Retail Industry News

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• Retail Workers Shouldn’t Be Tasked with Enforcing Store Mask Rules, Union Head Says
  

  By Joe Murphy and Corky Siemaszko

  Many store owners have "abdicated their responsibility" and left it up to rank-and-file workers to enforce mask policies, said Stuart Appelbaum of the retail workers union.

  The pandemic’s arrival in March 2020 meant that it didn’t make Retail Dive’s trends to watch last year, but it completely upended all expectations for the year.

  The health crisis was closely followed by the whole industry throughout 2020, courtesy of the havoc it wreaked on retail operations. Stores were forced closed, employees were furloughed or laid off, rent was skipped, supply chains were strained.

  Headed into 2021, retailers have survived the immediate triage period, but the pandemic is still very much present and will continue to shape the year ahead. Indeed, the ability of the crisis to cause more problems, or abate them, depending on how the world recovers will perhaps have the largest effect on the industry this year.

  The pandemic is a thread weaving through almost every trend the industry faces in 2021, in some cases speeding up inevitable changes many years in the making and in others sparking unexpected developments. Whatever this year brings, the changes driven by the convergence of the pandemic and longstanding industry tailwinds will influence what retailers do and reshape the industry.

  Here’s what Retail Dive is tracking in 2021.

  1. The pandemic will forever alter the brick-and-mortar landscape

  The major blow to retailers that came from the pandemic’s forced closure of stores last spring lessened somewhat throughout the year as stores reopened, but long-term changes to the retail landscape are inevitable.

  Several retailers, whether through bankruptcy or not, sped up or expanded plans to close stores, especially at malls. Companies as diverse as Gap Inc., Macy’s, Victoria’s Secret and Nordstrom announced plans to close doors permanently, adding up to hundreds of empty locations, many of them mall anchors and specialty tenants or downtown flagships.

  Strip centers fared better, and Macy’s is among those switching to the format. Analysts also see some hope for neighborhood shopping districts as people continue to work from home and frequent their local shops, and Foot Locker and Nike are among those embracing the idea of community-oriented locations. But the pandemic, despite some help from a financial COVID relief package early in 2020 designed to help keep small businesses afloat, has been especially challenging for many mom and pops.

  It’s an open question whether downtown shopping corridors will recover, considering that working from home could remain an option for many workers even after the pandemic subsides. What’s more certain is that yet more malls are destined to falter, even some at the high end, with the pandemic accelerating what would have been a five- or 10-year trend. The troubles have ushered in an unprecedented level of cooperation between landlords and their retail tenants, which could provide retailers with flexibility to serve customers in their ideal locations, wherever those may be.

  2. The culling of weak retailers will continue apace

  The COVID-19 pandemic had the effect of consolidating several years worth of e-commerce growth into a matter of months. It also likely had a similar effect on retail bankruptcies. Last year, J.C. Penney, Neiman Marcus, J. Crew — all retailers that might have slogged into 2021 or 2022 — filed for bankruptcy in an effort to restructure. Others such as Stein Mart and Lord & Taylor, which liquidated their physical footprints, might still be standing today if not for the crisis.

  Bankruptcies in 2020 hit levels not seen for more than a decade as the pandemic dragged heavily on traffic to stores and forced them to shutter in the spring. As the COVID-19 pandemic continues to weigh on shoppers and the economy, retailers lacking cash, that are heavily indebted, suffering severe and persistent sales declines, or some combination of those things, are vulnerable to bankruptcy or disappearing entirely. No matter how 2021 plays out, you can expect fewer stores and perhaps companies than today as the year begins.

  3. The generalist giants will try to consolidate their 2020 gains

  Walmart, Amazon, Target and Costco all saw growth last year ranging from very solid to explosive. Each of them got there in different ways and for different reasons, but those companies have a few things in common. They are huge, with vast cash and capital resources to invest in their businesses and capabilities. And all four are generalists to varying degrees, selling everything from basketballs to apparel to milk.

  Along with leaning on Amazon’s super fast delivery, pandemic-wary shoppers in 2020 flocked to the one-stop big-box sellers like never before. Their broad offerings meant customers could reduce their trips and, with them, their potential virus exposure. That had the effect of accelerating a longstanding trend of consumers ditching specialists for generalists as a matter of convenience and price. Walmart and Target have also made deep investments in their omnichannel capabilities and product offering that were paying off just as the pandemic shifted shopping habits.

  The question hanging over the year ahead is whether retail’s biggest players can hold on to customers they gained during the pandemic, or, on the flip side, whether smaller specialists can compete against the retail heavies.

  4. The distinction between DTC and traditional retailers will continue to blur

  Direct-to-consumer brands have grown in popularity over the past decade, but cracks in the model have begun to emerge in recent years. Some so-called DTC darlings have faced company culture issues, while others have revealed just how difficult it can be to reach profitability selling goods almost entirely online.

  And while these brands weren’t totally immune from the industry-wide disruptions brought on by the pandemic, they fared slightly better as consumers were driven online.

  Wayfair and Chewy — two companies that previously struggled to reach profitability under mounting advertising and marketing costs — have posted record results since the start of the pandemic. Wayfair reported two consecutive quarters of profits, the first time the retailer has been in the black since going public in 2014. The home retailer has benefited from both the category seeing a boom in recent months and more consumers shopping online. And Chewy, while not yet profitable, posted "record" net sales in its most recent quarter and grew its net active customers to 17.8 million.

  The model is also attractive to more traditional retailers, like Nike and Under Armour, which have touted the benefits of focusing on their direct-to-consumer channels over wholesale to boost profitability.

  The distinction between the two — pure-plays and traditional retailers — will further blur in the year ahead as the ways in which DTC brands adopt traditional practices like opening stores and traditional retailers adopt the direct-to-consumer model continue to shake out.

  5. Some pandemic pivots may not stick

  To retailers during the pandemic, pivoting and making quick changes meant survival. When stores began offering curbside pickup and contactless payments, and turned some locations into online warehouses, the purpose of a store was redefined. But with the rollout of vaccines, some changes might not be here to stay.

