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17 December 2020
The impact of the COVID-19 pandemic will be felt for months to come and most likely permanently. It’s impossible to know what lies ahead but here are some trends that are already in place and likely to become more prominent in 2021. Here are the top 10 retail trends to expect in South Africa in 2021.
The COVID-19 pandemic has had a massive impact on retail in 2020. The obvious outcome has been the growth in e-commerce. Major online retailers like Takealot and Superbalist were well
to benefit from this change in consumer behaviour. Offline retailers were forced to respond with the speedy rollout of new technologies, apps and ways of meeting shoppers’ needs
such as Click and Collect. The impact of the COVID-19 pandemic will be felt for months to come and most likely permanently. It’s impossible to know what lies ahead but here are some trends
that are already in place and likely to become more prominent in 2021.
1. The evolution of shopping Malls
Shoppers are returning despite the pandemic but malls will need to be reimagined. Relying on department stores like Edgars as anchors will no longer be viable.
There will be more demand for smaller independent stores that are in sync with consumers’ needs. The recently opened “We are EGG” https://www.weareegg.co.za/
at Cavendish Square is a revolutionary concept that showcases smaller creative retailers while at the same time meeting the Landlord’s need to fill a big space.
Local neighbourhood centres will benefit at the expense of super regional shopping centres as shoppers try to avoid the crowds and focus on convenience.
Brands will need to adapt to this and focus on local communities.
2. Local and independent are again flavour of the month
For many years big Malls pushed small local entrepreneurs out of the way in favour of international brands. With several of these large international brands
having closed shop, we are seeing the emergence of successful local brands like Drip Footwear https://www.dripsa.co.za/ and Bathu https://www.bathu.co.za/.
3. Direct-to-consumer brands D2C
Over the past few years, D2C brands have exploded – giving brands direct access to customers and profits, and giving customers direct access to brands at lower prices.
This trend is shifting though. If you associate D2C with tupperware, affordable mattresses and budget makeup, then prepare to have your mind changed. Premium designer
brand sales are increasing, creating a new vertical in the D2C sector. Customers are turning to luxury private label brands for superior products and better shopping experiences.
With stores at the V&A and Mall of Africa, MAXHOSA is an example of a local designer brand that has followed this path.
4. Ghost Kitchens and Dark Shops
Expect a proliferation of ghost kitchens, dark stores, micro-fulfillment centers and malls transforming into distribution centres. 'Dark', 'virtual' or 'cloud' kitchens are shared cooking
spaces that serve as hubs for online deliveries. Dark stores are traditional retail stores that have been converted to local fulfillment centers. OISHI https://oishi.co.za/ is a local
delivery only restaurant business that has followed this international trend with great success.
5. Livestreaming will take centre stage in 2021
Nothing beats the experience of shopping in person yet livestreaming is the closest many retailers and brands have been able to come to physically connecting with their
customers during the pandemic. Livestream-generated sales are expected to double to $ 120 bn worldwide in 2021. Shoppers want to feel a connection to a brand. Clinique
used this very effectively in 2020 using Game of Thrones actress Emilia Clarke to present their products to customers during lockdown.
6. Touch-free technology will become mainstream
Burberry’s first social retail store, which recently opened in Shenzhen, southern China. This will give you a flavour of the store of the future. With a specific programme
on WeChat, the country’s most popular messaging app, customers can click on exclusive content and personalised experiences in-store, then share details with friends.
No touching is needed. Every item in-store has a tag with a QR code, scan them for more storytelling. Each customer is also given a playful animal character via Snapchat
that evolves as they walk around the store. The gamified experience takes retail to another level. The more that customers engage with this form of augmented retail, the
more rewards they get through Burberry’s social currency.
7. Social commerce
Social commerce is the use of networking websites such as Facebook, Instagram, and Twitter as vehicles to promote and sell products and services We’re influenced
by people we trust and connect with. Ambassadors are a critical touchpoint for customers, they’re the face of the retailer and on the frontline of our questions, queries
and often influence our decision to purchase.Social commerce has the potential to grow faster than overall ecommerce — proving once again that, while consumers
may not be meeting up in person, socially driven commerce is uniquely embedded in their DNA. Around 70% of shoppers turn to Instagram for product discovery.
When compared to the average consumer, Generation Z spends 2 to 3 times more on social channels with Instagram and Snapchat taking the lead, while
Generation X prefers shopping on Facebook.
8. Offline ecommerce
One thing that physical stores do better than any other channel is to engage all five senses. This means they’re a great way to forge emotional connections with
customers through personalized, engaging experiences. Online retailers are increasingly coming to the conclusion that they are missing out by not having a
bricks and mortar presence. Pop-ups shops, interactive ecommerce kiosks, and bricks and mortar stores are all bringing our favourite online retailers onto the high street.
Locally we have seen Yuppiechef https://www.yuppiechef.com/ make this transformation successfully. Internationally, even Amazon are opening a chain of physical
convenience stores. In 2021, we will see an increase in ecommerce brands in shopping malls, occupying pop-up and multi-channel shops that bring the internet to real life.
Also known as second-hand commerce will see a renewed revival next year. The second- hand market is to double within the next five years. With consumers becoming
increasingly motivated by sustainability, rather than price, second-hand sales of luxury items will shake up the reCommerce industry. This presents an interesting opportunity
for brands to open up their own reCommerce marketplace and turn second-hand shopping into an exciting shopping experience. Some of the front runners in the South African
market include Luxity https://luxity.co.za/ and Huntress Jozi https://www.instagram.com/huntressjozi/?hl=en.
10. AI Enhancing In-Store Experience
Artificial intelligence can automate in-store operations and reduce operational expenses in retail stores. It can replace sales personnel to assist customers in the store,
reduce queues through cashier-less payment, replenish stock by real-time stock monitoring, and digitize store display and trial rooms. Amazon has launched
Amazon Go, a new kind of store featuring the world's most advanced shopping technology. No lines, no checkout – just grab and go!
Whatever happens, we are in for an interesting ride in 2021. Hang onto your seats!