• Retail Dive

9 retail trends to watch in 2021

By Daphne Howland , Ben Unglesbee .Cara Salpini , Kaarin Vembar ,Caroline Jansen , Maria Monteros

Published Jan. 12, 2021

The pandemic will continue to reshape the industry and accelerate trends from consumer preferences to industry norms and structures in the year ahead.

The pandemic's arrival in March 2020 meant that it didn't make Retail Dive's trends to watch last year, but it completely upended all expectations for the year.

The health crisis was closely followed by the whole industry throughout 2020, courtesy of the havoc it wreaked on retail operations. Stores were forced closed, employees were furloughed or laid off, rent was skipped, supply chains were strained.

Headed into 2021, retailers have survived the immediate triage period, but the pandemic is still very much present and will continue to shape the year ahead. Indeed, the ability of the crisis to cause more problems, or abate them, depending on how the world recovers will perhaps have the largest effect on the industry this year.

The pandemic is a thread weaving through almost every trend the industry faces in 2021, in some cases speeding up inevitable changes many years in the making and in others sparking unexpected developments. Whatever this year brings, the changes driven by the convergence of the pandemic and longstanding industry tailwinds will influence what retailers do and reshape the industry.

Here's what Retail Dive is tracking in 2021.

1. The pandemic will forever alter the brick-and-mortar landscape

The major blow to retailers that came from the pandemic's forced closure of stores last spring lessened somewhat throughout the year as stores reopened, but long-term changes to the retail landscape are inevitable.

Several retailers, whether through bankruptcy or not, sped up or expanded plans to close stores, especially at malls. Companies as diverse as Gap Inc., Macy's, Victoria's Secret and Nordstrom announced plans to close doors permanently, adding up to hundreds of empty locations, many of them mall anchors and specialty tenants or downtown flagships.

Strip centers fared better, and Macy's is among those switching to the format. Analysts also see some hope for neighborhood shopping districts as people continue to work from home and frequent their local shops, and Foot Locker and Nike are among those embracing the idea of community-oriented locations. But the pandemic, despite some help from a financial COVID relief package early in 2020 designed to help keep small businesses afloat, has been especially challenging for many mom and pops.

It's an open question whether downtown shopping corridors will recover, considering that working from home could remain an option for many workers even after the pandemic subsides. What's more certain is that yet more malls are destined to falter, even some at the high end, with the pandemic accelerating what would have been a five- or 10-year trend. The troubles have ushered in an unprecedented level of cooperation between landlords and their retail tenants, which could provide retailers with flexibility to serve customers in their ideal locations, wherever those may be.

2. The culling of weak retailers will continue apace

The COVID-19 pandemic had the effect of consolidating several years worth of e-commerce growth into a matter of months. It also likely had a similar effect on retail bankruptcies. Last year, J.C. Penney, Neiman Marcus, J. Crew — all retailers that might have slogged into 2021 or 2022 — filed for bankruptcy in an effort to restructure. Others such as Stein Mart and Lord & Taylor, which l