  The pandemic upended makeup testers and dressing rooms, and when customers return to physical stores, retailers will have to reimagine experiential retail. As demand for contactless fulfillment offerings like buy online, pick up in store surges, retailers will look for ways to make these services more sustainable.

  Growth was pushed aside during the early stages of the pandemic when a record number of stores shut down for good and survival became retailers’ main priority. 2021 will likely allow retailers more time to focus again on innovation, but still, new tools emerged in the midst of the pandemic as retailers looked to create socially distant experiences, like using augmented reality to test cosmetics, automated checkout tech and group video shopping platforms. Only time will tell which changes are built to last.

  6. The e-commerce boom will continue, but so will its challenges

  The pandemic spurred the growing share of sales that e-commerce took by historic numbers last year. But as more consumers grew reliant on making purchases online, the number of orders coupled with pandemic-driven employee shortage left retailers and postal services struggling to cope with the demand.

  Site crashes, late deliveries and faulty discount codes reflect badly on retailers, leaving customers unsatisfied. In fact, only 15% of consumers in a recent survey were happy with their online shopping experiences, according to Contentsquare. Giving customers richer and more personalized shopping is essential for retailers if they want to rank well on Google in 2021 and keep up with e-commerce giants.

  With store closures and social distancing measures that limit store capacity, retailers have no choice but to compete in an already crowded e-commerce space. Many brick-and-mortar stores have already permanently closed doors due to online competitors in addition to problems caused by the pandemic.

  Still, e-commerce platforms attracted more groups of customers in 2020 and will potentially continue to do so into 2021. Shopping app downloads, for example, reached 2.8 million on Black Friday — a new single-day record, according to preliminary estimates from Sensor Tower Store Intelligence.

  7. Apparel attempts to bounce back (or at least not bleed out more)

  Apparel was in trouble before the pandemic. Experts observed in 2019 that it was one of the most distressed segments of retail, and was suffering from the pitfalls of being oversaturated and overstored. That same year, most of the major bankruptcies were filed by companies that mostly or exclusively sold apparel, including Forever 21, Barneys New York, Charlotte Russe and Gymboree.

  Then, in 2020, trends that were problematic within the sector accelerated, leaving in their wake additional bankruptcies from department stores that chiefly sold clothing including J.C. Penney and Lord & Taylor, to specialty players such as J. Crew and Ascena filing Chapter 11. To add to the confusion, large swaths of the population were suddenly working from home and staying there because events and travel were canceled. It changed the way they dressed, with people who once reached for suits or dresses suddenly donning athleisure and loungewear.

  In short, the segment took a tremendous hit and the immediate future is about recovery. McKinsey & Company’s The State of Fashion 2021 report envisions two possible scenarios to get there. The first "earlier recovery" probability states that global fashion sales will decline by 0% to 5% in 2021, and is predicated on successful virus containment and swift economic restoration. The second "later recovery" scenario doesn’t have the apparel industry returning to 2019 levels until the fourth quarter of 2023.

  That means the possibility of additional specialty retailer bankruptcies or acquisitions. It also points to apparel companies increasingly relying on digital channels to sell products, even as demand is diminished "due to restrained spending power amid unemployment and rising inequality," according to McKinsey.

  8. Consumers will be stuck, and that’s a problem for retailers

  In 2020, as with so many other macro trends, the pandemic worsened the wealth gap.

  When Trump took office in 2016, the top 1% of households held more wealth than the middle class, a reversal from before 2010, and only the top 20% have fully recovered from the Great Recession, according to the Brookings Institute. The pressures on the middle class are a problem for the economy as a whole and for retailers in particular — both depend on a consumer with enough disposable income and financial confidence to buy more than they need.

  The pandemic strained both. Personal income in November was down $221.8 billion or 1.1%, disposable personal income fell $218 billion or 1.2%, and personal consumption expenditures fell $63.3 billion or 0.4%, according to the most recent estimates from the U.S. Bureau of Economic Analysis. Jobless claims are also "essentially stuck at a painful, inflated level due to the coronavirus surge," according to Robert Frick, corporate economist at Navy Federal Credit Union. Some 10 million jobs disappeared since February last year, and the holiday season was marked by bargain-hunting due to pandemic-related job and income loss, according to GlobalData. The Conference Board recorded a surprise deterioration in consumer confidence last month.

  Despite the promise of vaccines and extra savings from being stuck at home, the average consumer has reason to remain on edge this year, mostly because of the ongoing pandemic. "And as long as that surge continues, even with stimulus, we can expect more than 1 million Americans will lose their jobs weekly, based on state and federal measures," Frick said in emailed comments on the last day of 2020.

  9. New owners take center stage

  2020 brought in a surprising new class of retail owners that ultimately may change the trajectory of business models. Authentic Brands Group, which already owned a handful of apparel brands and licenses and eventually bought Barneys in 2019, teamed up with Simon Property Group again this summer to buylegacy retailer Brooks Brothers and then Lucky Brand. They had previously partnered to buy Forever 21 early in the year and Aeropostale in 2016.Now their 50/50 venture, called Sparc Group, is the operating partner for Aeropostale, Forever 21, Lucky Brand, Brooks Brothers and Nautica.

  Real estate companies got further into the mix, effectively turning mall owners into retail business owners. In arguably the biggest play of the year, landlords Simon Property Group and Brookfield Asset Management bought J.C. Penney’s department store operations at the close of 2020.

  Also on the scene is Retail Ecommerce Ventures, which snapped up the IP of multiple retailers including Modell’s Sporting Goods, Dressbarn and Stein Mart.

  Although the impact of shifting ownership may not be seen immediately, many questions remain regarding these players. Will brands become divorced from their operations? Are companies that were once household names going to lean into licensing? Are more specialty retailers going to end up selling their IP to conglomerates? And ultimately, how is it all going to impact the shopping experience?

  Source: NBC News, July 29, 2021 (https://www.nbcnews.com/news/us-news/retail-workers-shouldn-t-be-tasked-enforcing-store-mask-rules-n1235231)

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• 9 Retail Trends to Watch in 2021
  

  By Daphne Howland, Ben Unglesbee, Cara Salpini, Kaarin Vembar, Carolina Jansen, Maria Monteros

  The pandemic’s arrival in March 2020 meant that it didn’t make Retail Dive’s trends to watch last year, but it completely upended all expectations for the year.

