5 U.S. retail trends to watch in 2021

Throughout 2020, the U.S. retail industry suffered severe damage due to the COVID-19 pandemic, with a series of problems emerging one after another, including stores being forced to close, employees being laid off, and tight product supply chains. In 2021, the impact of the COVID-19 pandemic still exists, changing consumers' shopping habits while also affecting the global retail industry.

COVID-19 will change physical retail forever

The impact of the new coronavirus pandemic on physical retail can be said to be quite severe. Many well-known American retailers such as Gap Inc , Macy's , Victoria's Secret and Nordstrom have announced plans to permanently close multiple stores.

Although the US government has released some financial relief plans, their effect has been minimal. Relevant data show that the bankruptcy rate of American companies in 2020 has reached a level that has lasted for more than ten years , and these bankrupt companies are almost all offline retailers.

In contrast, due to the impact of the COVID-19 pandemic, e-commerce in the United States has grown rapidly. After filing for bankruptcy, several retailers such as JC Penney, Neiman Marcus and J. Crew announced that they would reorganize and transform online to save their company performance.

Versatile retailers reap the rewards

In 2020, retailers such as Walmart, Amazon , Target, and Costco all achieved explosive sales growth. In particular, one-stop purchasing platforms such as Walmart and Target made considerable profits in 2020.

What these companies all have in common is that they have a lot of cash and capital resources to invest in their businesses. In addition, these retailers sell a wide range of categories.

In fact, one-stop retail that sells a full range of product categories is more popular with consumers because it means they can travel less and reduce the chances of contact with potential viruses.

DTC brand model is popular among consumers

Brands that sell directly to consumers have grown in popularity over the past decade, especially during the 2020 coronavirus pandemic, which has driven some DTC retailers to record sales.

Since the start of the COVID-19 pandemic, consumers have turned to online in large numbers, ushering in new developments in the e-commerce market. Wayfair and Chewy , both DTC brands, have been increasing advertising and marketing costs, leading to record growth in their performance, especially Chewy, which has 17.8 million active customers.

This DTC model has also attracted more traditional retailers, like Nike and Under Armour, who are putting more marketing on direct-to-consumer channels to improve their profitability.

Some changes during the COVID-19 pandemic may not last

For retailers during the COVID-19 pandemic, adapting and making changes quickly means survival. Many retail stores have provided curbside pickup and contactless payment services to meet consumer needs , but these changes may not last as the COVID-19 pandemic is brought under control.

The COVID-19 pandemic has disrupted the way people experience buying clothes and cosmetics , such as virtual shopping, automatic checkout, and group video shopping platforms. But when customers return to physical stores to shop, retailers have to reimagine new experiential retail and find some sustainable ways to meet these new services.

E-commerce has both opportunities and challenges

The COVID-19 pandemic in 2020 has led to a growing share of e-commerce in the retail market. However, as a result, more and more consumers are relying more on online shopping, leading to a surge in orders, staff shortages and other problems.

There are also large-scale online transactions that have led to site crashes, package delivery delays and other problems. Survey data shows that only 15% of consumers are satisfied with their online shopping experience.

That said, if retailers want to keep up with e-commerce giants in 2021, personalized shopping experiences are an important step in improving customer satisfaction with online shopping.

In addition, the COVID-19 pandemic has changed the way consumers dress, with some people who once wore suits or dresses suddenly starting to wear sportswear , which is also a major change that clothing sellers need to pay attention to.

DTC

retail

USA