• The pandemic changed how Americans shop, and many of those changes are likely to stick around in 2021.
• Automation technology and social media trends will continue to play a part in how the retail industry evolves.
• More retailers will offer personal shopping services, and social media influencers will remain relevant.
• This article is for small business owners who want to know what trends retail experts expect to see in 2021.

As we start a new year, retailers – and entrepreneurs who want to open retail stores – are wondering how they can best position their small businesses for a prosperous year. While it’s impossible to perfectly predict the future, here are the retail trends that the industry experts we spoke with expect to see in 2021.

Tech will continue to change the retail industry

The widespread shutdowns of public spaces across the country – including retail locations – left owners of nonessential retail establishments wondering how they could keep the lights on. Though many were able to secure government funding, adapt to new safety guidelines, and take their stores online, many others closed. As a result, the way people shop may never be the same again.

Online shopping is more important than ever

Shopping for goods and services online is nothing new, but the pandemic accelerated the rate at which business owners opened e-commerce shops and consumers shopped online. According to a survey conducted earlier this year by the United Nations Conference on Trade and Development (UNCTAD) and the NetComm Suisse e-Commerce Association, online sales have “increased by 6 to 10 percentage points across most product categories.”

“The COVID-19 pandemic has accelerated the shift towards a more digital world,” said UNCTAD Secretary-General Mukhisa Kituyi. “The changes we make now will have lasting effects as the world economy begins to recover.”

While there was growth in many sectors, the researchers warned that spending per shopper “dropped markedly,” as shoppers were “focusing more on essential products.” The study suggests that companies that can operate online, regardless of sector, will be able to thrive in 2021.

“Companies that put e-commerce at the heart of their business strategies are prepared for the post-COVID-19 era,” said Yomi Kastro, founder and CEO of Inveon. “There is an enormous opportunity for industries that are still more used to physical shopping, such as fast-moving consumer goods and pharmaceuticals.”

As e-commerce grows, brick-and-mortar stores will be restructured

Since online shopping will continue to be a driving factor, businesses of all sizes could be forced to reconsider how they set up their brick-and-mortar locations. In previous years, the idea for most successful businesses was to start with a single location before branching out to surrounding areas.

Melissa Gonzalez, a retail strategist and the CEO of The Lionesque Group, believes brands and retailers will “take a more holistic look” at their physical stores this year. That focus, she says, will create a “more diversified approach to how they show up nationally and globally.”

“Capital allocation will have a tiered process where flagship destinations will exist in locales where there is evidence that a physical presence is justified or critical 12 months a year,” Gonzalez said. “Flagship locations will be complemented with smaller-format, specialty locations anchored around a specific purpose or localized effort. Partnering with department stores will also continue to be reimagined as they restructure and reposition as collaborative marketplaces, and there will be a deeper dedication to pop-in-shop retail.”

Small businesses will need to consider tech upgrades

Though some Americans were able to work from home in 2020, that wasn’t an option for retailers that rely on foot traffic. As the vaccine distribution begins, Mike Morini, CEO of WorkForce Software, thinks companies will need to consider emerging technologies to help them manage onsite staff.

“An hourly workforce has unique pay rules, labor regulations, compliance obligations, and scheduling needs, [while] the pandemic has added new safety requirements, unpredictable staff availability, and changing regulations, which are driving businesses to upgrade their antiquated tools,” he said. “Companies need technology that can support their growing requirements and evolve with their business. The pandemic has increased the adoption of new digital technologies, which can save organizations money by increasing efficiencies and improve the experience of their employees.”

Key takeaway: Consumers are increasingly comfortable shopping online, which means retailers will need to have an e-commerce presence to see success in 2021.

In-person shopping is still on hold

Given the highly contagious nature of COVID-19, public health experts around the world discouraged in-person shopping in 2020. As the vaccine rolls out, people will begin returning to public retail spaces. Until then, in-person shopping will remain largely on hold, as consumers favor buying items online and picking them up at the store, often curbside.

Personal shopping services will increase

One way that retail locations have dealt with the decline in foot traffic has been through the practice of personal shopping, which has store employees shopping for the customer. Whether that means sending the business a list of items the customer needs or shopping with the employee using basic mobile video technology, this method of shopping has been embraced by many big-name brands.

Deb Gabor, CEO of Sol Marketing and author of Irrational Loyalty: Building a Brand That Thrives in Turbulent Times, expects that small businesses will continue to offer this sort of service after the pandemic is taken care of.

“This was a trend we were starting to see pre-COVID, and the pandemic has accelerated the process of adoption,” she said. “Local and small retailers are especially well suited to these kinds of personalized experiences and are leading the charge in the category.”

Key takeaway: Retailers should consider offering personal shopping services to consumers who aren’t yet ready to shop in person or appreciate the convenience of shopping remotely.

Automation in pricing will continue to rise

An item’s price is usually determined by a number of factors, but in recent years, more and more companies have relied on automated technology to ensure their prices are properly set.

Omri Traub, CEO and founder of Popcart, expects automation to play an even bigger part in this arena going forward, pointing to “a new wave of companies” that provide such automation solutions as a service. Once implemented, he said, the tech will provide “low implementation costs and [reductions to] operating costs.”

“With continued shortages of workers within select domains, automation investments will continue to increase,” Traub said. “Examples for small business include online pricing automation to balance profitability and revenue growth, as well as inventory management systems to ensure the perfect amount of inventory is on hand.”

Key takeaway: More retail technologies are being automated, and they will be offered in the cloud, making them affordable to more businesses.

Marketing and customer engagement will see changes

How customers engaged with small retail stores had already begun to shift to an online, mobile-friendly model, and the pandemic accelerated it.

Social media will continue to introduce customers to brands

Social media is a major driver of the customer journey and online sales for many companies. As we head into 2021, experts expect that hashtags and meme culture will play as large a role as traditional advertising methods for successful small businesses and their younger consumers.

One way that will happen, Gabor said, is through “creative social commerce,” in which platforms like TikTok and Instagram fuel online shopping.

“Social shopping, such as shoppable TikTok and Instagram, picked up steam in 2020 and is likely to continue rampant growth in 2021 among savvy retailers,” she said. “More creative social programming, such as what NYC neighborhood boutique Caravan NYC is doing, is also popping up. Its new business model involves hosting an Instagram ‘variety show,’ complete with entertainment programming and brand/merchandise sponsors who sell their products via the program on the social platform, giving Upper East Side retailers a new audience and channel to promote their brands.”

Influencers will keep playing a big role

Love them or hate them, influencers will remain relevant for nearly every retail brand. With companies highlighting authentic voices, Gabor said, consumers will be able to look for leadership among those individuals.

“During a time when consumers prize honesty, sincerity, and truth from the brands they love, influencer programs must emphasize similar values,” she said. “In 2021, brands will continue to be mindful that their micro-influencer campaigns focus on influencers who authentically align with the values and beliefs of both their brands and their consumers to ensure that those influencer campaigns have a meaningful impact.”