  The health crisis was closely followed by the whole industry throughout 2020, courtesy of the havoc it wreaked on retail operations. Stores were forced closed, employees were furloughed or laid off, rent was skipped, supply chains were strained.

  Headed into 2021, retailers have survived the immediate triage period, but the pandemic is still very much present and will continue to shape the year ahead. Indeed, the ability of the crisis to cause more problems, or abate them, depending on how the world recovers will perhaps have the largest effect on the industry this year.

  The pandemic is a thread weaving through almost every trend the industry faces in 2021, in some cases speeding up inevitable changes many years in the making and in others sparking unexpected developments. Whatever this year brings, the changes driven by the convergence of the pandemic and longstanding industry tailwinds will influence what retailers do and reshape the industry.

  Here’s what Retail Dive is tracking in 2021.

  1. The pandemic will forever alter the brick-and-mortar landscape

  The major blow to retailers that came from the pandemic’s forced closure of stores last spring lessened somewhat throughout the year as stores reopened, but long-term changes to the retail landscape are inevitable.

  Several retailers, whether through bankruptcy or not, sped up or expanded plans to close stores, especially at malls. Companies as diverse as Gap Inc., Macy’s, Victoria’s Secret and Nordstrom announced plans to close doors permanently, adding up to hundreds of empty locations, many of them mall anchors and specialty tenants or downtown flagships.

  Strip centers fared better, and Macy’s is among those switching to the format. Analysts also see some hope for neighborhood shopping districts as people continue to work from home and frequent their local shops, and Foot Locker and Nike are among those embracing the idea of community-oriented locations. But the pandemic, despite some help from a financial COVID relief package early in 2020 designed to help keep small businesses afloat, has been especially challenging for many mom and pops.

  It’s an open question whether downtown shopping corridors will recover, considering that working from home could remain an option for many workers even after the pandemic subsides. What’s more certain is that yet more malls are destined to falter, even some at the high end, with the pandemic accelerating what would have been a five- or 10-year trend. The troubles have ushered in an unprecedented level of cooperation between landlords and their retail tenants, which could provide retailers with flexibility to serve customers in their ideal locations, wherever those may be.

  2. The culling of weak retailers will continue apace

  The COVID-19 pandemic had the effect of consolidating several years worth of e-commerce growth into a matter of months. It also likely had a similar effect on retail bankruptcies. Last year, J.C. Penney, Neiman Marcus, J. Crew — all retailers that might have slogged into 2021 or 2022 — filed for bankruptcy in an effort to restructure. Others such as Stein Mart and Lord & Taylor, which liquidated their physical footprints, might still be standing today if not for the crisis.

  Bankruptcies in 2020 hit levels not seen for more than a decade as the pandemic dragged heavily on traffic to stores and forced them to shutter in the spring. As the COVID-19 pandemic continues to weigh on shoppers and the economy, retailers lacking cash, that are heavily indebted, suffering severe and persistent sales declines, or some combination of those things, are vulnerable to bankruptcy or disappearing entirely. No matter how 2021 plays out, you can expect fewer stores and perhaps companies than today as the year begins.

  3. The generalist giants will try to consolidate their 2020 gains

  Walmart, Amazon, Target and Costco all saw growth last year ranging from very solid to explosive. Each of them got there in different ways and for different reasons, but those companies have a few things in common. They are huge, with vast cash and capital resources to invest in their businesses and capabilities. And all four are generalists to varying degrees, selling everything from basketballs to apparel to milk.

  Along with leaning on Amazon’s super fast delivery, pandemic-wary shoppers in 2020 flocked to the one-stop big-box sellers like never before. Their broad offerings meant customers could reduce their trips and, with them, their potential virus exposure. That had the effect of accelerating a longstanding trend of consumers ditching specialists for generalists as a matter of convenience and price. Walmart and Target have also made deep investments in their omnichannel capabilities and product offering that were paying off just as the pandemic shifted shopping habits.

  The question hanging over the year ahead is whether retail’s biggest players can hold on to customers they gained during the pandemic, or, on the flip side, whether smaller specialists can compete against the retail heavies.

  4. The distinction between DTC and traditional retailers will continue to blur

  Direct-to-consumer brands have grown in popularity over the past decade, but cracks in the model have begun to emerge in recent years. Some so-called DTC darlings have faced company culture issues, while others have revealed just how difficult it can be to reach profitability selling goods almost entirely online.

  And while these brands weren’t totally immune from the industry-wide disruptions brought on by the pandemic, they fared slightly better as consumers were driven online.

  Wayfair and Chewy — two companies that previously struggled to reach profitability under mounting advertising and marketing costs — have posted record results since the start of the pandemic. Wayfair reported two consecutive quarters of profits, the first time the retailer has been in the black since going public in 2014. The home retailer has benefited from both the category seeing a boom in recent months and more consumers shopping online. And Chewy, while not yet profitable, posted "record" net sales in its most recent quarter and grew its net active customers to 17.8 million.

  The model is also attractive to more traditional retailers, like Nike and Under Armour, which have touted the benefits of focusing on their direct-to-consumer channels over wholesale to boost profitability.

  The distinction between the two — pure-plays and traditional retailers — will further blur in the year ahead as the ways in which DTC brands adopt traditional practices like opening stores and traditional retailers adopt the direct-to-consumer model continue to shake out.

  5. Some pandemic pivots may not stick

  To retailers during the pandemic, pivoting and making quick changes meant survival. When stores began offering curbside pickup and contactless payments, and turned some locations into online warehouses, the purpose of a store was redefined. But with the rollout of vaccines, some changes might not be here to stay.

  The pandemic upended makeup testers and dressing rooms, and when customers return to physical stores, retailers will have to reimagine experiential retail. As demand for contactless fulfillment offerings like buy online, pick up in store surges, retailers will look for ways to make these services more sustainable.

  Growth was pushed aside during the early stages of the pandemic when a record number of stores shut down for good and survival became retailers’ main priority. 2021 will likely allow retailers more time to focus again on innovation, but still, new tools emerged in the midst of the pandemic as retailers looked to create socially distant experiences, like using augmented reality to test cosmetics, automated checkout tech and group video shopping platforms. Only time will tell which changes are built to last.

