As the United States emerges from pandemic rules in the coming months, there will be changes, large and small, for retailers to consider, as they map their way forward.
Companies will be setting new policies regarding returning to offices, more schools will reopen for in-person learning, and consumers will start to travel, all of which have enormous implications for the retail industry, according to The NPD Group.
In a recent presentation to the Retail Industry Leaders Association (RILA), NPD Chief Retail Strategist Don Unser outlined the retail industry headwinds and tailwinds expected in the coming year. Here are three of the most critical trends affecting retailers in the coming months:
- Millions of new remote and hybrid-remote workers – Compared to 2019, there could be as many as 28 million new workers working from home in the United States this year. Unser estimates that 20 percent to 35 percent of the work force will work part-time or full-time at home when pandemic rules are lifted, which will have the greatest effect on consumer spending for technology, apparel, footwear, automotive, and foodservice.
- Kids returning to the classroom led to an early back-to-school bump – As more school districts headed back to the classroom, spending on traditional back-to-school items increased by tens of millions of dollars, which is unusual for this time of year. In early March unit sales of kids’ backpacks, apparel, and performance and leisure footwear surpassed 2019 levels. During the last three weeks, sales in these categories grew by triple-digits versus 2020 and by double-digits versus 2019, according to NPD retail tracking.
- Experience spending will shift some discretionary spending – While the trendline for foodservice and other experience-based categories was still down in the first two months of 2021 compared to the pre-pandemic period, it is now headed toward a slow recovery as more states’ economies reopen. Unser expects spending on experiences will come back strong.
Looking at geographic data during the pandemic, retail-store sales performance across the country declined 13 percent, year over year, but certain cities fell even harder. The top cities for tourism in the United States posted stagnant performance in brick-and-mortar store retail. In fact, between the week ending March 7, 2020 and the week ending February 13, 2021, in-store dollar sales fell 34 percent in San Francisco, 33 percent in New York, and 25 percent in Miami.
The sudden lack of tourism and closed retail stores were key factors in this decline
When looking toward the future of retail, the focus should be on repositioning rather than “recovery,” since consumer technology, small home appliances, and other categories, actually grew during the pandemic.
