5 key trends to know about in retail and customer service

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From ‘calm commerce’ to the dash from cash, we ask the experts to share their insights


Although 2020 was a turbulent year for retailers and small business owners – to put it mildly – experts are cautiously optimistic about this year’s outlook.


In many cases, analysts argue that the pandemic simply accelerated changes - such as the cashless economy and e-commerce - that were already underway. “Indeed, many fashion companies have taken time during the crisis to reshape their business models, streamline their operations, and sharpen their customer propositions,” McKinsey says in its State of Fashion 2021 report.


So, which are the top trends you need to know?


Calm commerce


“Consumers don’t want to linger in stressful retail spaces for extended periods of time,” says Charlie Clark, Trend Expert for WGSN. “People don’t want the retail experience to add to their sense of being overwhelmed, but rather to make their lives easier, and in some cases to provide a sense of calm, sanctuary and escape.


“So, it will be important to make their shopping experience easier and more convenient. That could be through introducing products that actually make their lives easier, bundling products together or by making the whole experience much more streamlined and calming.”


Part of this reluctance to linger and browse is due, of course, to the effect of the pandemic on our psyche, says Paul Zahra, CEO of the Australian Retailers Association. “Customers are shopping with purpose and a focussed set of purchases in mind,” he says. “Hygiene practices are now part of operating a business in the new Covid world, and retailers are ensuring all in-store traffic and high-touchpoint areas are appropriately managed. These safety practices and changes in the consumer’s mindset are set to continue in 2021.”


Localised and community-led retail


Supply-chain disruption overseas - plus the fact that many of us have been spending much more time in our neighbourhoods and communities - means that shopping locally has become more important to Australian consumers. According to Accenture, 56 per cent of consumers are shopping in neighbourhood stores or buying more locally sourced products - and 84 per cent plan to continue buying locally sourced.


“Consumers increasingly want to spend with brands and businesses that are creating tangible, positive impact on the places that they live,” says Clark. “Isolation has been a key challenge for many, so it’s also important to build strategies that allow them to feel more connected to each other through community.”


Contactless digital shopping


December was the busiest month in Australia Post’s history, with 45 per cent year-on-year growth in online shopping in Australia – making a successful omnichannel strategy key.


Retailers also need to consider click-and-collect options, says Zahra. “Retailers in the essentials category such as supermarkets and hardware stores have been offering ‘click and collect’ options for some time, but that’s now evolved during Covid to ‘direct to boot’ services where shoppers don’t have to leave their cars to pick up their items.”


Other delivery services, such as Hubbed, have also seen demand soar.


The shift from cash


The dash from cash is an example of a trend that started pre-Covid and accelerated in the last few months. ATM withdrawals were down 46 per cent year-on-year by last May, according to the Reserve Bank of Australia, and only 32 per cent of payments were made in cash in 2019 (a fall of 11 per cent in just three years).

“Retailers need to embrace the cashless future,” says Zahra. “Businesses were actively encouraging customers to use electronic payments to slow the spread of the virus through physical contact, while some refused to accept cash at all.”

Buy now, pay later (BNPL) technology – like Afterpay – is also growing. “According to ASIC,” says Zahra, “the number of BNPL transactions increased from 16.8 million in 2017-18 to 32 million in 2018-19 – an increase of 90 per cent,” he adds. “There’s no doubt these payment options are here to stay. They’re proving incredibly popular, in particular for young Australians, as an easier and more attractive way to pay for goods and services.”


Social justice and sustainability


Yes, sustainability is every forecaster’s go-to trend, but brands’ social credentials have become even more important post-pandemic, as the global emergency prompts consumers to reconsider their own values and priorities.

 “There has been a shift towards buying from businesses that align with our values and stand for causes we believe in,” says Clark.

Not only does that mean treating everyone in the supply chain with fairness and respect, but it also requires a move away from the cycle of constant stock replenishment and heavy discounting, says WGSN.

“Covid-19 highlighted the need for a shift in the profitability mindset”, says the Business of Fashion/Mckinsey State of Fashion report. Among its recommendations, the report suggests that businesses  reduce their inventory by taking a demand-focused approach. 

Felicity Robinson has worked for newspapers and magazines including The Sydney Morning Herald and marie claire. She is the co-founder of PRIMER.


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