  6. The e-commerce boom will continue, but so will its challenges

  The pandemic spurred the growing share of sales that e-commerce took by historic numbers last year. But as more consumers grew reliant on making purchases online, the number of orders coupled with pandemic-driven employee shortage left retailers and postal services struggling to cope with the demand.

  Site crashes, late deliveries and faulty discount codes reflect badly on retailers, leaving customers unsatisfied. In fact, only 15% of consumers in a recent survey were happy with their online shopping experiences, according to Contentsquare. Giving customers richer and more personalized shopping is essential for retailers if they want to rank well on Google in 2021 and keep up with e-commerce giants.

  With store closures and social distancing measures that limit store capacity, retailers have no choice but to compete in an already crowded e-commerce space. Many brick-and-mortar stores have already permanently closed doors due to online competitors in addition to problems caused by the pandemic.

  Still, e-commerce platforms attracted more groups of customers in 2020 and will potentially continue to do so into 2021. Shopping app downloads, for example, reached 2.8 million on Black Friday — a new single-day record, according to preliminary estimates from Sensor Tower Store Intelligence.

  7. Apparel attempts to bounce back (or at least not bleed out more)

  Apparel was in trouble before the pandemic. Experts observed in 2019 that it was one of the most distressed segments of retail, and was suffering from the pitfalls of being oversaturated and overstored. That same year, most of the major bankruptcies were filed by companies that mostly or exclusively sold apparel, including Forever 21, Barneys New York, Charlotte Russe and Gymboree.

  Then, in 2020, trends that were problematic within the sector accelerated, leaving in their wake additional bankruptcies from department stores that chiefly sold clothing including J.C. Penney and Lord & Taylor, to specialty players such as J. Crew and Ascena filing Chapter 11. To add to the confusion, large swaths of the population were suddenly working from home and staying there because events and travel were canceled. It changed the way they dressed, with people who once reached for suits or dresses suddenly donning athleisure and loungewear.

  In short, the segment took a tremendous hit and the immediate future is about recovery. McKinsey & Company’s The State of Fashion 2021 report envisions two possible scenarios to get there. The first "earlier recovery" probability states that global fashion sales will decline by 0% to 5% in 2021, and is predicated on successful virus containment and swift economic restoration. The second "later recovery" scenario doesn’t have the apparel industry returning to 2019 levels until the fourth quarter of 2023.

  That means the possibility of additional specialty retailer bankruptcies or acquisitions. It also points to apparel companies increasingly relying on digital channels to sell products, even as demand is diminished "due to restrained spending power amid unemployment and rising inequality," according to McKinsey.

  8. Consumers will be stuck, and that’s a problem for retailers

  In 2020, as with so many other macro trends, the pandemic worsened the wealth gap.

  When Trump took office in 2016, the top 1% of households held more wealth than the middle class, a reversal from before 2010, and only the top 20% have fully recovered from the Great Recession, according to the Brookings Institute. The pressures on the middle class are a problem for the economy as a whole and for retailers in particular — both depend on a consumer with enough disposable income and financial confidence to buy more than they need.

  The pandemic strained both. Personal income in November was down $221.8 billion or 1.1%, disposable personal income fell $218 billion or 1.2%, and personal consumption expenditures fell $63.3 billion or 0.4%, according to the most recent estimates from the U.S. Bureau of Economic Analysis. Jobless claims are also "essentially stuck at a painful, inflated level due to the coronavirus surge," according to Robert Frick, corporate economist at Navy Federal Credit Union. Some 10 million jobs disappeared since February last year, and the holiday season was marked by bargain-hunting due to pandemic-related job and income loss, according to GlobalData. The Conference Board recorded a surprise deterioration in consumer confidence last month.

  Despite the promise of vaccines and extra savings from being stuck at home, the average consumer has reason to remain on edge this year, mostly because of the ongoing pandemic. "And as long as that surge continues, even with stimulus, we can expect more than 1 million Americans will lose their jobs weekly, based on state and federal measures," Frick said in emailed comments on the last day of 2020.

  9. New owners take center stage

  2020 brought in a surprising new class of retail owners that ultimately may change the trajectory of business models. Authentic Brands Group, which already owned a handful of apparel brands and licenses and eventually bought Barneys in 2019, teamed up with Simon Property Group again this summer to buylegacy retailer Brooks Brothers and then Lucky Brand. They had previously partnered to buy Forever 21 early in the year and Aeropostale in 2016.Now their 50/50 venture, called Sparc Group, is the operating partner for Aeropostale, Forever 21, Lucky Brand, Brooks Brothers and Nautica.

  Real estate companies got further into the mix, effectively turning mall owners into retail business owners. In arguably the biggest play of the year, landlords Simon Property Group and Brookfield Asset Management bought J.C. Penney’s department store operations at the close of 2020.

  Also on the scene is Retail Ecommerce Ventures, which snapped up the IP of multiple retailers including Modell’s Sporting Goods, Dressbarn and Stein Mart.

  Although the impact of shifting ownership may not be seen immediately, many questions remain regarding these players. Will brands become divorced from their operations? Are companies that were once household names going to lean into licensing? Are more specialty retailers going to end up selling their IP to conglomerates? And ultimately, how is it all going to impact the shopping experience?

  Source: Retail DIVE, January 12, 2021 (https://www.retaildive.com/news/9-retail-trends-to-watch-in-2021/593146/)

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• Retail in 2021: What will endure and what’s going to change?
  

  By Susan Reda, VP Education Strategy

  The United States will have a new president in the White House. “The Matrix 4” will hit the big screen, Tokyo hopes to host the Olympic Games and sales of CBD products will continue to climb. JPMorgan Chase & Co. and Morgan Stanley are feeling bullish about the stock market in 2021 and conversations about vaccines are more than likely to reach a fevered pitch.

  Unfortunately, the U.S. can also expect the long tail impact of the COVID-19 pandemic to be felt in the retail industry for months to come.

  As the nation collectively learned in 2020, it’s impossible to truly see what lies over the horizon. Nothing can topple predictions like a mysterious virus that brings the world to a virtual standstill for months.

