3 Trends Shaping Post-Pandemic Retail
As we witnessed empty storefronts mounting — along with boxes piling up on porches — it became clear last year that the pandemic was having a massive and rapid impact on the retail landscape. You weren’t imagining or exaggerating those boarded-up storefronts. In 2020 alone, 30 major U.S. retailers filed for bankruptcy, closing more than 9,500 stores.
However, as some retailers waved the white flag of surrender to the pandemic, others saw their sales soar to new heights. Reports have Amazon.com raking in more than 50 percent of all e-commerce sales last year. With its unlimited range of products through its third-party marketplace model, Amazon was well positioned to cater to people who were homebound and in desperate need of a range of items that local stores seemed incapable of stocking.
While the horizon isn't as clear on the COVID-19 front thanks to virus variants, the dust has settled on the retail landscape and some significant shifts are underway. Storefronts remain empty and there are gaping wounds in retail that need to be filled. At the same time, neither consumers nor businesses are prepared to surrender all their dollars — or the market — to Amazon, and they don’t have to. In fact, 33 percent of Amazon sellers said they plan to start selling on other e-commerce platforms in 2021, and 21 percent plan to launch their own e-commerce store.
Smart entrepreneurs and businesses are ready to step in, leveraging new technology to fill the void left by those shuttered retailers. These are the three biggest trends we see shaping retail in the next 12 months.
Shopping Your Passion and Your People
Our allegiances — whether to a particular hobby, sports team, or political party — can play strong roles in our decision making, and they will increasingly play a role in where we shop. As the barriers to entry for having online marketplaces have changed, it's easier than ever for groups with built-in communities to add a commerce component to their online presence. This will lead to the emergence of community-driven shopping with groups of like-minded people with shared interests or expertise convening around preferred shopping sites. Fishbrain is a great example. One of the world’s most popular fishing sites, the company has created a marketplace with more than 12,000 products for their 9 million highly engaged users.
The Kardashian Effect
More and more future retailers will take advantage of the fact that they have a head start at success simply by virtue of the fact that they’re famous. While that’s certainly not a guarantee of retail success, having a platform and an established brand is a significant first step. It used to be that the key to success as a merchant required having long-standing relationships with suppliers, skill in negotiating exclusive sales contracts, and making smart choices for big investments in inventory, to name a few.
Now there’s no need to invest in warehouses or to take on any risk stocking inventory that might not sell. This has cleared the decks for many brands that would have otherwise stayed on the sidelines. Having an established personal brand and platform can be a surefire way to attract shoppers, and is increasingly becoming tantamount to having any previous experience or expertise in retail. This is why we will continue to see more and more nontraditional players taking the lead (hello Gwyneth Paltrow and Reese Witherspoon). And it’s not just celebrities. Any business looking for additional revenue streams would be smart to look into adding marketplace capabilities and many already are. Look no further than Netflix. With more than 200 million subscribers, it's dipping its toe into e-commerce with show-related merchandise. We expect sports teams, media companies, and others will soon follow suit.
Haven’t Got Time for the Pain
E-commerce in all forms will continue to flourish because convenience is paramount for consumers now more than ever. Looking at consumer behavior post-COVID-19, an IAB analysis revealed a historic retail reset: 25 percent to 33 percent of all consumers intend to reduce major out-of-home activities when the coronavirus crisis ends. Additionally, the number of trips to stores in person or online today is 35 percent of pre-pandemic levels and unlikely to fully rebound. This points to the trend of shoppers favoring one-stop shops. In person and online, consumers are more likely than ever to favor retailers that combine multiple needs in one visit. E-commerce retailers that look ahead to curate a selection of like-minded products and create “stores within stores” will win out.
These trends, of course, are just the beginning. But after 18 months of highs and lows for the industry, it’s an exciting time ahead when we're sure to see new entrants addressing consumers' needs.
James Stirewalt is the president of Marketplacer US. Established in Australia in 2016, Marketplacer is recognized as one of the world’s leading providers of online marketplace software, specializing in developing scalable and successful marketplaces for businesses around the world.
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Jim Stirewalt is a market maker with over 25 years’ experience in building and executing go-to-market strategies for small to very large enterprise. He has had a career of developing teams that exceed annual sales and revenue budgets by forging tightly aligned and motivated organizations, explicitly focused on driving customer success. Jim is skilled at developing new markets through orchestrated product & service planning, M&A, marketing, channel development and strategic selling enablement.
Jim became President of Marketplacer US in February 2021. Established in Australia in 2016, Marketplacer is recognized as one of the world’s leading providers of online marketplace software, specializing in developing scalable and successful marketplaces for businesses around the world. Stirewalt’s mission is to build a world-class team of leaders, sellers and customer success experts, with the unified goal of establishing Marketplacer as the online marketplace platform of choice in the US.