Create Tomorrow: The WGSN Podcast
The world is changing at a faster pace than ever before. As we begin the path to recovery after worldwide disruption, this podcast explores how the design industry can adapt to changing expectations and create a better future for your businesses and consumers.
I’m your host, Peter Marian, and you’re listening to Create Tomorrow, the WGSN podcast.
The Retail Landscape
Retail again is in a state of flux. The pandemic has led to huge shifts in consumer behavior in 2020, and this is set to continue into 2021.
For instance, in the US alone, 11,000 stores closed, and 40 major retailers went bankrupt last year. Online spending also reached new heights, accounting for 27.3% of global retail sales, growing by a third over the course of the year.
While vaccines are being rolled out and there is hope on the horizon, recovery will come in fits and starts. The so-called K-shaped recovery means that the consumer landscape remains complicated, as many people are experiencing a reduction in their willingness and capacity to spend. As this seismic shift continues, retailers need to adapt for a future where digitally facilitated shopping trips are the norm.
Pathways to product discovery are completely disrupted, and the role of the store will change while serving an increasingly impatient and demanding consumer.
Today, I’m joined by some colleagues to discuss the future of the retail sector and how businesses will need to adapt.
Introductions
Sydney Morgan, Pro Head of Retail and Buying on WGSN Fashion
Hi Sydney.
Hi Peter.
How are you?
I’m good, thanks. How are you?
Doing well.
Laura Sansa, Senior Strategist on WGSN Insight
Hi Laura.
Hi Peter. I’m great. And you?
I’m good, thank you.
Athena Chen, Senior Strategist on WGSN Insight
Hi Athena.
Hi Peter. I’m good. I’m currently based in Shanghai, and we’re having rainy weather today, but hopefully it’ll pick up throughout the week.
Fingers crossed.
Expectations for 2021
Peter: To kick off, what do we expect for the retail sector in 2021? Sydney, do you want to start?
Sydney: Absolutely. I think you know, clothes for clothing’s sake is something we’re going to see the end of. Going back into shops, many of the old formats do feel a bit stale. Retailers hadn’t really taken the opportunity to pivot and shake up the floor sets to make them more relevant to what the customer was going through.
So, going into 2021, we’ll see them finally realizing that and ensuring that the product categories they put out front are highly relevant for current needs and wants. Expect more emphasis on lifestyle merchandising—bringing home goods into the mix, doing a high-low mix, especially in apparel retail, because they realize that isn’t always the main priority.
We’re seeing brands reach into home goods, do exciting collaborations, partner with direct-to-consumer and digitally native brands. The goal is to capture consumer attention with more interesting, multi-channel offers.
You mentioned that consumers’ lifestyles and perspectives have changed significantly over the past year. Laura, you do one of the most insightful pieces of research—the Shoer Forecast—which just went live. Could you speak to what consumers are feeling and expecting in 2021?
Laura: Definitely. The events of 2020 have left a big impression on consumer behavior. One key shift is expectations around fulfillment—speed of delivery, ease of returns, transparency about delivery status. Consumers want to know where their parcel is, when it will arrive, and they expect quick service.
There’s also a shift toward affordability, with consumers demanding more sustainability in packaging and delivery—how green their online orders are. Interestingly, consumers are quite contradictory: in-store, they demand safety and hygiene, want to feel secure, but also want to shop quickly and have products in stock. Online, speed and streamlining are critical, but they also want an experience—something to discover and be entertained by, recreating the in-store discovery experience online.
We see different shopper profiles—some driven by value, others by values like supporting local or minority-owned businesses. Overall, the landscape is varied, with pockets of growth across different segments.
Peter: Absolutely. We’ll explore these shopper groups further throughout the episode. Athena, let’s talk about Asia. You’ve experienced the pandemic’s impact there—things are almost back to normal. What does that mean for consumption?
Athena: In Asia, digital adoption was already high before the pandemic, thanks to robust digital infrastructure—WeChat Pay in China, Line Pay in Korea and Japan, linked closely to social media. Even as restrictions ease, consumers remain glued to online habits formed during the pandemic—seeking entertainment, connecting with brands, and shopping online.
Brands need to enhance their digital efforts to maintain relationships. Data-driven insights help understand consumer preferences—recommendations from social groups are influential. Social commerce is booming, especially with live streaming and short videos, which are transforming online merchandising.
Product discovery online is shifting from static images to dynamic video content. Retailers should leverage video to engage consumers. Laura, you’ve written about this shift from physical browsing to online exploration—through live streaming and digital experiences.
The Store of the Future
Peter: And what about physical retail, Sydney? You’ve been on the shop floor. Has there been much change?
Sydney: Not as much as expected. Since September, we’ve discussed with our London team—London responded faster than New York. In-store, the value sector remains busy; stores are bustling, and foot traffic hasn’t declined much.
In luxury and premium stores, foot traffic has decreased significantly. But the key change is in the discovery experience. Instead of traditional experiential retail, 2021 will see a shift toward discovery—less about touch and feel, more about engaging storytelling and visual merchandising.