  A year ago, NRF predicted tumultuous change in retail supply chains, a voracious appetite for resale and recommerce, and “blurred lines” in retail as companies worked to develop innovative ways to servicing and supporting the customer journey.

  We got those right. Still, like every other prognosticator, we had no clue of the looming pandemic or its disruptive effects.

  The biggest takeaway from 2020 is the shift to ecommerce; consumers have embraced online shopping with vigor and retailers have responded with the speedy rollout of new technologies, new apps and new ways of meeting shoppers’ needs. The words “contactless” and “frictionless” have quickly become part of the vernacular and companies that have managed to break the mold and adapt are winning.

  What’s ahead for 2021? Here are 10 predictions — plus one for good measure — that are likely to shape the next 12 months.

  Direct-to-consumer brands flexing partnership muscles and exploring models to differentiate from the pack will see disruptive growth and profitability.

  After a brief period of suspicion as to how these darlings would fair in the long term, it appears the DTC landscape presents plenty of possibilities. Nimble by nature, brands have introduced new categories (Allbirds, Casper) and are pouring new energy into perfecting their customer-obsession objectives (Stitch Fix, Glossier, Peloton).

  It appears the future is multichannel as brands such as Everlane and Birdies link up with Nordstrom, Headspace partners with Spotify, and wellness company Alo and beauty brand Tatcha team up in Animal Crossing. And lest you think there’s a dearth of new entrants, don’t forget CUUP, Prose and JUDY.

  Supply chain’s transformation has been accelerated by the pandemic, leveraged by 5G and underpinned by substantial investments in digital solutions. Good news: There’s no stopping the momentum now.

  If the C-suite were not already convinced supply chain disruption could have serious repercussions, they got the message loud and clear courtesy of COVID-19. The pandemic spawned a series of recalibrations throughout the global supply chain as retailers and manufacturers reexamined every step from procurement to sourcing and from reduced lead times to improved speed, resiliency and responsiveness.

  And those shifts will be ongoing over the next 12 to 18 months. Along with increased investments in all things related to logistics, expect more experimentation, particularly in dark stores, ghost kitchens, micro-fulfillment centers and malls masquerading as distribution centers.

  Spending on global reverse logistics technologies will spike in 2021 — forecast last year to hit $604 billion by 2025 — as retailers seek to alleviate a major pain point in the shopping journey and minimize the costs of returns. The quest to build a more sustainable supply chain lost some steam in 2020, but the vision for a more sustainable future and a reduced carbon footprint remains a key objective.

  Livestreaming will take center stage in 2021, with the potential to be one of the fastest-growing categories in the digital one-to-one ecosystem.

  Nothing beats the experience of shopping in person, yet livestreaming is the closest many retailers and brands have been able to come to physically connecting with their customers during the pandemic.

  The Interactive Advertising Bureau recently reported that livestream-generated sales are expected to double to $120 billion worldwide in 2021. Experts say digital savvy shoppers want more than just a product; they want to feel a connection to a brand. Thus, a growing number of brands are incorporating livestreaming into their strategy.

  Bon Appetit magazine’s Test Kitchen crew produced “The BA Test Kitchen Variety Show.” Estee Lauder hosted more than 1 million virtual try-on sessions globally in the first quarter and is also connecting with consumers through its Clinique Skin School with on-demand live streaming. And these examples are just the tip of the iceberg.

  Adoption of robotics technology, food delivery robots and autonomous vehicles are no longer considered a novelty, but it’s still shy of primetime status: Experimentation needs to accelerate, and costs need to come down.

  2020 was supposed to be a breakout year for robots in retail, perhaps even more so given the “hands-off” mindset that colored the past year. That wasn’t the case. Experiments and rollouts were sluggish as other projects took priority.

  Still, the objectives remain firm: In-store robots must accurately, repeatedly and autonomously collect and process data to solve business problems. Drones still have the potential to make certain trips obsolete, conserve energy and contribute to more sustainable practices.

  There are bright spots: Walmart is experimenting with driverless cars and flying drones; Walgreens has partnered with Wing and is testing drone deliveries in Virginia; Nuro’s autonomous vehicles are rolling across a handful of spots around the country; and robots are powering in-store inventory management and speeding fulfillment in distribution centers. Stay tuned.

  “Evolution” is the word for shopping malls. Shoppers will return after the pandemic, but malls need to be reimagined from multi-level boxes anchored by department stores to more enticing, smaller environments in sync with consumers’ needs.

  Shopping malls became an industry-wide punching bag in 2020. Faced with a decline in foot traffic, operators are being called upon to convert empty commercial space into mini-fulfillment centers for their retail tenants. If only it were that easy.

  Distressed malls appear to be an attractive target for companies such as Amazon and FedEx that are eying the empty spaces for micro-fulfillment. But flipping the model will require the properties to be rezoned and, in many instances, the shift from commercial to industrial is likely to be met with pushback from local residents.

  Other ideas that have been floated to repurpose mall spaces include senior citizen housing, health care facilities and community colleges, but the same challenges persist. Another bitter pill to swallow: The shift toward experiential tenants that began in earnest just a few years ago is disappearing.

  Touch-free technology will become mainstream.

  A tremendous amount of innovation during the pandemic was born of the need to reduce the frequency of touch. And shoppers have embraced the trend with gusto. Digital shopping has soared, contactless payments have quickly become the norm, and augmented and virtual reality — technologies that have been dancing on the edge of more widespread acceptance for the last few years — are poised for growth.

  Case in point: virtual fitting rooms. Using AR to facilitate virtual try-ons is proving to reduce return rates. Look for retailers to connect mirrors to social media — a move that will provide a more interactive personalized experience.

  Shiseido is using hands-free technology (along with artificial intelligence and algorithms) to remotely analyze skin and offer personalized suggestions. A Japanese company recently debuted the first-ever foot-operated vending machine allowing hands-free access. And it’s hard to ignore the elephant in the room: Amazon One, the new technology for its Amazon Go stores that lets shoppers pay for their groceries by scanning the palm of their hand. This one has enormous potential.

  Social commerce has the potential to grow faster than overall ecommerce — proving once again that, while consumers may not be meeting up in person, socially driven commerce is uniquely embedded in their DNA.

