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We look back over a turbulent year. The pandemic has brought about a number of changes. While some retailers were swamped by orders, others were forced to look into new business models. Let’s also take a look into the future: what does 2021 hold in store for us?
We asked some retail experts about what’s in store for the retail sector going forward.
The difficulties brought about by COVID-19 will have a negative impact on the shopping experience in high street retail well into 2021. The winner in these circumstances is online retail. In 2021, there will be increased market consolidation in the retail sector. Some of the winners include digital retail platforms such as brack.ch, galaxus.ch and zalando.ch. And the losers include retailers which at their core think and act with bricks and mortar in mind. Branch networks need to continue being thinned out and retail store space as a whole needs to be reduced. For some retailers that were operating close to the break even point even before COVID-19, 2021 will be when they shut up shop. The growth of international online retailers such as Amazon, Zalando and About You will clearly outperform that of the local, domestic competition in 2021.
Matthias Bucheli, Head of the Digital Commerce Competence Center, Post CH Ltd
Many retailers in 2021 are finding themselves in the midst of the “second” digital transformation, moving away from desktops and mainly towards mobile interfaces. The e-commerce retailers which have focused on consumers shopping from their desktop computers will have just as difficult a time as high street retailers that have so far missed the boat when it comes to digitization. From 2021 onwards, online shopping via desktop PCs will face the same difficulties as high street shops have encountered from 2010−2020. A growing number of new retailers are entering the market and personalization will become a matter of course due to the increasing retail dominance of WhatsApp and other apps, while the desktop generation of retailers will still be working on the next filter option that soon no-one will need.
Alexander Graf, co-founder and co-CEO, Spryker Systems GmbH
E-food, which has ebbed and flowed over the past few years, was heavily pushed along by COVID-19 in 2020 and is also set to become one of the fastest growing industries in the next year. Along with e-food, issues such as sustainability and direct-to-consumer will also increasingly challenge the retail sector. The number one in the market, Digitec Galaxus, has already launched some initial measures and offers customers the option of offsetting carbon emissions for each order. 10 percent of customers now opt to offset their carbon emissions; for the under-20s, it’s already 16 percent. Manufacturers will also open new, direct sales channels in 2021 in order to promote closer proximity to customers. This development will change the retail world significantly and shift bargaining power in the favour of manufacturers.
Andreas Wüthrich, Head of Digital Commerce Consulting, Post CH Ltd
COVID-19 makes it more difficult than ever to consider the outlook for the next year. But one thing is sure: high street retail will never be the same as it was before the pandemic. It will certainly become more digital, and customers had long since become accustomed to buying an increasing range of product categories online, even before the lockdown. Those without an online presence will continue to lose a huge share of their market. Retail concepts will also become more networked as this enables true added value to be offered to customers. The “omnichannel” buzzword will finally come into its own. Click and collect and booking delivery slots online are just two examples of services that are becoming significantly more relevant. But most of all, the retail sector will become more customer-centric, with real shopping experiences and services extending beyond the product itself.
Dr Kai Hudetz, Managing Director, IFH KÖLN
The crisis has pulled high street and digital retail out of their comfort zone. Beyond all the trends, the thing that counts the most is having the courage to fundamentally change structures, products and business models. The crisis will continue to serve as a trend accelerator in in 2021: e-commerce will boom, digital technologies will serve as a tool to contact consumers, cashless and contactless payments will gain even more of a foothold, and local commerce will experience a new upturn. The next trends will be: next safe service – for more security in retail, circular fashion – a second lease on life for the fashion industry, and eco-delivery – the last mile becomes sustainable.
Markus Peter, Organizer, Connecta, Post CH Ltd
2020 has shaken up retail. During the lockdown, online shops were the only option available to many companies to sell their products. Companies without an online shop had a tough time. No online shop – no revenue! Many companies decided to throw together an online shop very quickly and were able to gain some initial experience from this temporary solution. Online purchases will continue to grow in 2021. Strategically developing an online shop takes specialist knowledge and experience, but where can these skills be learned? A number of training courses on e-commerce and online retail have now sprung up in Switzerland providing a range of specific knowledge Universities of applied sciences are also offering comprehensive courses with a certificate at the end. E-commerce skills include: online shop technology and evaluation methods, search engine marketing, online advertising, agile project management methods, logistics and, most importantly, GDPR (Switzerland/EU).
Martina Dalla Vecchia, professor at the University of Applied Sciences and Arts Northwestern Switzerland FHNW
(Online) retail will be dealing with the following topics in 2021:
Marketplaces: all online retailers need to consider how they can use marketplaces that are becoming more and more powerful, while at the same time devising ways to position themselves against these marketplaces.
