Driving online profitability, creating safe shopping spaces, and bringing the out-of-home experience in-home are among the key trends expected to shape global retail in 2021, according to new predictions from IGD, a research and training non-profit in the grocery sector.

Following a disruptive 2020, IGD says the following five trends stand out as areas for businesses to focus on this year:

1. System upgrade: digitally enhancing operations

What we expect in 2021:

• Introduction of digital technologies that have a low capital investment and are easy to update
• Partnerships with third-party technology providers to speed up new tech introduction
• More use of machine learning and artificial intelligence at store level to drive revenue and increase customer satisfaction

Toby Pickard, Head of Innovation and Futures at IGD, said: “The pandemic has accelerated retailers and shoppers’ digital awareness and capabilities. Numerous companies have been testing and learning from new digital initiatives, and in 2021 companies will need to move beyond this to improve and implement at scale. Digital transformation will require new leadership and a fresh cultural mindset as companies create flexible and agile ways of working.”

2. Escalating ecommerce: driving online and profitability

What we expect in 2021:

• Retailers seeking to reduce their overall operating costs to accommodate online, improving processes and automation
• Encouraging shoppers towards click and collect
• Retailers assessing the options for rapid delivery, for example the same day or in a few hours

On ecommerce, Toby Pickard said: “With many shoppers using the channel for their large weekly shop, we have seen retailers focus on enhancing the pickup, or click and collect, experience to help improve profitability. This has included adding more collection slots, expanding order staging areas and parking bays and ensuring a contactless experience. While the initial surge is receding, online penetration is expected to remain at a higher level, compared to pre-crisis.”

3. Making a meal of it: creating inspiration and excitement

What we expect in 2021:

• Retailers creating inspiring meal solutions for all occasions
• Retailers seeking to capture shopper spend that was previously taking place out of home

Toby Pickard comments: “As the pandemic continues to create challenges for social interaction and people continue to work from home, we expect retailers to focus on inspiring meal solutions for all occasions throughout the day and week. By highlighting both value, ease of preparation and cooking along with inspiration, retailers have a real opportunity to capture shopper spend that was previously taking place out-of-home.”

4. Holistic health: supporting health and wellness

What we expect in 2021:

• Greater focus from shoppers on hygiene and sanitation products for individuals and the home
• Retailers and brands trying to differentiate themselves by helping shoppers and consumers live healthier lives
• More tailored solutions in-store, either through assistants or using digital tools like apps

According to Toby Pickard, “Health and wellness naturally became more important to everyone in 2020. We saw a wide range of activities from retailers as they aimed to encourage healthier lifestyles.

“We will see more retailers educating, informing and rewarding shoppers for living healthier lives. Companies will look to champion both their health and sustainability credentials, as the two key trends merge, of their existing and new products. Personal health will increase in importance, but ultimately affordability may take precedence during economic downturns.”

5. Recuperative retail: focusing on sustainability

What we expect in 2021:

• With climate change remaining a top priority, we expect retailers globally to push ahead with initiatives to support goals in this area
• Continued implementation globally of initiatives to reduce plastic and food waste
• Initiatives to build trust, loyalty and better relationships with shoppers, staff and communities

On sustainability, Toby Pickard said: “Climate change will remain a top priority in 2021, as it is recognised as the most likely source of major future disruption. While there will be much focus on how sustainability supports the climate change and resilience agendas, we will also see initiatives to build trust and loyalty with shoppers.”

Toby Pickard concludes: “The industry faced unprecedented challenges and had to adapt to ever changing government policies, and shopper and consumer behaviour changes.”

“When planning for 2021, companies should consider the two main variable factors from the pandemic: the potential path of the virus (from a relatively manageable virus to multiple outbreaks with lockdowns) and performance of the economy (from an economic performance that quickly recovers to a hard-hit economy slow to rebuild).”