Retail Reimagined: 9 Trends for the Future of Physical Retail

The chatter of the “Retail Apocalypse” began long before the recent events of a global pandemic. However, the last year has accelerated the need for retailers to go digital, leaving many struggling to adapt.

Despite the challenges retailers face, there are opportunities to not only survive but to thrive. But to take advantage of these opportunities requires the understanding that the pre-pandemic rulebook no longer applies.

In this article, we’ll look at the nine retail trends shaping the new world of retail and how marketers can adjust.

Simmer on this: at the height of the COVID-19 pandemic, 10 years of e-commerce growth happened in just 90 days.

In a nutshell: the future came early. Now what do we do about it? 

Retailers have proven amazingly resilient in the past year, as they’ve worked through the mass shift to e-commerce and balancing the demands of lockdowns and shifting consumer behavior. 

To navigate these challenges successfully, we need flexibility, innovative thinking, and a focus on the new ways that consumers are meeting their needs to transition into a different reality.

Is the Retail Apocalypse here? 

In a word: no. 

The in-person shopping experience can’t be replicated online, and that’s good news for retailers.

Shopping is multi-dimensional. We want to see and touch and smell and try on and (sometimes) taste the products we’re buying, and the eCommerce experience can only go so far. 

Think about Cinnabon- the way that you can basically smell it, even if it’s been years since you’ve been in one of their stores (sorry for making you drool). 

How about trying on outfits and seeing which materials feel best for you?

Small retailers are the bedrock of our communities, and consumers will still choose to shop retail when the experience is worth it.

Harley Finkelstein, President of Shopify, put it this way: “Retail will never die, it will only evolve.”

So let’s talk about the ways that retailers can proactively adapt to the new reality and grow, even in the chaos of 2021.

Retail in 2021 (and beyond)

While retail isn’t “over” it has been irrevocably changed. 2020 transformed the world of commerce. We’re now in a period of rebuilding across industries. 

Shopify research shows:

• 46% of buyers in the US and Canada have made purchases from local, independently owned businesses since the beginning of the pandemic.
• Of that group, 34% reported doing this more often than in the pre-pandemic era.
• 57% said they specifically seek out local, independently owned businesses to support with their purchases.
• 61% of buyers said they plan to buy from local and independent retailers six months from now. That’s significantly more than those who reported doing so in the first three months of the pandemic.
  

In many cases, consumers are excited to buy from smaller, local businesses, but there’s a catch—their habits have adapted to the changes brought on by the pandemic and their expectations have shifted accordingly. 

In nine of 13 major countries surveyed by McKinsey, at least two-thirds of consumers say they have tried new kinds of shopping. And in all 13 countries, 65 percent or more say they intend to continue to do so. 

Here are the top trends we’ve uncovered through our twice-a-week podcast, Resilient Retail:

1. Getting the most from e-commerce

Having a digital presence is table stakes, and the data backs it up. 

• 52% of buyers say they’ve shifted more of their spending to online due to the pandemic.
• 51% of those consumers said they felt uncomfortable with in-store shopping during a pandemic.

It’s this simple: without a digital presence, it’s virtually impossible to succeed in retail.

Before the pandemic hit, Minnesota brand TC Running had two brick-and-mortar stores and zero e-commerce presence. When shelter-in-place hit last March, forcing their doors to close, their revenue dropped to nothing overnight. 

In about a week, TC made a huge pivot and brought $1.5 million of inventory online, and recovered all their lost POS revenue with online sales. 

“It took us just over a week to get our online store and POS up and running. We have a lot of SKUs, and Shopify made it really easy to set up products and inventory counts,” said Jeff Bull, Brand Manager TC Running

Not only that—they took things a step further and launched their Run Squad membership program. They pivoted quickly and found new ways to stay top of mind for their customers, even without foot traffic.

Your online store might have been a temporary stopgap to help your business survive shutdowns, but consider building it into a permanent aspect of your strategy.

How to embrace this trend:

• Make sure your inventory is unified across all channels; 
• Use tools such as Shopify Compass to navigate the fundamentals of eCommerce success;
• Flesh out your website with eye-catching product images, a strong brand story, and engaging product descriptions;
• Use your social channels, email list, and other communication tools to let your customers know to check out your online store;
• Direct people online within your physical location with signage and QR codes.
  

2. The rise of new fulfillment methods 

Curbside pickup, local delivery, contactless payment, and Buy Online Pick up In Store (BOPIS) continue to rise in popularity.

But these fulfillment methods make sense even outside of a pandemic situation. They’re quick, convenient, and fit really naturally into consumer lifestyles. 

For example, roughly the same percentage of consumers who used curbside pickup in the early months of the pandemic (40%) say they will continue using it in the future (38%). 

Denver-based small retailer ReRoot embraced these new fulfillment methods with open arms.

