The second weekend in January was \”Wild Card Weekend\” in the NFL, where all the teams with so-so seasons had one last chance to prove their mettle or suffer certain elimination from a chance to play in this year\’s Super Bowl. In most years, Wild Card teams fail to make it to the Big Game but every once in a while (6 to be exact, out of 53 Super Bowls) a Wild Card team ended up winning the whole enchilada.
20 for 2021
The retail business has its own cadre of Wild Cards – trends that may not look like much now but might just be positioned to have an outsized influenced on a sector ripe for innovation and change. There is a caveat: A number of these Wild Card picks might be a year (or two or more) out from really paying out, but the disruptive effects of these future trends will still likely be felt in 20201 as their future impacts ripple backwards in time.
Deloitte recently published its 2021 Retail Industry Outlook, and while their analysts are probably spot on when it comes to \”digital acceleration\” and \”supply chain resilience\” – these are more like industry platitudes and retail tautologies. This list is different; it looks at trends that are swinging for the fences – \”Hail Mary\’s\” if we keep up the football metaphor. Some of these will hit their target, pushing the ball way down field, others won\’t be nearly as effective. But no matter how you slice it, these Wild Cards are the trends with traction on the playing field right now.
Whether it\’s an upstart new retail category, new payment technology, new way of imagining what a retail environment looks like, or something entirely unimaginable just a few years ago (such as the proliferation of mask makers in 2020), here is the list of 20 Top Retail Wild Card Trends for 2021. Many of these were growing under the radar pre-pandemic and have now emerged as significant shifts.
1. Sustainable Fashion
Just as the term \”organic\” swept over the retail food world a decade ago forcing a litany of changes across the supply chain, a similar trend is now gaining traction in the fashion industry. \”Sustainable Fashion\” and its kissing cousin \”Ethical Fashion\” are two of the hottest new Wild Cards poised to shake up the entire fashion business. Sustainable Fashion refers to clothing and footwear that is designed, manufactured, distributed, and used in ways that minimize its impact on the environment. Perhaps one of the boldest players in this space is luxury vegan footwear maker Aera, which is not only neutralizing its environmental impact, but is certifiably carbon negative, offsetting its environmental impact by 110 percent. Ethical Fashion, a related term that is also popular among hyper-conscious consumers, refers to clothing made in ways that value equity, social welfare, and worker rights. Both of these growing trends share a similar foundation – namely that doing good is as important as looking good.
2. Rental Retail Goes Mainstream
Uber and Airbnb are among the best-known examples of business models that ushered in the so-called shared economy. Although it has not taken off as quickly, rented, leased, or short-term use fashion is another trend that is gaining steam and could really pick up in post-Covid economy when dressing up to go into an office will be a once-in-a-while affair and not the daily slog that it was pre-pandemic. Companies such as Stitch Fix, Armoire, and Rent the Runway have made high-end designer fashion accessible, but companies like CaaStle are poised to take the business of fashion rentals to an entirely new level by creating the back-end platform that helps all retailers and clothing brands create their own rental services. The company is building a logistics hub that integrates with companies\’ inventory systems and manages the end-to-end rental process on their behalf. CaaStle could mark as a big a shift in the business model driving retail fashion as when the car leasing business became an integral part of the automotive industry in the 1940s and 1950s.
3. Certified Use Retail
In another trend that the fashion industry is borrowing from the automotive sector, expect to see \”certified used\” as a new category on retailers\’ websites. If you\’re in the market for a used Patagonia pullover, Patagonia wants to be the place where you go to buy it. Powered by the circular commerce engine Trove, Patagonia\’s Worn Wear website buys back items that show limited \”wear and tear\” from customers, refurbishes and cleans them, and then sells them at more accessible prices. Some might think it is counterintuitive for a brand to cannibalize its sales of new product, but the secondary market for quality used products is an enticing new revenue stream that can also serve to build brand fealty. For an industry under considerable pressure, circular commerce represents an entirely new market that might become just as commonplace today as is buying a used car.
4. Enthusiast-Based Retail Channels
During Covid, enthusiast-based platforms really took off as people found themselves stuck at home with ample amounts of free time. Sites like Craftsy, which was bought by enthusiast channel leader TN Marketing from NBC Universal last year have a very sticky relationship with their hobbyist community, and those allegiances makes for a great new retail sales channel. Whether its woodworking, crocheting, baking or motorcycle repair – or any of the hundreds of other niche community content platforms that have gained traction during the pandemic, it seems likely that these platforms might become the most efficient sales channels for brands to reach their most dedicated consumers, sidestepping traditional retail middlemen.
5. Buy Now, Pay Later
The red-hot Buy Now, Pay Later (or simply BNPL) segment is the modern era\’s take on layaway, but with a twist. Instead of waiting to get merchandise until you can pay for it, consumers get what they want now – usually without having to run a credit check – paying a portion up front and the rest over time, at zero percent interest. The Big Boys in this sector, Afterpay, Affirm, Klarna, and Sezzle, are all laying track to become the Visa, MasterCard, Discover, and American Express of tomorrow. For retailers, this new payment model is already driving up average order volumes, reducing abandoned shopping carts online, and drawing in younger consumers weary of traditional credit products such as credit cards.
