Digital Transformation In Retail: What Trends To Follow In 2021

2020 was the year of emergency response for the retail industry. In the midst of the health crisis, the restriction orders, the rapid changes in consumer behaviors, businesses have to adopt innovations to keep their business going. 

It has been one year since the outburst. The global economy slowly recovers. Plus, the recent positive activity related to vaccines has fueled economic recovery and resilience even more. Also, as society adapts to new normal, new consumers appear and consumer spending across all categories increased.

Reflecting on last year’s chaos and emerging technological trends, retailers can now make informed decisions about which retail software solutions to adopt, so they can commit to more solid digital transformation strategies in the future.

How did COVID19 affect the retail industry?

The pandemic has surely changed the way we work and behave. Consumer sentiment, behavior, and needs are also transforming. In order to successfully navigate through this year having a better understanding of the retail industry’s panorama is necessary. Here are the 5 consumers key trends expected to reshape the industry this year.

Health issues drive consumer’s activities

Because the coronavirus is said to live and spread faster during the cold weather, winter has soared the number of COVID-19 infections and caused anxiety despite the positive news about the vaccine. As a result, by 2021, consumers will have higher safety demands related to their in-store shopping experience. 

New consumers behaviors will stay around even after the pandemic

In recent years, many brick-and-mortar retailers were struggling due to the emerging of eCommerce. Retailers that cannot combine both online and offline shopping options for customers are more likely to struggle, especially in developed countries like the USA, Australia, Japan, Korea, etc. Customers are enjoying a variety of fun and time-saving shopping, payment, and shipping options. So, even when the pandemic subsides, consumers of all generations will continue preferring online retail. 

Shoppers want to try new things

Since the onset of the pandemic, the vast majority of consumers have embarked on new buying behaviors and there is no intention to stop in the near future. However, they are also less willing to stick with one brand if it doesn’t meet their needs. They are more likely to switch retailers without thinking.

Mobiles stand out as the prominent devices used for online shopping

According to Episerver, smartphones are the number one option when it comes to online shopping for Gen Z, Millennials, and Gen X (except for Baby boomers).

Smartphone-based online sales are expected to surpass desktop sales as more and more consumers appreciate the convenience and enjoyment of e-Commerce. Mobile payments will also increase due to ease of use in offline retail.

Value for money is still a major purchasing driver

Economic factors in the main foundation of any purchasing decision. Of course, because people can’t buy what they can’t afford. This is especially true in the context of global economic uncertainty. Other factors like convenience, product availability, as well as customer service, also are important considerations.

The 3 paths to digital transformation will be realized in 2021

Mobile apps

Retail mobile apps are not the latest news, but since the onset of the pandemic, m-commerce (short for mobile commerce) has grown significantly. So far, there is no sign of losing momentum. Therefore, mobile commerce development is essential, but how can brands attract consumers? The answer lies in modern technologies.


Let’s have a look at some of the emerging technologies being used:

  • Augmented reality

The significant downside of e-commerce is that we have to make the purchasing decision and be satisfied with the shopping process. But recently, most brands have little incentives to offer. Since 2020, as digital customer experience has become critical to the survival of commerce, many companies have turned to augmented reality - the best technology that can blow lives into the online shopping experience. 

AR can be found in mass-market and high-end fashion brand's mobile apps, from jewelry and beauty retailers to household appliances like electronic devices. The technology allows customers to try on virtual clothing, shoes, makeup, nail polish, or preview what the room interior will look like. 

AR connects real-life and in-store shopping experiences while making the process of discovering and evaluating products even more exciting. Shopify found out that this factor has increased the conversion rates by 94 percent.

  • Shopping using voice

Besides AR, another emerging trend that has recently taken place in m-commerce is voice-enabled shopping.

As the world entered a downturn, all of us have to follow the stay-at-home order, consumers have learned that they no longer need to schedule their shopping time, they could make the purchase anytime they want. The voice assistant takes shopping to a whole new level: it allows the consumers to shop while working, or doing house chores, or watching TV.

As a result, the market share of purchases via voice-assisted in 2020 increased by 45 percent compared to the previous year. PYMNTS and Visa collaborated and found out that 14 percent of the buyers make the purchase decision while doing the dishes, 12 percent while watching TV, and 11 percent while they are cooking. 