The first thing that I did was start asking on Instagram. ‘What do you guys want? Do you want us and want us to offer curbside pickup? Do you want us to offer delivery?’ They said yes to all of the things that we wanted to do. We did them.

Paige Briscoe, founder of ReRoot

There was an overwhelming demand for curbside pickup, so Paige and her team turned their tiny retail space into something closer to a fulfillment center. 

Local delivery has also been a saving grace for a lot of retailers with close ties to their community. 

For example, when the initial waves of the shutdowns hit Canada, Great Lakes Brewing had 15,000 gallons of beer sitting in their silos. And no one to drink it. 

With no way to serve it in their restaurant, their revenue flattened. Thus came another resilient pivot.

Within a few weeks, the Great Lakes Brewing team transitioned their operations to meet the needs of their community by offering free delivery on orders over $50.

Soon after launching their local delivery program, they were averaging over 500 orders per week.

And the benefits go way beyond pure revenue. It’s a brand builder. A community connection, and as Troy Burch puts it, a much needed reminder of their WHY.

We have branded vehicles to get the brand out there, if you will. You can see our vehicles all over the city. And that not only saved jobs, but it also gave our staff another sense of community, again, to get out there and interact with our supporters from behind a door or glass window.

They were able to have that one on one connection. “Hey, how you doing?” “Are you OK?” “How is your family?” And the smiles on the faces of the people that we are delivering to at the end of the day, made it so much… It was shining a bright light on a dark day.

-Troy Burtch, Marketing and Communications Manager, Great Lakes Brewing

How to embrace this trend:

• Connect with your customers to find the best ways to serve them (ReRoot found local delivery wasn’t the best option, but curbside was);
• Work through the logistics (What is your delivery schedule? What are your delivery borders? Do you need to hire additional staff to complete the drop-offs? Will you charge a fee for delivery?)
• Look for ways to streamline so your customer experience remains simple, efficient, and convenient from beginning to end;
• Communicate new options for fulfillment clearly through onsite signage and digital announcements (like social media and email);
• Think about the right ways to update customers at every touchpoint  (confirmation email, text message, etc.) to keep the experience seamless
• Create on-site signage that clearly directs customers where to go for curbside pickup.
  

3. Holistic (omnichannel) commerce

Having an online presence alongside a physical store alone isn’t enough: your channels need to work together to build a holistic experience. 

Omnichannel retailing is a fully-integrated approach to commerce, providing shoppers with a unified experience across all channels or touchpoints.

Whether you’re selling wholesale, you own your own retail space, or you sell at popups, the digital channels need to be intimately connected to the physical space.

Curbside pickup and BOPIS already toe this line, but there are plenty of ways to take this process to the next level. 

Digitally-Native brand, Mack Weldon, is an exceptional example of true omnichannel commerce at work. 

You can purchase Mack Weldon products directly on their website:

In their Hudson Yards store:

And on other stores and marketplaces like Nordstrom:

An omnichannel commerce doesn’t require you to be everywhere possible, just the right places for your customers.

In my interview with Brain Berger, Founder and CEO of Mack Weldon, he told me how to approach this multichannel strategy:

It’s about being really strategic around how you position your brand to your customer and what channels in which you do that. So for us it’s not, ‘Oh, we’ve conquered digital or reached a level of scale, so now we’re just going to start opening up stores at a rapid clip.’ It’s really about thinking about the role of each channel and how it fits into your overall game plan.

-Brian Berger

How to embrace this trend:

• Map out common customer journeys with a focus on both online and offline sales;
• Reach local customers by using geo-targeting in your paid advertising;
• Use in-store signage to drive customers to your online store and social channels
• Collect email addresses at the point of sale;
• Build a loyalty program that rewards both in-person and online sales;
• Use the physical space of your brick-and-mortar store to produce content for social media, product images, etc.
• Offer virtual styling and video chat with store employees through a digital tool like HERO to improve the experience of your online customers;
• Consider using augmented and virtual reality to bring your physical experience online;
• Use SMS notifications for curbside pickup and local delivery (then use the channel to engage customers post-purchase)
  

4. A focus on local

Community is everything, especially during hard times.

Whether it’s Zoom happy hours, TikTok dance competitions, or  Kickstarter campaigns to save local institutions, we’re all craving real, human connection. 

That translates to the ways (and the places) where we shop.

Shopify’s Consumer Trends Report found that Half of Gen Z shoppers favor in-store shopping, despite being online-native. On top of that, over one-third of shoppers state they prefer in-store shopping to online one.

We’re even seeing cities build out programs designed to drive local support for retailers. Check out this example in my hometown of Colorado Springs. 

The takeaway here is simple: lean into your neighborhood.

Moving online opens up many new markets, but focusing on your local community and their needs, then building outwards means that you can maintain the connections and the passion that drove your business from the beginning.

