Louis Tozer is a senior behavioural analyst at Canvas8.

2020 saw a fundamental shift in shopping behaviours as lockdown measures pushed new audiences and businesses online. In the US, just 

 said they shopped online at least once a week in May 2019, but 43% have been using e-commerce more often since the start of the crisis. The convenient habits born during the pandemic – such as 

 – are likely to stick around, and some brands are embracing partnerships to make purchasing and delivery even more seamless. Meanwhile, others including 

 are experimenting with how to make the online retail experience more engaging.

As the world opens back up, shops will still have a role to play – albeit a shifting one. Hygiene concerns and heightened expectations for efficiency are causing brands to rethink how they facilitate shopping journeys – from 

. At the same time, economic instability and growing eco-consciousness mean that consumers are turning a critical eye to their shopping habits. In the UK, 

 are looking to alter their long-term apparel buying habits due to the pandemic, which includes buying more second-hand items. In turn, even luxury brands are embracing resale platforms like 

. And with people looking to align their purchases with their values, shopping is fast-becoming an act of solidarity – whether that’s 

After a year of mass digitisation in retail, people are going into 2021 with new and altered expectations – not only in terms of what they want to buy, but where they want to buy it. In this chapter of Canvas8’s 2021 Expert Outlook, Barbara E. Khan, a marketing professor at the Wharton School, discusses how physical stores will incorporate digital elements; Melissa Gonzalez, the CEO of the Lion’esque Group, looks at how strategic partnerships and temporary stores will help brands connect with customers; and Steve Dool, the head of brand partnerships at Depop, explains how resale communities offer a new opportunity for luxury brands to build loyalty.

Physical spaces with digital elements can ease navigation for shoppers

Barbara E. Kahn, professor of marketing at the Wharton School, University of Pennsylvania

In 2020, the biggest change, of course, has been the reliance on e-commerce. COVID-19 has accelerated the role that online plays within the shopping journey and we’ll see that sustained into 2021. Some people are reaping the rewards of the efficiency of online shopping, from home deliveries to direct-to-consumer models. We’re seeing retailers pivot to become more like warehouses so that they can handle the logistics of demand in this space. But online shopping isn’t going to be convenient for everyone – or every category – in the long term. For example, apparel is going to move more online, but definitely not 100%. People like to try on clothing, to see and feel the fabric, so the in-store experience will still matter. However, these spaces will change to incorporate digital as part of that journey.

Physical shopping will have to change and we will see a rise in omnichannel shopping and the seamless integration of online and offline. As non-essential retailers have opened up again, many are facilitating the increased demand for curb-side delivery, click-and-collect, and delivery orders. These newly-formed habits will accelerate the growth of these formats and cause a long-lasting and major change in consumer behaviour.

To make physical shopping attractive, retailers will need to focus on the customer experience. As the world slowly opens up again, we‘ll see people tire of shopping for essentials but they will care about innovative design and luxury. What’s going to get people back into stores is an amazing product, a terrific design, a great new fashion designer, some kind of high-tech innovation or product. There is no question that joy and excitement will drive people back into stores despite their online habits.

The sensory element of buying in-store remains appealing to shoppers

Brands and retailers will be tapping into these emotions by creating experiences and telling the consumer a story around their products. The items you buy, the food you eat, and the experiences you enjoy when inside a store will be more about the customer experience than the product itself. For example, in the US, there is a toy store called 

 that is about far more than simply selling toys. It creates a fun experience for children, with the idea that they may also buy toys while they are there. Other brands have turned their flagship stores into borderline museums and immersive experiences. For example, Nike’s House of Innovation in Paris takes visitors on a digitally-powered journey through the history of the brand as they travel through the physical store, giving people a unique reason to visit.

We are also seeing large brands that have traditionally used wholesalers to distribute their products pivoting to sell directly to their consumers. This facilitates customer-centred omnichannel retailing and it gives the brands the benefit of being able to harvest customer insights and data directly. They can then use this to offer omnichannel experiences at the right time and the right place to cater to customers’ needs and thus improve customer satisfaction, loyalty, and engagement. Nike is doing this by cutting out wholesalers like Amazon and instead interacting directly with its customers. This enables the brand to personalise the shopping experience and give shoppers exactly what they need when they need it.

It’s time to stop focusing on where the transaction takes place but rather where the purchasing journey starts and ends. Was it online when you first saw it being advertised? Was it on your phone when your friend shared a link with you? Was it in the car when you picked it up from a click-and-collect warehouse? Retailers need to focus on integration across all channels and hone in on the entire shopping and product engagement experience from start to end. Neiman Marcus’ Connect app does precisely this for luxury shoppers looking to personalise and plan their buying journey.