Voice shopping provides a viable growth path for retail brands’ mobile apps as awareness of the speed and convenience of voice commerce increases.

The French supermarket chain Carrefour is the pioneer in this area. In the summer of 2020, the company launched a voice-based grocery shopping service developed in partnership with Google. The service is compatible with mobile phones and smart speakers, allowing customers to search for items in the Carrefour online store and add them to a cart, pay for orders, and schedule delivery via voice commands.

  • Traditional retail applications

In 2020, shoppers have been paying attention to avoid malls and supermarkets. They chose to visit their favorite offline businesses' mobile apps instead. During the lockdown months, there is significant growth in app downloads and purchases, for example, grocery delivery apps—Instacart saw an increase of 650% in Mar-Apr, 2020 in the US market. This proves that customers are willing to remain loyal to their favorite brands as long as the brands meet their initial expectations.

Along with in-app ordering and payment, home delivery scheduling and contactless pickup become essential features of these traditional retail apps. To provide a secure experience for in-store shoppers, retailers must equip their apps with zero-touch options, like scan-pay-and-go, contactless self-service, loyalty programs, etc.

As a result, in times of uncertainty for traditional retailers, mobile apps have quickly become a way to retool operations and respond to increasing customer demands. 

Social shopping 

Brands used to view social media as an effective way to market their brands and reach their target audience via personalized product promotions. In fact, social media channels are still widely used as one of the important mediums for advertising one brand. However, when customers do decide to make a purchase, the purchase tends to be made outside of the retailer’s social media account, mostly on the brand’s website or in an offline store.

But things are changing. Consumers turn to online shopping and start spending more time on social media due to the current crisis. This creates an opportunity for brands to use social media channels to step up their game: promoting their brands and sell their products. The year 2020 has opened up to social shopping development as the biggest social media like Facebook and Instagram have seized the opportunity without any delay, allowing customers to shop from a business’ Instagram profile or through Feed and Stories.

Social shopping is extending due to the emergence of social mobile devices. Via community engagement, social media commerce instantly struck a chord with the younger generation who feel isolated and craving for a new and exciting shopping experience. As for retailers who are facing financial challenges and uncertainty, they can benefit from social shopping due to easier target audience outreach and real support, leading to higher conversion rates.

But don’t classify this sales channel as “something trendy”. Due to the ease of use and appeal to the young generation who are digital natives, social shopping will be a popular and dominant sales channel in the next 5 years. According to Insider Intelligence's Social Commerce 2021 report, social commerce will be a key source of eCommerce growth in the US. Hence, 2021 is the perfect time for any brands that want to stay ahead of their social commerce.

Today, there are many selling opportunities on social media for both big brands and small and midsize business retailers. 

In the early of the pandemic, Facebook Shops is an initiative to support SMB retailers, allowing them to easily set up online stores on Facebook, IG, and sell their products. It can be done via pots, stories, or live streams. Other low-effort and easy-to-use selling platforms are also been used are Pinterest, and recently, Tiktok. These social media apps have partnered up with eCommerce platforms like Shopify to incorporate digital commerce experiences.

Fraud prevention

The rise in fraud is seen as a major limitation to the explosive growth of e-commerce. With the proliferation of digital transactions, the emergence of new payment and delivery methods, as well as the fact that customers often reasonably bypass new account protections, the online retail environment has always been the target of cyberattacks.

As if the situation is not bad enough, scammers increasingly rely on sophisticated scripts that mimic human behavior instead of launching large-scale attacks. Some of the popular frauds are account takeover, chargeback, triangular fraud, etc. 

According to LexisNexis2020 True Cost of Fraud, the average number of successful fraud attempts rose 5 percent, from 43 to 48 percent since 2019.



2020 was the major turning point for the retail industry, rapidly promoting industrial innovation. But when there is no need for emergency recovery and rapid rollouts, businesses can take a step back to assess changes in customer behavior and recent advances in retail technology, and create more permanent digital transformation strategies.

An investment in custom mobile app development, or augmented reality/AI/ML, or even extra cybersecurity solutions are something you should consider in your digital transformation strategy plans. 

TP&P Technology is Vietnam's top software development company. Shall you need any custom software development outsourcing requirements, contact our team of experts to get to know our services and how we can help you.