I really think that one of the biggest reasons why we survived was because of our community. They were the ones that were spreading the word about ReRoot. They were the ones that were showing up for curbside. Our community really showed up.

-Paige Briscoe, ReRoot

That can mean sourcing local ingredients, underwriting local events and nonprofits, or a huge range of other community-oriented moves. 

How to embrace this trend:

• Use hashtags that encourage local support (#shoplocal #shopsmall);
• Connect with local media to build press hype in your area;
• Partner with other local retailers to drive awareness for both of your brands;
• Create Instagrammable signage or experiences that drive passersby to stop and share;
• Leverage local influencers to connect with your audience;
• Highlight the different ways that your business supports the local community using in-store signage, social media, and your website;
  

5. A different kind of store associate

There continue to be major shifts in the roles that different team members play within a business, and often that requires retail employees to wear multiple hats.

Think about virtual shopping or tools like HERO that allow customers to video chat and text with store associates while they shop online.

Adam Levene, CEO of HERO explains this trend:

What HERO does is connect a shopper who’s online who needs that same assistance, same inspiration and guidance as they would usually find in the physical store, and we allow them to get that whilst shopping online. But instead of speaking to a bot, instead of speaking to someone in the customer service center, they’re speaking to an expert, a sales associate from the store nearest to them and through text and through chat, through video calling, they’re able to connect and get that same IRL experience online.

While these experiences may not be traditional, they present unique opportunities for your customer service to shine.

It might sound daunting, but bringing your store associates into new roles that balance brick-and-mortar work with digital consultations creates the kind of one-on-one connection that shoppers crave.

Knix Wear has found massive success with its virtual styling program, making it a permanent piece of its business.

“We’re seeing about a 70 to 75 conversion rate from appointments in terms of purchase,” said Joanna Griffiths, Founder and CEO. 

Joanna continues: “What we’re hearing from people is they’re actually preferring it over an in-real-life fitting because it’s almost more intimate but without the awkwardness. Now it’s a big part of our company.”

It’s more personal, more helpful, and inspires loyalty on a level that is difficult to match with a traditional e-commerce experience.

How to embrace this trend:

• Train your retail staff on e-commerce tools, tech, inventory, and the ways that these digital elements play into their day-to-day roles;
• Enable live chat on your website, and train store associates to run the account
• Use a tool like HERO to add live video calling and online consultation to your store;
• Build a virtual styling program;
• Host live Q&A sessions with store associates;
• Highlight your store associates on social media and use them as brand ambassadors. 

6. Experiential, personalized in-store experiences

With in-person shopping down over the last year for obvious reasons, that means associates can spend more time with the people shopping.

Think of it as something closer to showroom retail: one-on-one personalized experiences that give the customer a sense of what they really mean to your business. 

Universal Standard is taking this approach and getting amazing results. And it makes sense- as fashion brands, they’re able to leverage their associates as style consultants, guaranteeing customers an unprecedented level of time and attention.

Alexandra Waldman, Co-Founder and CEO of Universal Standard told me about this non-traditional approach:

“We wanted to create a much more personal experience. So we created a space where you were one on one with a stylist. You made an appointment, or even if you dropped in. It is very much your space.”

As we continue to move through this “new normal”, heightened in-store experiences and community connection will be highly sought after.

We can look to modern retailers, like Daily Paper, for evidence of this trend. Jefferson Osei, Co-Founder explained why the team built experiential spaces, like a rooftop cafe, into the design of their brand-new flagship store in NYC.

Unfortunately, it’s not possible at this moment in time but looking forward, we really think that the store in New York will become a community hub where all these people can get together and link with like minded people. And the space will also serve as an educational space. We will dedicate certain areas to host certain initiatives, work with young talent in and around New York, and also collaborate with local initiatives and other parties.

How to embrace this trend (post-pandemic):

• Look at ways to reshape your physical layout to encourage customers to spend more time in-store;
• Add tablets or QR codes for customers to engage with in your physical location
• Create spaces (like Instagrammable mirrors) that drive engagement with the space and your brand alongside purchasing;
• Train your store associates for longer, more intensive interactions;
• Host community events like workshops, meetings, or training
• Offer your space for rent for your customers;
• Add extra experiences, like a coffee bar, into your store;
• Lower your stock and build out the experience. For example, that could mean using a 3PL or warehouse to make more space and offering buy-in-store, ship to a home

7. Micro-retail

Moving forward, there are tons of opportunities for brands to offer smaller, boutique experiences that still provide the physical, “three-dimensional” approach to shopping that we crave.

So what does that look like? It can be a micro-retail location, as in the case of the online bakery Klado, which chose to open a 50-square-foot storefront. For founders Jen Prado and Jesse Klee, it was about creating an intimate “hole in the wall” experience for their customers. 

