forward.
Is there still a place for brick-and-mortar stores in a post-COVID world? If so, what would they look like (i.e. use of the space, role of the sales assistant)?
Raj: The store may be more of a warehouse, and some of the space in certain less pricey locations will be used to stock inventory, versus to be used as a showroom. And certain other spaces will be more like entertainment spaces as you can buy those same products online and it can be shipped from anywhere. Whether it’s more entertainment-oriented or supply chain oriented, the space will reflect those choices. Whatever choices the retailer makes to compete will determine how the space will look.
People will expect a high degree of knowledge from retail associates. There may not be quite as many retail associates, but the ones who are there will not be asked “where can I find XYZ product right now?” Because buyers may ask an in-store retail associate what they can’t figure out online. Physical retail stores will be expected to deliver an Apple Genius Bar type of experience. So there may be fewer retail associates but I think it'll be a lot more knowledge.
Will we see the market constrict and focus on large players, or is there still room for a boutique approach?
Raj: Well, outside of larger B2C and B2B enterprises, I think there's certainly room for a boutique approach. The future of retail is marketplaces which require scale, and that will be the case certainly for the big boys. But, the future of retail is also brands and so the industry is seeing an explosion of small brands setting up shop online.
Are there any stories in the retail and eCommerce space that you think are underreported?
Raj: There are a number of categories of eCommerce that are under penetrated and they tend to be in the more complex B2B product sectors. We're used to buying clothes, consumer electronics, books, and so on, online, but people are not used to buying business-to-business products online - elevators, machine parts, etc. Arguably, the market size for those businesses is actually bigger than it would be for consumer retail categories. So I think we're really just scratching the surface of the huge opportunities that lie ahead for B2B companies to compete by enhancing their digital commerce experience using platforms like Bloomreach Experience Platform (brX).
What do you consider to be the pillars of a good retail and commerce strategy in 2021?
Raj: Businesses should be asking themselves these questions:
1) Are we maxing out our investment in eCommerce to remain competitive on the road ahead?
2) Are we spending it on the tech stack that helps to drive differentiation and stand out online?
3) Are we building the capabilities within our own organizations to recognize that the commerce experience is like a product, and therefore always try to figure out how it can be the best product in the eyes of our customers?
4) Do we have the people to figure that out within our own organization?
If we project ourselves five years ahead, what will the commerce landscape look like?
Raj: I think we will stop thinking about commerce as a section of the economy and start thinking about it as the economy.
What are your most provocative predictions for commerce experiences in 2021?
Raj: I predict that when we come out of the pandemic, there will be many more retailers or commerce businesses than there were before the pandemic, not fewer. That's a bit counterintuitive, but every brand on the planet is opening an online store at this point. There might be a couple of thousand retailers, but there are a couple of hundred thousand brands out there. If every one of them opens a store to try to serve you in some fashion or reach you in some fashion, there actually will be more retailers at the end of the pandemic than before. That's what I think will happen. Also, people look forward to buying clothes again, going on vacation again, going to restaurants and movie theatres again. I believe that we’ll appreciate the things around us in a way that perhaps we haven't before.
If you’d like to learn more about ways that Bloomreach can support your business in 2021, please reach out today. We look forward to hearing from you!