David Lloyd, general manager for the UK, Nordics and Netherlands at Alibaba Group outlines three key trends which he believes will shape the retail sector in 2021
Platforms must become destinations
The pandemic has accelerated the move to online and shifted consumer shopping psychology. We know that people are going to continue to spend more time online, so platforms – whatever their origins – need to work out how to make that time more enjoyable and valuable for consumers, in order to win their attention and their business not just once, but repeatedly. With social restrictions in place, shopping is no longer just about the transaction and the product but a form of entertainment, and even a social occasion. Price, proposition, range, and delivery are all important and that’s not going to change, but these are now table stakes for an online business. To earn their status as a destination, retailers will need to raise their digital game and offer something more, finding new and innovative ways to connect and engage with customers. Technologies such as AR and livestreaming will have a key role to play in turning shoppers into fans. With this focus on the consumer, lines will continue to blur between shopping, social and entertainment, which presents a huge opportunity for those that get it right.
Offline retail will digitise to combine the best of both worlds
Despite the significant shift to online shopping, there is still a role for physical stores in the shopping experience. While online is learning from physical retail to become more engaging and human, there is much that offline can learn from online, as retailers look to combine the best of both worlds. In a store, this could include allowing customers to view product information by scanning a QR code on their phones or arranging for their orders to be delivered directly to their homes. Or from an experiential perspective, cooking groceries for customers to try on the spot, or providing interactive augmented reality applications to “try on” clothes and make up. This tactile, immersive, experiential shopping can be underpinned by real-time inventory management and price changes.
Livestreaming takes centre stage
Livestreaming was already extremely popular amongst Chinese consumers prior to this year, and we’ve seen it really start to hit the mainstream over the course of 2020. This can be not only an effective way to offset slower footfall, but a powerful marketing tool to inspire and connect with people. Prompted by necessity, we can expect to see this trend really gather pace next year and beyond. With this, we’ll see an increasing role for influencer and celebrity partnerships, as well as retailers training up their own store teams to broadcast from stores, or even from their own homes. We’ll see this not only from retailers, but from tourist destinations and sites of interest, as they look to maintain a connection with consumers while in-person visits may be restricted.