  If asked to identify the indisputable breakout trend for 2021, no doubt it would be social commerce. The idea of retailers and brands creating shopping experiences via social media has certainly taken off. Its staying power is undeniable for multiple reasons, including the exclusive feelings these opportunities create, the chance to build purchasing intent and the frictionless payment process that gives new meaning to the word “seamless.”

  Technavio recently reported that the social commerce market is poised to grow by $2,051 billion during 2020-2024, progressing at a compound annual growth rate of almost 31 percent.

  Who’s leading the charge? Facebook, Instagram, Twitch, TikTok, Pinterest and Spotify.

  On-demand manufacturing is poised to have its day in the sun.

  For years, concepts like mass customization and personalization have peppered predictions about the future of fashion. Now comes on-demand manufacturing. To be fair, it’s not new, but using on-demand strategies to create products lets brands respond faster to changing customer demand, create products as orders are placed and keep minimal amounts of stock on hand.

  All of that meshes with the ethos of today’s shoppers. In addition, on-demand manufacturing improves sustainability and moves the needle closer to the goal of zero waste. It could even shift the pendulum a bit toward nearshore sourcing.

  The challenge is good data and technology that allows companies to optimize that information. Zara is the poster retailer for on-demand manufacturing, but DTC brands are quickly learning the ropes.

  Digital transformation defined 2020, but that was just the jumping off point for what’s to come.

  The last nine months alone have produced more digital transformation than the last decade. Retailers, manufacturers and consumers alike were forced to change and what appeared to be quick fixes in the early days have quickly become habits. The surge in online shopping, the race toward frictionless payments, the quick deployment of curbside pickup and the endless flurry of apps created to enable all these changes are just the beginning.

  What does this mean for 2021? Looking for ways to monetize customer data is table stakes for retailers; the challenge is doing so in a true omnichannel ecosystem. The companies that get it right will be omnipresent for shoppers — connecting online, in stores and over social commerce and making sure every touchpoint is frictionless.

  A key enabler of all things digital is 5G. It may have been over-hyped a year ago, but 5G is vital as we rush headlong into 2021. If remote work, nonstop video conferencing and stepped-up digital collaboration have taught us anything, it’s that reliable connectivity and greater bandwidth are imperative. Consumers can’t afford to be disconnected, so it goes without saying that neither can businesses.

  Paying for a purchase in one fell swoop is so 2018 — shoppers want options every step of the way.

  The old-fashioned model of paying for items in full is fading fast as the next generation of shoppers embraces pay-over-time models and subscriptions. What began as a novelty is now available online, in-app and in-store. And it won’t be the only creative method retailers come up with to keep shoppers shopping.

  Look for more subscription payment options such as Klarna, Affirm and Afterpay to gain ground; these types of options are borne of digital media, a la steaming services and gaming, but retailers are looking to get in on the action.

  Other potential game changers in the payment space include rental companies such as Feather and Fernish that give consumers the chance to rent a room of furniture and pay for it monthly. Then there’s the rent-buy model, which allows aspirational shoppers to rent designer pieces for a fraction of the full price and buy at a reduced cost.

  Trade-ins are becoming a thing, too: Think Levi Strauss & Co. and Patagonia. Just don’t stop thinking of creative ways to extend payment options, because the 2021 shopper demands it.

  And, just in case 10 predictions for 2021 are not quite enough, here one more to consider: The death of third-party cookies will be a good thing for marketers, but no one expects the changing environment to yield positive outcomes quickly.

  The rise of ecommerce, coupled with the elimination of cookies, has made data-rich “walled gardens” a priority, yet brands face new privacy regulations and compliance measures that require investments in customer data platforms. As retailers seek the next holy grail of targeting, look for those who have giant databases and/or partnerships to win.

  Source: NRF Blog, December 2, 2020 (https://nrf.com/blog/retail-2021-what-will-endure-and-whats-going-change)

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• Retailers: Hygiene, personalization, and curbside pickup will remain in centers when COVID-19 exits
  

  Retailers: Hygiene, personalization, and curbside pickup will remain in centers when COVID-19 exits

  By Al Urbanski

  Several features that have taken hold in malls and shopping centers during the pandemic will continue to maintain their presences long after COVID-19 departs, according to three leading retail real estate managers.

  “Curbside pickup is about safety now, but people have discovered it also saves time in purchasing products they don’t want to dedicate a lot of effort to,” said Nordstrom VP of real estate John Dolson in a panel discussion about the current holiday shopping season at ICSC’s RECon New York virtual event this week.

  “People often know what pants they want and they’ll order them online, but they don’t want the box on their doorstep so they’ll drive in and pick it up. That’s a fundamental change that we’ll take away,” Dolson said.

  Longtime Container Store VP of real estate Virginia Richardson said tech-powered customer engagement techniques will continue to expand as retailers widen their omnichannel operations.

  “There was a big phrase circulating in the industry a few years ago that we had to deliver to the customer where, when, and how they were going to shop. Now we’ll see the realization of that because things like personalization and commoditization have come to the forefront,” Richardson said.

  Senior VP of realty for Walmart International JP Suarez identified three areas that will endure after the pandemic: improved hygiene, health-oriented products in exercise and nutrition, and more locally supplied items. The last will take the longest to integrate, he noted.

  “Locally raised and sourced products are good for shifting supply chains, but beyond that we’re seeing increased interest and awareness from customers about where they’re getting their stuff from,” Suarez said. “We’re sure that local suppliers can develop their businesses in parity with ours, but it’s going to take a while. It’s hard to find reliable local suppliers that can produce at the volumes we need.”

  Source: Chainstore Age, December 9, 2020 (https://chainstoreage.com/retailers-hygiene-personalization-and-curbside-pickup-will-remain-centers-when-covid-19-exits)

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• Mitigating COVID-19 and Other Airborne Pathogens in Stores
  

  By Brandon Marzley

  Retailers across the country are looking for ways to improve their HVAC systems and internal air quality in response to the COVID-19 pandemic.

  When it comes to maintaining air quality and mitigating airborne pathogens like COVID-19 inside retail facilities, there is no one size fits all solution. Every retailer can determine the right control measures for their unique building and circumstances by taking steps to understand their facility.