Personalization: the customer wants to be taken seriously as an individual. Be it through advertising channels, delivery offers or payment options. The times of one-size-fits-all are definitely gone.
Adaptability: rapid decisions and changes will also be needed in 2021. Those who can’t respond quickly will lose out. Sustainability: environmental awareness is increasing with an ever growing number of customers. The expectations of these customers in terms of logistics, packaging concepts and ethics are also mounting.
Paul Walker, Head of Key Account Management (Fashion, Home & Living), Post CH Ltd
2021 is set to become a year of “tipping points” for many different non-food providers, moving them online from the high street. Online, coronavirus phases 1 and 2 have catapulted many product areas that had previously been “underestimated” to a more than 10 percent share of revenue in the overall market. Only once this threshold has been reached do new ways of thinking and looking at things take hold. Furniture, DIY, garden, sports equipment and beauty/health have been able to grow to such an extent that structural issues for these product ranges now also need to be scrutinized. Retailers can take the changes in domestic electronics or fashion as a benchmark or blueprint for their ongoing development. They should anticipate from an early stage what they can expect. Focusing or tidying up customer-facing areas, intensifying direct marketing, personalization, excellent delivery logistics and so on will be the challenges of 2021. Or more simply: stay relevant and visible for the future!
Patrick Kessler, Managing Director, Handelsverband.swiss
It can be taken as a given that sustainability in Swiss online retail will continue to gain in importance. First and foremost, online shops will provide better information about sustainability aspects, increase the proportion of sustainable products in the range and offer customers more sustainable packaging. There’s still potential when it comes to shipping for online shops and logistics providers to work together. Various companies also launched pilot projects, initiatives and innovative solutions in 2020 – be it same day delivery without any packaging, carbon neutral shopping or reusable packaging. One year has passed and we can start to take stock of their progress. I see the linking of sustainability and the customer experience as a success factor.
Dr Thomas Wozniak, research coordinator and lecturer at the Institute of Communication and Marketing IKM at Lucerne University of Applied Sciences and Arts
In 2020, QoQa and all the otters had to demonstrate our agility to address people’s concerns and continue providing our little bit of madness to the Qommunauté, while helping as many people as possible. Even though, despite all the turmoil, the figures were very good, we are most proud of having offered appropriate, effective solutions during the initial stages of the health crisis (welQome and DireQt). The world will clearly continue to change over the coming months. There will undoubtedly be areas that will require far-reaching transformation: leisure activities, life at home and in the office etc. As we don’t have a crystal ball, all we can do is continue giving our all. I’d like to say a huge thank-you to everyone – whether in the back office, at the counters or working in delivery at Swiss Post – without whom our efforts would be in vain. I wish them all the most wonderful 2021!
Pascal Meyer, CEO at QoQa.ch
Online retail experienced a boom like no other in 2020. Companies lacking an online sales channel responded creatively during the lockdown and came up with their own solutions within a very short space of time. This is a very welcome development for Swiss retail. On the flip side, many new consumers experienced how easy and convenient online shopping is. For them, 2021 will see this convenience become standard. In my opinion, it’ll be important for newcomers to lockdown e-commerce to continue expanding their solutions for 2021 to ensure these expectations can be met. Holding onto consumers after the second wave will take long-term solutions, which is no small challenge to all those who suffered heaviliy in 2020, but is also an opportunity to push ahead with digitization along with their customers. Here’s to a digital 2021!
Michael M. Nussbaumer, Head of CAS Online Shop and Sales Management, Lucerne University of Applied Sciences and Arts
Product availability and excellent customer service will be the main drivers for (online) retail in 2021. 2020 saw tremendous acceleration and online shopping became the top buzzword for all sectors. This unexpected leap has painfully demonstrated to many companies how fragile logistics and customer service can be. “Currently unavailable” or “Please be patient: our customer service is handling an unexpectedly high volume of requests” became standard responses faced by consumers. Consumers may be willing to tolerate this for the time being, but the shift to online consumption is here to stay and needs addressing. The new expectations will be aligned accordingly. Major players such as Amazon and Zalando that can deliver within one to two days and offer good customer service are setting the new standards. The number of platforms and companies that can catch up to this level will be a very decisive factor.
Samuel Wenger, Head of Direct to Consumer, On Ltd
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This is our final blog post for this year.
We’d like to thank all our readers and contributors for their support. It was an exciting year and one not short of topics.
We’ll be back in January 2021 with interesting blog posts all about digital retail.
Let us take this opportunity now to wish you a merry Christmas and a successful 2021.