The retail industry is now doing better than many retailers expected last year when stores, offices, and schools shut down across the country.
In fact, compared to last year, discretionary retail sales revenue in the U.S grew 17% from January 1 through May 8, 2021, according to The NPD Group.
Even more strikingly, retail sales increased 18% over 2019.
Growth in the U.S. economy continues to rise as vaccination rates increase and as more consumers, as well as businesses and schools, begin to map their post-pandemic paths forward.
A recent “Future of Style” event, hosted by The NPD group, explored the major trends affecting a number of global industries.
Experts from NPD focused on the key opportunities and challenges faced by retail companies and brands, as retailers and consumers begin to emerge from the global pandemic.
The group provided the following four overarching retail trends to watch in the coming months:
Experiential spending returns
With U.S. and global vaccination rates on the rise, consumers will once again start spending on travel, dining out, and other experiences.
This socialization shift will create more movement in products related to emerging needs.
As consumer behavior starts to bounce back, leaders in the retail industry are looking beyond what happened last year to determine the behaviors that will change, as well as those that could remain in force for months, or even years, into the future.
Marshal Cohen, chief retail industry advisor for NPD, commented: “Some experiential spending is already coming back strong, as consumers do more, dress up more, place more emphasis on appearance and health, and start to spend more on tangible products related to travel and other experiences.
“However, as this pent-up demand works itself out in the coming months, we can also expect those rising sales to throttle back a bit in apparel, footwear, and other categories.”
The continuing power of the pandemic “lifestyle pillars”
Purchasing related to home-based work, education, fitness, entertaining, and healthy home all ramped up mightily last year, and the continuation of these lifestyle pillars continues to propel retail growth upward.
Even so, these pandemic pillars will eventually start to moderate, as restrictions ease and consumers revive more of their pre-pandemic activities.
Retail’s cadence is shifting
Consumers used to plan their shopping carefully weeks or even months ahead of time, but that forward-looking focus shifted appreciably last year. Due to all the uncertainty surrounding the pandemic, along with the convenience of one- and two-day shipping, curbside pick-up, and other convenient options, the retail cadence became much more immediate.
“Consumers began to shop mainly for their immediate situations, rather than thinking about what they might need down the road or for the season ahead,” Cohen said.
“We can expect some of that behavior to continue, even as more stores reopen and consumers get comfortable shopping in-person again, and retailers will need to adjust their seasonal planning in order to win the purchase.”
Fast-forward for digital transformation
Over the past few years, a big story in retail was the steady digital transformation of many sectors of the retail market. However, after the pandemic hit, the size of e-commerce growth for some industries leapt forward by three years while still leaving plenty of room to grow.
Although beauty, fragrance, and apparel, still benefit more from in-store traffic, due to the need to see and try on products, housewares, sports equipment, and other retail categories will increasingly reap benefits from the consumer’s accelerated migration to shopping online.