Agile retailers will thrive in 2021 as revenge consumption kicks in
The coronavirus outbreak has resulted in a remarkable acceleration of e-commerce across all demographics.
Online will continue to grow this year, but at much slower rates than in 2020, according to Martin Newman. founder of The Customer First Group and a member of the 2020 RTIH Innovation Awards judging panel.
“I anticipate that growth will be back in the area of 10% to 15% down from the giddy heights of 100% plus for many brands in 2020,” he says in a LinkedIn post.
“As a percentage of retail sales, online will account for around 28% of total retail by the year end and online grocery around 16% to 17%.”
As the UK enters a third coronavirus lockdown, Newman believes that we're on track for a better year and that, aided by mass vaccination, the second half of 2021 will be a lot more like the old normal than the new normal.
“Having witnessed such high street casualties as Arcadia, Debenhams, Bon Marche, Edinburgh Woollen Mill, and Peacocks, it’s hard to imagine that more once great retail businesses won’t go to the wall in 2021,“ he comments.
“Retailers with an imbalance in store count versus digital, with some rare exceptions such as Primark, are likely to need life support.”
However, those who have the agility in their supply chains and a strong focus on digital and in-store experiences can do well.
“As we’re going to over-index in categories where Covid-19 has robbed us of the opportunity to participate. 2021 will be an era of what I’d call ‘revenge consumption.’ Our opportunity as consumers to make up for lost time.”
Weddings, barmitzvahs, Wimbledon, football, The Open, theatres, gigs, clubbing, comedy, cinemas, days out, and international travel will all make a spectacular comeback, particularly in the second half of 2021.
This will drive demand for formal wear, spring/summer and autumn/winter fashion, holiday wear and so on. All the categories that really suffered during the pandemic.
In contrast, sectors that performed really well from a demand perspective such as grocery, DIY, homewares, electricals, home exercise equipment, coffee machines etc will soften from early summer as Brits spend a lot more time being out and about.
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