  The first critical step is to perform a risk assessment of the building. An effective assessent starts with a comprehensive evaluation of building systems and the identification of high-risk areas.

  Retailers should then consider the occupancy type of the building, the maintenance implications of the various options, and how much they want to invest in the initial cost and future operating costs.

  Once we perform the risk assessment and talk through the other areas of consideration, we ask our retail clients if they want a temporary fix for the current situation or a permanent solution for their facility.

  TEMPORARY MEASURES

  Temporary control measures such as portable air cleaners and operating changes to the existing HVAC system will focus on the current pandemic. Operating changes might include increasing ventilation, keeping systems fully operational for 24 hours, or using humidifiers in the facility.

  These control measures are frequently used by retailers looking to make limited impacts on their facility and budgets and are not in need of a long-term solution.

  BIGGER IMPACT

  On the other hand, permanent control measures not only assist with the current COVID pandemic but may also help with future viruses (ex. flu season) and will improve the overall air quality for the long run. Such measures generally include improved ventilation, enhanced filtration systems, bipolar ionization, and adding germicidal ultraviolent light to the airstream.

  These solutions often have a larger impact to the facility’s existing HVAC systems and a higher initial cost but can offer long-term solutions for future uses and concerns.

  When making these choices, it is recommended that retailers seek help from an architectural engineering firm that is independent of any manufacturers or contractors.

  This way, retailers can take advantage of the firm’s experiences with all types of facilities and ensure their needs are being met without product bias. Here at GPD we have been using our experience in designing healthcare facilities to help our retail clients find solutions that are reasonable and effective in solving their air quality needs.

  No matter which control measure option is chosen by a retailer, it is important to follow the CDC’s findings as they relate to COVID in addition to the industry standards laid out by experts such as the American Society of Heating Refrigeration and Air Conditioning Engineers (ASHRAE), the health department, and the EPA.

  Brandon Marzley, PE is the mechanical engineering department head at GPD Group, a nationally licensed full-service architectural and engineering firm delivering services in more than 20 sectors, including retail, from 14 nationwide offices.

  Source: Chainstore Age, December 9, 2020 (https://chainstoreage.com/mitigating-covid-19-and-other-airborne-pathogens-stores)

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• Is Cashierless Tech Ready For Prime Time?
  

  By Sam Silverstein

  Even as other food retailers have embraced self-checkout stations as a way to reduce front-end bottlenecks, New York grocer George Zoitas has turned them away.

  While Zoitas, who is CEO of Westside Market, a chain of seven grocery stores in Manhattan, takes pride in his efforts to use technology to run his business, asking people to interact with machines that were helpful but also very temperamental was a nonstarter. So in 2019, the year after he decided to try self-checkout technology, Zoitas parted ways with it.

  "We didn’t like the self-checkouts whatsoever. We felt that they weren’t efficient in controlling any type of shrinkage associated with them," Zoitas said. "And it’s not per se that people intentionally tried to steal from them. It’s just they would weigh the item, and there would be frustration. You don’t know if it scanned or if it didn’t. It created a lot of heartache versus efficiency on time and execution and getting people out."

  In place of the self-checkout system, Zoitas has installed a cashierless-payment system in one of his stores that lets customers use their smartphones to scan and pay for items. Behind the scenes, location-tracking technology charts people’s movements and records where they are when selecting merchandise within a few inches, giving him insight into shopping behavior similar to what online shopping systems can provide.

  Early customer acceptance of the self-scanning service has been positive, and Westside Market is preparing to deploy it at its other stores within the coming weeks, Zoitas said.

  Westside Market’s system is part of a breed of technology that backers say is ready to make a big impact on the way people shop in retail locations by eliminating lines, reducing touch points and otherwise speeding up the shopping experience. While those benefits have guided the technology’s development from the start, the safety concerns posed by the pandemic have hastened its development, industry officials said.

  An enduring benefit of next-generation checkout systems may be their ability to provide data about customers’ in-store habits. In addition to eliminating checkout friction, Westside Market’s system enables retailers to deliver personalized coupons or other advertisements to a customer’s smartphone that are triggered as they move around the store, said Will Hogben, CEO of FutureProof Retail, which worked with SIRL, a provider of location-tracking technology, to build Westside Market’s system.

  "We’re really taking capabilities that were developed in the e-commerce space and now leveraging them back into the physical store," said Hogben, whose company also worked with SIRL to develop a cashierless checkout system for New York’s Fairway Market. "The same recommendations engine that a retailer might be running on their website is now also able to [handle] sales in the store."

  A quest to eliminate checkout lines

  While checkout innovations can be exciting for shoppers, the reality is that they’re expensive to implement and don’t always produce a return for grocers. Mobile checkout programs had received a lukewarm reception before the pandemic, with Walmart discontinuing its Scan & Go program in 2018 due to low customer interest. So although the coronavirus has given technology companies a boost, the technology they have developed still has to prove valuable in a post-pandemic world.

  Westside Market’s system is among several answers to the autonomous checkout technology Amazon operates at its Go and Go Grocery stores that are beginning to hit the market. This year, Amazon further raised the stakes by launching its camera-equipped shopping cart known as the Dash Cart, which is an option for shoppers at the company’s growing number of Amazon Fresh grocery stores.

  "The fact that Amazon has now entered [grocery] with tech in mind is going to force retailers to rethink their strategy," said Shariq Siddiqui, a former Amazon product manager who now runs Veeve, a startup that developed a smart shopping cart to compete with the e-commerce giant’s Dash Cart.

  When it come to checkout, retailers have a range of options that are increasingly popular with pandemic-stressed shoppers, including mobile wallets and mobile scan-and-pay systems. Tech companies are also focusing on developing systems that, like Amazon’s, permit customers to simply take items off a retailer’s shelves and walk out. After years of development, this technology, which identifies items using a technique known as computer vision, has recently started to show up in retail locations and is poised eventually to make its way into large-scale grocery stores.

  "We’re just now at the point where we’ve got a product that’s refined enough … that is seamless to deploy and cheap enough to deploy that it doesn’t really change how [retailers are] running their operations," said Jordan Fisher, CEO of Standard, which works with retailers to install computer vision-based checkout technology in existing stores.