6. Voice eCommerce at Home
Alexa, Siri, Cortana and a host of other non-human voices now play an integral role in our daily lives. Combined with the growing ubiquity of connected (IoT) devices, it seems that a trend that will only be gaining steam is smart voice ecommerce. Your Fridge will automatically ping Instacart to let it know you are out of butter. A simple, natural language voice command will let you tell Target you have a hole in your undies and urgently need a new pair. Smart Voice eCommerce is likely to take a big leap forward in 2021.
7. The Fitness Center
Before Covid hit, fitness magnate Bahram Akradi, the CEO and founder of Life Time, the country\’s largest chain of upscale fitness centers, was on a terror, taking over vacant suburban mall spaces to expand his gym empire. Although Covid slowed those plans down a bit, anyone who walks into a Life Time could easily see where Akradi is going. Just about every Life Time has a restaurant (or two), a spa and salon, a retail store and more. Apparel, signage, and large department-store-like displays are placed strategically throughout the club with the same degree of forethought and planning that one would expect from a merchandiser at Macy\’s. Akradi is building business centers, apartment complexes and hotels around the gym complexes. The high-end fitness center, where people come several times a week (or even every day) and you have their captive attention, might very well become be the new backbone of the retail industry.
8. FOMO Retail
FOMO (Fear of Missing Out) can be one of the biggest motivators that drives human emotion and decision-making. Online powerhouse Proozy has seized on this primal human emotion and weaponized it, making it one of the fastest-growing ecommerce retailers in the country. The company\’s website is focused on selling top brands such as Nike, Havianas, DKNY, and countless others at heavily discounted prices, but the true magic happens in your email inbox. Customers who have signed up for Proozy\’s \”Insider\’s Deals\” newsletter will be faced with a daily barrage of expiring time-limited deals on top brands at prices that even the most stoic of shoppers will find hard to resist. Proozy\’s proprietary research has even figured out that when customers tap into a Proozy Insider Deals, their brains activate a mix of happy chemicals – adrenaline, endorphins, serotonin, and dopamine – that stimulate positive and even euphoric feelings, and leave shoppers craving more. Look for more FOMO retail marketing in the year ahead as more companies seek to emulate Proozy\’s success.
9. Near Eye/Augmented Reality Retail
Silicon Valley Guru Gene Munster – the same guy who predicted that Apple would be the next major force in global tech years before the first iPhone was unveiled (and at a time when Apple\’s share price was trading at less than pre-split equivalent of two dollars a share) is betting big on Near Eye Tech. Munster believes that within the next decade, there will significant global growth across Augmented Reality, Mixed Reality and Virtual Reality products that will translate into to 1.3 billion new displays, all of which will sit within one inch of the human eye. Google, Facebook, Apple and Microsoft have all announced they are betting on Near Eye big time. Obviously, this trend will usher in a completely way of interacting with the physical world, including manifold challenges – and opportunities – for retailers.
10. In-Store Fulfilment
Supply chain management is probably the least sexy area within retail, but the one that can have the biggest impact on the bottom line. Although most major retailers were already knee deep into in-store fulfillment well before the coronavirus forced upended life as we know it, the pandemic forced those who hadn\’t jumped on the bandwagon to do so, repurposing their vast physical footprint as mini distribution hubs. These local logistics centers helped retailers meet consumer demand by providing faster fulfillment for online orders. Shipping online orders from brick-and-mortar locations, or offering curbside delivery, is improving inventory management, driving logistical efficiencies, and creating added stickiness with the customer base – all of which add up to major cost reductions for retailers. Look for retailers to leverage these sales channels in new and innovative ways in the year ahead, even serving as delivery hubs for third-party inventory for stores that don\’t have a physical footprint to lean on.
11. Kitchens in the Cloud
Cloud kitchens are centralized, licensed commercial food production facilities that either rent food preparation space out to virtual restaurants or take on contracts with multiple restaurant brands to prepare dishes across multiple menus for the sole purpose of at-home delivery. Think of it as a cable head-end where hundreds of channels come in before being delivering one customized feed to customers. The trend towards a single kitchen running the programming for multiple restaurant brands, all operating under one roof, is one that will only gain steam as the public has grown increasingly reliant on food delivery services such as Uber Eats, Grubhub, and EatStreet for at-home delivery even after the pandemic.
12. The Rise of Retail Medical
Visits to doctors aren\’t traditionally considered to be among the typical services one might consider as part of the retail landscape, but the success of San Francisco-based One Medical over the past few years is putting that notion to the test. This membership-based primary-care model offers same day drop-in appointments, warm and welcoming modern layouts – almost like a swanky hotel – and you don\’t have to wait for more than five minutes for your appointment to begin. Although One Medical\’s services are built around a model aimed at appealing predominantly to younger people in higher income brackets, the idea of more accessible care is certainly a trend that was growing before the onset of the pandemic. As doctor visits and wellness checks become less of a hassle and a more routine, it\’s not hard to imagine brands looking for ways to get in front of coveted clients in these new settings.