For example, Showfields in New York, opened in 2018, offers a maze-like experience with heavy storytelling, exposing customers to new brands—something that can’t be replicated online. Such experiential discovery will become more common.
Regarding store features, the slide in the store (if still present) has become less prominent and more sanitized—behind a “magic door” for safety.
Peter: You mentioned the impact of certain neighborhoods in New York being empty, with many stores boarded up during protests and the pandemic. Can you elaborate?
Sydney: Yes, it varies neighborhood by neighborhood. Broadway in SoHo, a bustling shopping area, has many closures. But value-focused stores—kids’ clothing, discount retailers—are still thriving, feeling very normal.
High-end stores, however, have seen less foot traffic. During protests and the pandemic, many shops were boarded up, creating a post-apocalyptic feel that affected shopper mood.
Affordability and Shopping Shifts
You also highlighted the shift toward affordability. A report showed 44% of consumers across markets like China, US, UK, France, and Germany experienced income declines during the pandemic. Yet, some are doing better financially due to reduced travel and dining expenses. Still, many are cautious about future spending.
Laura: Exactly. People are more cautious, operating with a frugal mindset—prioritizing value for money, durability, and quality. They’re seeking cheaper alternatives or dupes—products that offer good value. Apps that compare prices or suggest alternatives are gaining popularity, especially among younger consumers.
In China, this trend is evident with major shopping festivals like Singles’ Day, now happening monthly, encouraging delayed purchases and frequent shopping events. Southeast Asia follows suit, with Alibaba and other platforms leading this wave.
In the West, consumers are delaying payments rather than purchases—using services like Afterpay, PayPal, and installment plans. This allows them to buy now and pay later, but raises concerns about credit and debt, especially among young users. Retailers should educate consumers about responsible use of these services.
Return rates are also high—over $70 billion worth of online returns in the US during the holidays—highlighting the importance of return policies in the shopping experience.
Shopper Profiles: Mission-Based and Precise
Peter: Moving deeper into consumer profiles, Laura, can you tell us about the mission-based shopper?
Laura: Certainly. This shopper shops with purpose, seeking faster, streamlined experiences. They often research online beforehand, know what they want, and check stock availability via inventory apps or store websites.
In stores, they want quick, easy access—no long queues or confusing layouts. Stores like Walmart are redesigning layouts inspired by airports, with clear signage and app integration to guide shoppers efficiently.
Even luxury and auction houses are adapting—allowing instant purchase options for high-end items, bypassing traditional bidding or waiting for auctions. Speed and convenience are now expected across all categories.
Athena: In Asia, this precision shopping is even more pronounced. Platforms like Alibaba and JD.com use AI to forecast demand regionally, enabling brands to produce customized products via smart factories. Offline, stores are becoming social media-worthy spaces, designed for content creation and engagement—especially after the confinement of 2020.
Ethics and Sustainability
Peter: Finally, how will ethics and sustainability influence spending in 2021? Sydney, you’ve researched this through your barometer data.
Sydney: Yes. Our data shows rising consumer concern for inclusivity, community, ethical labor, accountability, transparency, and environmental issues. In the US and UK, inclusivity and community are top concerns, with ethical labor gaining importance—highlighted by the pandemic’s exposure of garment industry vulnerabilities.
Environmental concerns are also rising, though the US lags behind the UK. Consumers want sustainable products at accessible prices—an increasing challenge for brands.
Peter: And how can large retailers demonstrate community focus?
Sydney: Collaboration is key. Partnering with local artisans, supporting slow fashion, and highlighting craftsmanship show commitment. For example, American Eagle’s boutique in the Hamptons focused on slow fashion brands, emphasizing quality and artisan support.
Athena: In Asia, brands need to work closely with e-commerce platforms and leverage AI to forecast demand precisely. Smart factories enable on-demand, customized production. Offline, stores are evolving into social spaces for content creation, driven by social media obsession.
Short-term and Long-term Strategies
Peter: What strategies should businesses adopt short-term and long-term? Athena?
Athena: Short-term: Focus on mobile—adopt omnichannel formats, use live streaming, mini-programs, and personalized online experiences.
Long-term: Partner with data-driven platforms, utilize AI and analytics to understand consumer demands in real time, and create smarter, more personalized retail environments.
Sydney: Short-term: Store closures are inevitable; this is an opportunity to right-size and optimize physical presence. It’s necessary for a healthier future.
Long-term: Expand into new categories, innovate with new brands, and diversify beyond traditional offerings to stay relevant.
Laura: Short-term: Offer small moments of joy—giveaways, fun discovery tools, experiential e-commerce—to lift consumer spirits.
Long-term: Rethink the store’s role—design spaces that boost confidence, foster engagement, and adapt to new behaviors and preferences.
Closing Remarks
Thanks for listening to the WGSN podcast. If you’ve enjoyed this episode, please subscribe on all major platforms and leave a rating or review—it helps us spread the word.
For more insights, visit WGSN to access detailed research and analysis. Subscribers can find a report summarizing key points from this episode.
Thanks to our guests and show producers Roland Bodham and Beth Ryder. Stay well and healthy. We’ll see you next time.