From pandemic shutdowns that mercilessly divided retailers into essential and nonessential businesses to drastic financial fallout for consumers in 2020, global retailers and brands in 2021 will be figuring out whether they’re in survival, adaptive, or growth mode — and their path forward. The savviest retailers and brands have adapted and invested (even with initially “duct taped” solutions), in the process accelerating their digital transformation by months, even years.
Retailers, brand manufacturers, and ecosystem players such as mall operators are entirely rethinking their businesses and ways of working, heralding much change ahead. Among other areas, in 2021 we predict that:
- Logistics will dominate retail investments. In a word, it’s all about distribution. Global retailers like Alibaba, Amazon, Carrefour, and Walmart have invested for years in logistics — but the 2020 pandemic sorely tested those capabilities for these companies and many others. In 2021, we’ll see retailers and brands investing heavily in everything from micro-fulfillment centers and dark stores (and kitchens) to subscription models, drop-shipping, and amped-up loyalty programs to lock in customers and better predict demand.
- Mall operators will reinvent themselves. Faced with traditional tenant bankruptcies, extra capacity, and long-term social distancing requirements, the savviest mall operators will see a renaissance in 2021 — but with new business models and purpose in place. Those lockers, pick-up points, dark stores, and kitchens that retailers need? Mall operators have the space. All those online orders that retail tenants fulfill in-store? Mall operators will take a slice of those revenues, just like they do for in-mall purchases. And that traditional operator/tenant relationship? Add “owner operator” to the list of roles for several mall-based brands (à la Brooks Brothers and Forever 21).
- Brand manufacturers will take control of their destiny. To take back the distribution reins, the savviest brand manufacturers will proactively remaster their supply chains, entirely revamp their distribution partner network, and harness AI-based retail planning. And we’ll see more direct-to-consumer investment to improve margins and develop direct relationships with their customers for the long term. It won’t be easy to uncouple from decades-long wholesale partner relationships or much more strategically manage the siren song of high-volume online marketplaces, but these are the brands that ultimately will control their future and flourish.
To learn more, please see our full set of predictions for the retail and brand manufacturer industry, and schedule inquiries with us to discuss further the 2021 outlook. To understand the major dynamics that will impact firms across industries next year, download Forrester’s Predictions 2021 guide.