Rapid adaptation will continue to be essential for retailers going forward

Strategic alliances help brands meet and exceed customers' expectations at home

Melissa Gonzalez, CEO of the Lion’esque Group and author of 

2020 saw an increase in tactical partnerships across e-commerce. Walmart joined up with Instacart to reach customers at home, Bed Bath & Beyond is working with Shipt for same-day deliveries, and multiple beauty brands have collaborated with tech companies to offer augmented reality that enables people to test products remotely. For many, these are first-time partnerships that reflect new shopping behaviours while also demonstrating thought for the future. For example, Nordstrom announced a partnership with Balsam Hill for Christmas trees – a sales point it doesn't usually attempt. This is a first for both brands and shows how the two businesses are combining specialisms to offer a seamless experience for the customer. In 2021, stores would do well to be flexible, modular, and open to partnerships that help them fulfil new and highly specific consumer needs.

Agility is also going to be key for retailers’ survival. For example, storefront windows may cease to be for storytelling and instead do double duty as a point of pick-up. And stores may come to have no permanent fixtures, with everything interchangeable as they switch up their design to meet the changing needs of people. Single occurrences don’t drive new behaviours, but the long duration of COVID-19 means we’re seeing consumers become more demanding as they hunt out the most seamless shopping formats. With so much uncertainty, consumers' behaviours are shifting more rapidly than ever before.

The most flexible and nimble of retail experiences is the pop-up shop, which is going to see a spike in relevance in the years ahead. They may be forced to measure success differently and become less influencer- and hype-driven as large crowds and long lines will put people off during and after the pandemic. Despite this, pop-ups offer a great way to test not only products but also neighbourhoods and new store designs. With retailers and brands feeling the pinch of the economic downturn brought on by the pandemic, they are keen to cut back on permanent stores in locations where they are no longer necessary or use them to facilitate click-and-collect during busy periods or launches. Pop-ups will boost the agility of retailers or brands who only need to show up for three months of a year because of seasonality or a product launch. Consequently, we are going to see pop-ups serve a lot of these purposes.

Pop-ups offers a low-risk way to connect with customers where they are

Resale communities offer a direct line into what people want

Steve Dool, global head of brand partnerships at Depop

There's been a lot of fear and trepidation around resale as something that diminishes or undercuts traditional retail channels. However, forward-thinking brands are coming to understand that resale options can add to your brand equity. It allows people who can’t afford the full retail price to still get a piece of the brand and builds loyalty through resale communities. Recently, we've seen Gucci partner with The RealReal to sell luxury second-hand items as a way to make its products more accessible. The pandemic has made people think a lot about the choices that they make and that extends to brands. The traditional retail system was already vulnerable to changing demands, and there’s now an opportunity to explore what the industry can achieve if all parties work together to improve the sector’s sustainability credentials.

Amid the pandemic, resale has proven to be a COVID-proof market, with people continuing to sell and buy apparel on online peer-to-peer marketplaces. Our research has found that some of our users rely on us as their sole source of income or an important supplementary income stream as they feel the effects of the recession. As people have taken a step back from their pre-pandemic lives, they have been encouraged to reconsider their values and behaviours, with some giving more thought to the environmental impact of their purchasing habits. The backlash against fast fashion was already underway but it’s accelerated as people use their increased free time to do more research on what they are buying and scope out second-hand items.

Younger shoppers are interested in buying from, engaging with, and being loyal to brands who understand them, who are listening to them, and who provide a platform for their voice

Heading into 2021, we are also going to see a movement away from the classical influencer approach. Our research shows that younger Gen Z users are turning their back on influencers that promote unattainable and inaccessible luxury items that they have been gifted. The majority of younger people no longer want to live that lifestyle. Instead, younger shoppers are interested in buying from, engaging with, and being loyal to brands who understand them, who are listening to them, and who provide a platform for their voice. Given the socio-political and economic factors affecting the world as we head into 2021, brand loyalty will be driven by brands that truly understand their consumer communities and what they expect and want.

For retailers that specialise in resale items, it's important to create a safe space for fostering a sense of a community. Digital platforms and physical spaces can work as conduits between buyers and sellers and allow for organic connections between people with shared values. For brands involved, it's important not to put boundaries on the ways in which these consumers can connect as they’ll come to associate the platform and space with this community and, consequently, grow a sense of belonging and loyalty to it. With the resale market doing well during the pandemic, and with these habits expected to continue long after, these growing communities offer brands an opportunity to interact directly with their consumers, quickly discover what they want, and react to it.

Dr. Barbara Kahn is an internationally recognized scholar on brand loyalty, retail assortment, and patient decision-making. She co-authored Grocery Revolution: The New Focus on the Consumer, a book that chronicled the dramatically changing supermarket industry and outlined how consumers make choices.

Melissa Gonzalez is the CEO of the Lion’esque Group, a firm of experiential retail strategists. She is also the author of The Pop Up Paradigm, which discusses the relationship between brands and consumers in a digital world.

Steve Dool is the head of brand partnerships at Depop. Prior to joining Depop, he was a brand consultant who specialised in working with fashion and luxury brands.

Global

Shopping

How can stores lure customers post-pandemic? What’s the future of pop-ups? And how is a sense of community driving shopping journeys? In this part of the 2021 Expert Outlook, we speak to three experts about people’s varied paths to purchase and the ways they connect to retailers.

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