By Jessica Binns on December 21st, 2020 [Full Article]
If the experts are reading it right, the sun might be setting on sweatpants’ moment in the spotlight.
With coronavirus vaccines arriving just as the calendar is poised to flip forward into 2021, experts well versed in all things consumer believe the Instagram generation is set to put on an unrivaled display of jet-setting, selfie-worthy bacchanalia in the year to come. From her perch as publishing director for the likes of Seventeen, Cosmopolitan and Women’s Health, Nancy Berger has a bird’s eye view of what young women want, and among Gen Z and millennial-age consumers, she says, pent-up demand for travel has reached at an all-time high.
And consumers who can’t wait to quit quarantine won’t be skimping on their sun-soaked, far-flung adventures, predicts Lucy Lieberman, chief marketing officer of Tablet Hotels, whose boutique properties bring travelers everywhere from Mykonos to Normandy to Amalfi to Los Angeles. Those with the means to escape from the pandemic unscathed will celebrate their emergence from Covid-19 confines by booking “over-the-top trips and stays at incredible hotels,” added Lieberman, noting that the latter six months of the year will “look like the post-Prohibition era.”
All of this spells good news for battered and embattled fashion retail, where sales have fallen off a cliff as consumers swapped suits, pencil skirts and stilettos for sneakers, leggings and loungewear. But big trips mean new outfits for a good portion of social-obsessed shoppers, bringing a glimmer of hope that the pandemic’s economic devastation might be short-lived. William Susman, managing director at business management consultant Threadstone Advisors, echoes this sentiment, noting that a massive consumer shift in spending will benefit occasion-ready garb and dressy fare, leaving pandemic-friendly categories like home and backyard-appropriate goods in the dust.
Other experts in the Retail Influencer Network, managed by Berns Communication Group, also sounded off on where consumer spending seems to be heading. First Insight CEO Greg Petro believes the work-from-home movement is here to stay, but many employees will cherish the chance to put together an outfit and make an office appearance from time to time.
Shopping, stores and more
Stores have already been shrinking, and that trend is set to continue as retailers focus on localizing their assortments and curating smaller footprints that shoppers can easily navigate, according to Sandra Campos, CEO of Project Verte, former CEO of Diane von Furstenberg and Founder of Fashion Launchpad. She also believes retailers will invest in microfulfillment centers in cities and malls to meet online shoppers’ delivery and pickup demands. Nitin Mangtani, founder and CEO of PredictSpring, agrees, noting that curbside pickup and ship-from-store fulfillment will beat orders fulfilled from warehouses in major metropolitan areas as brands create more smaller-format fulfillment centers.
Many consumers rediscovered, or rekindled their affinity for, local small businesses during the pandemic. That movement has legs, according to Retail Minded founder Nicole Reyhle, and mom and pops will strengthen their omnichannel offerings by incorporating the tech that has long given larger retailers an advantage.
Is livestreaming finally going to break through? The answer is “yes,” predicts founder and former Build-A-Bear Workshop CEO Maxine Clark, who says stores will embrace the real-time video technology as a means of engaging with customers and building new personal shopping experiences.
Meanwhile, Andy Ruben sees an “all-out battle” for foot traffic once shelter-in-place orders are a thing of the past. The founder of the platform powering resale for brands says merchants will be judged by the early traffic and sales numbers they generate at that point, similar to how Black Friday results are seen as a gauge of holiday success. However, Ruben says retail will need more tricks up their sleeves beyond discounts to drive footfall, encouraging brands to explore special incentives like dangling gift cards for any goods they want to trade in for resale.
What will happen to the store-based business buckling beneath the weight of pandemic-induced disruption? Peter Fader, professor of marketing at the University of Pennsylvania’s Wharton School, believes that nontraditional buyers will swoop in to buy the assets of brick-and-mortar retailers that can’t wait out the recovery. He predicts an influx of unorthodox suitors, from mall operators, e-commerce and tech firms, and even some health-tech and fintech firms, will expand their brand portfolios through acquisitions that unlock new distribution channels and augment their points of contact with consumers.
Next year, mobile apps will drive 45 percent of all e-commerce sales, predicts Miya Knights, publisher of Retail Technology, while Sucharita Kodali, principal analyst at Forrester Research, confirms expectations that more brand manufacturers will sell directly to consumers as the “MTC” trend gains traction.
Gen Z, it turns out, could be the biggest “winners” coming out of Covid, says Keval Desai, general partner at InterWest Partners. Making up roughly 30 percent of the global population, these throngs of digital and social media will have been largely untouched by the health impacts of the pandemic, while benefitting from the acceleration of all the trends that are reimagining retail into what they have always wanted it to be.
What else can we expect in the near term? Wellness will make the leap from luxury to must-have necessity, according to Mindy Grossman, CEO of WW. The pandemic has prompted consumers to reflect not just on how they live and work, she says, but also what they value and what they want for their lives. Consumers, she added, have renewed their focus health and well-being and will reward trusted brands that marry technology with meaning to help them live better, more connected lives.
Meanwhile, the pandemic-fueled eat-at-home trend will create a permanent headwind for restaurants and a tailwind for grocers, says Rachel Elias Wein, founder and CEO of WeinPlus. The money consumers save by not dining out will sustain increased discretionary stay-at-home spending through the second quarter, shifting to travel and entertainment in the third quarter, she says.