  Chartwells Higher Ed, a division of international foodservice company Compass Group that runs dining and retail facilities on college campuses, is one of Standard’s first customers. In October, Chartwells began entirely cashierless operations at a convenience store it operates at the University of Houston using technology supplied by Standard.

  In addition to Chartwells, Standard runs its own automated convenience store near its headquarters in San Francisco. The company, formerly known as Standard Cognition, is also piloting its technology through a partnership with Alimentation Couche-Tard of Canada, operator of the Circle K convenience store chain.

  The high levels of foot traffic the University of Houston store typically sees as students rush through is a central reason why Chartwells decided to try Standard’s technology, according to David Riddle, vice president of operations for the company and district manager for University of Houston System Dining.

  "Class breaks are a little bit like a sporting event at half-time," said Riddle. "Everybody wants to eat at the same time, and they’ve all got 15 to 30 minutes to do it. That’s where this completely cashierless, grab-what-you-want technology will help us drive a better guest experience."

  Chartwells has essentially turned the 53,000-student University of Houston campus into a testing ground for retail technology. The company deployed a fleet of 30 delivery robots from Starship Technologies to transport food orders on the campus in 2019, and in August installed a salad-making robot.

  Riddle said getting customers through stores faster has long been on his mind, adding that the technology has arrived just in time to reduce queuing as the pandemic has put a spotlight on the dreaded checkout line. In 2021, Chartwells plans to add Standard’s technology to a 3,000-square-foot store on the campus.

  "The need has been there, and the idea has been there for a long time," Riddle said. "We were just really patiently waiting for the technology to arrive, and we jumped on it."

  Remaking the checkout experience with computer vision

  Among Standard’s rivals in the nascent market for systems that use cameras to identify products as customers pick them up is Grabango, which has also made headway in bringing its technology to market this year. In September, the company launched its first commercial deployment at a Giant Eagle Get+Go convenience store in the Pittsburgh area retrofitted with its system. On Nov. 23, Grabango added the ability for Giant Eagle customers to purchase beer at the store using its system, according to a spokesperson for the technology company.

  "We are now no longer a proof-of-concept experience. We are a commercially viable product that’s ready to be expanded across retailers and across geographies," said Andy Radlow, Grabango’s chief business officer.

  Consumer response to Grabango’s first commercial deployment, at a Giant Eagle Get+Go convenience store in the Pittsburgh area, has exceeded expectations. Three-quarters of people who have tried the service have used it at least one more time within 30 days, and of that group, two-thirds have used it at least five times, Radlow said.

  While Grabango’s technology can be used to record details about people’s shopping patterns and deliver targeted promotions, the company’s main focus is on providing retailers with the ability to make shopping more convenient for customers, Radlow said.

  "There’s a sense of urgency that’s been magnified by the pandemic that it’s important to eliminate lines for obvious safety reasons," said Radlow. "It’s a real bonus when people don’t have to have a cashier touch every one of their food items after that cashier has met with hundreds of people. So there’s more pressure than ever to get this out there."

  Grabango is working with Giant Eagle to deploy the technology at additional locations, but Radlow declined to offer a timeline or other details.

  Radlow said that Grabango’s technology can be scaled to operate in a full-scale grocery store, noting that the company is currently testing its system in a 40,000-square-foot supermarket in the United States operated by a grocer he described as a "major regional player" but declined to identify. "We are working through all the user cases to bring it into commercial service," said Radlow.

  Radlow acknowledged that people have been skeptical that Grabango’s technology can be used in retail environments larger than a convenience store. "There’s been companies that say, ’Excuse me, you can’t operate in anything larger than a small-format store, right?’ And that’s not true … we’ve always been designed for scale," he said.

  Grabango’s ongoing efforts to bring its technology to standard-size supermarkets set it apart from Standard, which is currently focused on the convenience store sector.

  "Our current go-to market is very focused on convenience because of the shopper network we’re trying to build," said Fisher. "We’re particularly interested in urban settings, at least for this initial wave of deployments."

  Standard is, however, planning to expand into the grocery-store space at a later point, Fisher said. "We’re certainly having the conversations with groceries, because that will come next for us in terms of the verticals that we’re tackling. But in terms of how do we get this into shoppers hands as quickly as possible, for us it’s about convenience today, grocery tomorrow."

  Detecting items all at once

  Other companies have developed next-generation payment terminals that can identify multiple items at once when customers place them on a platform. These devices don’t rely on cameras mounted around a store, making them particularly easy to install in a store, said Jack Hogan, director of strategic partnerships for Mashgin, which provides self-service, computer vision-equipped checkout terminals for use in places like airports, sports arenas and cafeterias.

  Hogan said his company’s decision not to require people to install a smartphone app to use its systems, as other system do, is a simple yet important differentiator. In November, the company recorded the ten-millionth transaction recorded by its equipment, according to Hogan.

  "We think that we can take a big chunk of the market in this specific space, because it’s not only backward-compatible for our customers, it’s backward-compatible for the end user," said Hogan. "They understand the concept of checkout. They understand the process of checkout. They just wish that there wasn’t a person breathing on them or want the ability to go at their own pace."

  Smart-cart maker Caper also sells standalone checkout unit that use computer vision to identify products.

  Gary Budd, director of strategic planning and execution for Giant Food, which has long offered customers handheld barcode-scanning devices that let them skip cashier lanes, said the pandemic has stepped up customer interest in the technology, which it calls Scan It. Giant offers the service in about 120 of its 164 stores and plans to bring it to additional stores, Budd said, adding that the retailer has recently improved the in-store connectivity that allows the units to function.

  The mid-Atlantic grocer is examining options to step up its cashierless technology, but has no immediate plans to move beyond Scan It, which also allows shoppers to use their phones to identify items, Budd said.

  "It wasn’t a service that a lot of people used. We provided it as a convenience. But now, there’s a lot more usage because of this COVID situation," Budd said. "My hope is that over time, similar to what we have seen with pickup, more and more people will start to steer toward the Scan It process."

  Source: Retail DIVE, December 3, 2020 (https://www.retaildive.com/news/is-cashierless-tech-ready-for-prime-time/589908/)

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