Table of Contents
Executive Summary
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- Top takeaways
- Market overview
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- Figure 1: Total US retail sales and fan chart forecast, including ecommerce, at current prices, 2015-25
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- Figure 2: Short-, medium- and long-term impact of COVID-19 on retail, March 2021
- Opportunities and Challenges
- Follow the consumers’ lead and use a phased approach to the return of physical retail
- Evolve the role of the store
- Reimagine how physical and digital retail work together through tech
- Attract consumers to stores through value focus
The Market – Key Takeaways
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- Retail industry, and stores specifically, start the uphill battle toward recovery
- Volatile economy causes consumers to spend less and try to save more
- Population trends serve as leading indicators for retail’s future
- Brick and mortar retailers must plan for the future in phases
Impact of COVID-19 on Retail
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- Figure 3: Short-, medium- and long-term impact of COVID-19 on retail, March 2021
- Lockdown
- Reemergence
- Recovery
- Learnings from the last recession
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Market Size and Forecast
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- The total picture shows slow recovery ahead
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- Figure 4: Total US retail sales and fan chart forecast, including ecommerce, at current prices, 2015-25
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- Figure 5: Total US retail sales and forecast, including ecommerce, at current prices, 2015-25
- The “eCommerce effect” helps total retail, but impedes store growth
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- Figure 6: Total US retail ecommerce sales and fan chart forecast, at current prices, 2015-25
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- Figure 7: Total US retail ecommerce sales and forecast, at current prices, 2015-25
- Maintaining a holistic approach to retailing key for industry’s future revival
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- Figure 8: Total US retail sales (excluding ecommerce) and fan chart forecast, at current prices, 2015-25
Market Factors
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- Economic factors
- Majority of adults are just making ends meet, further straining nonessential categories
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- Figure 9: Financial health, by household income, January 28-February 10, 2021
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- Figure 10: Disposable Personal Income change from previous period, 2020
- Consumer confidence and unemployment
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- Figure 11: Consumer confidence and unemployment, 2020-January 2021
- Consumer Price Index
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- Figure 12: Consumer Price Index change from previous period, past 12 months, 2020-January 2021
- Population dynamics
- Youth will propel multichannel shopping
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- Figure 13: Population by generation, 2016-26
- Youngest generations are the most diverse
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- Figure 14: Distribution of generations by race, 2021
- Figure 15: Distribution of generations by Hispanic origin, 2021
In-store Retail Opportunities
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- Look toward experiences that are channel-agnostic
- Transform physical spaces through digital advancements
- Create alliances and partnerships to offer more services, convenience
- Bring value to the store
Companies and Brands – Key Takeaways
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- When one door closes, another opens
- “Store of the future” concepts emerge
- Stores aren’t just for selling “stuff”
- Customer service from a distance
Competitive Strategies
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- Closing and opening more stores
- Reenvisioning store formats
- Capturing local community essence in-store
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- Figure 16: Nike Unite store concept
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- Figure 17: UGG flagship store, New York City
- Figure 18: 7-Eleven Evolution store, dallas
- Shops-in-shops
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- Figure 19: Prototypes for Target Ulta Beauty and Apple mini-stores
- Pop-ups, small stores and showrooms
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- Figure 20: Nordstrom NYC Black Founders pop-up
- Identifying priorities for omnichannel investments
- Pivoting to add services
- Transforming stores into fulfillment centers and digital hubs
- Improving inventory management
- Maintaining customer connections, even if they are “socially distant”
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- Figure 21: Lululemon email from Lincoln Park location in Chicago
The Consumer – Key Takeaways
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- Multichannel shopping slows down amid pandemic; will pick up again
- Operations matter in the COVID-19 era
- Back to the basics
- Reimagining what a store experience means…again
- Transforming physical places with digital technologies
Shopping Method by Category
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- Consumers are prioritizing essential items
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- Figure 22: Products shopped for, March 2020 and December 2020
- Reliance on digital leads to temporary declines in multichannel shopping
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- Figure 23: Multichannel shopping – by item, before and amid COVID-19, December 2020
- Online gains achieved across categories
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- Figure 24: Where purchases occurred – by channel, by item, before and amid COVID-19, December 2020
- Store for buying, online for searching is the norm, but exceptions exist
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- Figure 25: Method of shopping, select categories, December 2020
Shopping Shifts due to COVID-19: Now and Later
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- What’s happening now
- Consumers are favoring the virtual store over the physical store
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- Figure 26: In-store shopping incidence since COVID-19, by generation, December 2020
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- Figure 27: Percent of total online shopping, December 2020
- What to expect in the future
- A new normal for the in-store shopping experience
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- Figure 28: In-store shopping expectations once COVID-19 is no longer a threat, December 2020
- Safety and cleanliness is universally important, especially to women and seniors
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- Figure 29: Select in-store shopping expectations once COVID-19 is no longer a threat, by gender, December 2020
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- Figure 30: In-store shopping expectations once COVID-19 is no longer a threat, by generation, December 2020
In-store Shopping Drivers: Now and Later
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- What’s happening now
- Things are looking up
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- Figure 31: Comfort level with various activities amid COVID-19, January 28-February 10, 2021
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- Figure 32: Important factors for shopping in-store during COVID-19, December 2020
- Millennials and parents gravitate toward appointment-based shopping
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- Figure 33: Important factors for shopping in-store during COVID-19, by generation and parental status, December 2020
- What to expect in the future
- The basics will still apply
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- Figure 34: Factors that drive channel choice, December 2020
- Men and women are driven to shop in-store for different reasons
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- Figure 35: Factors that drive channel choice – Index versus all, by generation, December 2020
- Younger shoppers like the hands-on and in real life aspects of shopping in stores
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- Figure 36: Factors that drive channel choice – Index versus all, by generation, December 2020
Favored Types of In-Store Experiences
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- Consumers are craving community connections
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- Figure 37: Favored types of in-store experiences, December 2020
- Generation Z and Millennials expect more than function from a store experience
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- Figure 38: Favored types of in-store experiences, by generation, December 2020
Awareness and Usage of Emerging Technologies
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- Omnichannel evolution means continued changes for the store
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- Figure 39: Awareness and usage of emerging technologies, December 2020
- Younger generations are leading adopters and want it all
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- Figure 40: Usage and interest of emerging technologies – index versus all, by generation, December 2020
- A closer look at select technologies
- Cashierless/contactless tech
- Augmented and virtual reality
- Digital screens
- Fit technology
- Wayfinding tech
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Forecast methodology
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 41: Total US retail sales and forecast, including ecommerce, at inflation-adjusted prices, 2015-25
- Figure 42: Total US retail ecommerce sales and forecast, at inflation-adjusted prices, 2015-25
- Source: US Census Bureau, Monthly Retail Trade Surveys/Mintel
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- Figure 44: eCommerce share of total US retail sales, 2015-25
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Appendix – The Consumer
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- Figure 45: Select important factors for shopping in-store during COVID-19, by generation, December 2020
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