13. Walk-Out Shopping
Most of the country has already had some experience with Scan-and-Go shopping where consumers scan their own purchases and forego interactions with chatty (and often annoyingly slow) checkout clerks, but Walk Out Shopping, best embodied by Amazon Go – the physical retail stores owned by Amazon, is taking Scan-and-Go to a new level, removing the checkout process altogether. Some experts quip that first time shoppers Amazon Go feel something of rush, as if they were actually shoplifting, as the idea of picking up a loaf of bread and just walking out of the store with it, not having to stop and pay, goes against an entire lifetime of programming in our heads. It is still early days for Walk Out Shopping but with a powerhouse juggernaut like Amazon leading the charge, this is one trend sure to build momentum in 2021 and beyond.
14. Experience-Centric Retail
The idea of a physical retail store\’s purpose is undergoing tremendous change. No longer simply a place to trade and transact, retail stores across many categories have begun to look at the physical space as a place to leverage customers\’ experiences rather than simply hawk products. Many industry experts consider a successful in-store retail experience today as having three central components: trial, service and entertainment. The key is to give customers the ability to try out products, interact with in-store experts (who actually should know more about the product and sector than the consumer), and enjoy intimate, instagrammable, personalized moments with the brand. One company that has nailed this formula is mattress retailer Casper, which evolved from online retailer to a brick-and-mortar business now with over 60 stores across the U.S. The Dreamery, although temporarily closed during Covid, has served as Casper\’s new napping space in Manhattan and is built around the idea of test-driving a mattress with a 45-minute mid-day power snooze. Once the threat of Covid subsides, look for more retailers to double down on in-store experiential retail.
15. Dynamic In-Store Pricing
If you are older than 40, you are likely familiar with the concept of supply side economics. Now get ready for supply-side commerce. Here\’s how it works: You are shopping at the GAP at your local mall and you glimpse that red cardigan sweater you saw online. It\’s retailing for $69.99, but before you pick out your size M, you decide to stroll around the mall and come back later. When you return to the store, two hours later, you notice the price is now $79.99. Why? Because in the last 30 minutes, the store sold out 80 percent of their red cardigan sweater inventory – its apparently a hot item – and you should have bought before demand surged. Welcome to the world of dynamic, AI-powered, in-store pricing which can automatically adjust a given product\’s retail price based on an endless amount of supply and demand data – all in real time. Thank Amazon and the travel booking apps for getting us used to this annoying practice.
16. Born-Again Brands Online
Internet phenoms like Tai Lopez notwithstanding, the potential of well-heeled private equity money dusting off storied iconic American retail brands and putting them back in play online remains an alluring possibility. Lopez\’s Retail Ecommerce Ventures group has made much ado about having brought Pier1, Modell\’s Sporting Goods, Dressbarn, and several other major defunct brands back to life online. Does this mean iconic brands of the past such as Levitz Furniture, Woolworth, and Sports Authority are due for a comeback with an online afterlife? 2021 may be the year.
17. OTT Commerce
Netflix, Amazon Prime, Disney+, Hulu – all these so-called TV apps are part of a new technology ecosystem called \”Over-The-Top\” or OTT. Many of these apps come preloaded on most new smart TVs and thousands more can be downloaded from the internet. Targeted to cord-cutters – consumers that want to stop paying for cable. Many retailers and brands are beginning to experiment with OTT as a new sales vector – even for local or regional stores – oftentimes working together with paired mobile devices to deliver a more complete interactive shopping experience.
18. In-Store Signage
There is a Big Brother aspect for many consumers to stomach, but with the right set of permissions and a Bluetooth connection, in-store retail signage could get a lot more personal. Imagine a voice from a digital display quietly calls out your name as you pass by. \”Arick, the back massage appliance you\’ve been eyeing online is on sale, right now, right here.\” It\’s bespoke messaging at its best, and the technology for such personalization is already here; it\’s the implementation and privacy issues that have kept it on the back burner to date.
How many times do you look at the label of a product only to see \”Made in Vietnam\” or \”Hecho en México?\” In reality, what this label is communicating is where a given product was assembled, integrated, or sewn together. But today\’s supply chains are far more complex and global – and consumers are increasingly demanding to know every products\’ complete backstory – a process that is much easier to track with blockchain technologies. It\’s a trend which began with food (yes, people actually want to know where their Thanksgiving Day turkey grew up), but in 2021 its likely to extend to blenders, UGGs, and everything in between.
Paying for that new La-Z-Boy recliner with Ether or Bitcoin is probably still quite unlikely in 2021, but who knows? No one saw us all wearing masks at this point in 2020 either.