Pop-ups are another exciting way to offer tons of opportunities for low-cost experimentation, and even if inventory is limited, these spaces can drive traffic to your online store, setting up a multi-dimensional connection with customers.

Even opening a location inside another store can be a great opportunity to connect with a new audience. Sephora has been doing this for well over a decade, but more recently Birchbox has seen great results opening up a popup inside of the Washington DC location of Rent the Runway.

Basically, low overheads, deeper community connections, and a novel shopping experience make micro-retail a great opportunity for growing brands.

The trick here is to lean into the things that already work for your brand. Knowing your strengths and amplifying them in a smaller space is your best bet.

Is the breadth of your inventory a big draw? Micro-retail might not be the right move.

However, if customers love interacting with your associates, putting that experience front and center in a smaller space can build lifelong connections.

How to embrace this trend:

• Partner with other brands to build micro-shopping experiences;
• Host community events;
• Explore the unique experiences a smaller space can offer;
• Prioritize safety using digital tools- i.e. tracking the number of customers in-store
• Collect email information or phone numbers to create digital connections after the sale;
• Get creative: Retail doesn’t always mean four walls;

8. Local partnerships

While 2020 was full of uncertainty, one positive that we’ve seen is new partnerships between businesses offering exciting customer experiences.

Many cafes have started selling groceries from local farms. My go-to cycling studio in Colorado Springs sources its t-shirts from the printing shop next door.

Common People Shop, a small retailer in Ontario that was forced to close down its store, has leveraged a local partnership to keep curbside pickup as an option.

Steph LaPosta, co-owner of Common People explains:

When we decided to face the reality that now was no longer the time and space for our Brick-and- Mortar, we knew the decision to close would not only impact the growth of our business, but our connection with our community. 

As we began to experiment with ways to keep that connection alive we knew one thing — we had to find somewhere local that we could partner with, to still offer curbside pickup.  That’s where Parkdale Pet Foods came in. 

Partnering with them meant we could drive traffic and attention their way, give them a portion of our profits, and keep both our brands alive and thriving in the Parkdale community.

Steph LaPosta

This kind of collaboration is really common between DTC brands (does anyone remember the BarkBox + Glossier toys?), and it’s so exciting to see retailers branching out in similar ways. 

It’s all about finding businesses with complementary offerings that don’t compete with yours. Think creatively about the different needs that you can meet for your customers and the ways that other brands in your local economy can help that partnership.

Having a strong sense of your own audience and that of potential partners (i.e. some overlap, but still distinct subsets) will really help these partnerships succeed.

How to embrace this trend:

• Connect with other brands in your area and learn what they’re working on;
• Put together a co-marketing digital campaign;
• Create content for another retailer;
• Create popups within each other’s stores
• Release co-branded products
• Team up on give-back campaigns within your community
• Use social media to reach each other’s audiences
• Look for mutually beneficial ways to build a better customer experience (or meet specific customer needs) together

9. Virtual experiences

Your brand has more to offer than just your products. Every business is made up of experts on a range of topics. 

Many restaurants are offering online cooking classes with starter kits. Bars are creating online mixology classes. Yoga studios are offering virtual sessions. 

Universal Standard is a standout in this category. They’ve partnered with Airbnb to host online readings of their children’s book, “What Would Fashion Look Like If It Included All Of Us,” building an extraordinary connection between the brand and the community they serve.

The trick here is building an online platform for your brand that meets a range of customer needs and empowers them to engage with your products, beliefs, and mission in new ways. 

There are plenty of ways to offer both instruction and kits that let customers learn or take part in something new and hands-on.

How to embrace this trend:

• List out the important elements of your brand experience and determine what can thrive online;
• Create engaging digital events that supplement your products;
• Prioritize community and connection between customers as well as with your brand;
• Train your staff with a specific focus on virtual experiences;
• Talk with your customers about the kinds of events that be exciting and valuable to them;
• Consider partnering with a complementary brand to broaden the audience.

Conclusion

As retailers continue to adapt to a new world of commerce, there are plenty of opportunities to build a thriving brand and business.

• If you don’t have a website or online store, consider investing in setting that up.
• Even post-COVID, many consumers will expect new fulfillment options such as curbside pickup, local delivery, and contactless payments.
• Having a digital presence alone isn’t enough, the entire experience should be seamless both in-store and online.
• Now is a great time to focus on serving your local community.
• Your store associates can be a great resource to educate and serve your customers through digital consultations and other virtual interactions.
• Consider experimenting with unique and personalized in-store experiences.
• Micro retail locations can also be an effective way to create a memorable experience.
• Local partnerships offer an opportunity to better serve your customers and enter new markets.

While overcoming these unique challenges won’t be easy, we’re entering a wide-open frontier with endless possibilities. Things have been rough, but I, for one, am feeling optimistic about the future.