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Jan 12, 20213 min read

Three key takeaways from 2020 that every retailer should know.

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by Klarna

The pandemic hit 2020 fast and hard, abruptly impacting the way we live, work and play. Within the retail industry, we witnessed rapid evolution not only in the way people shopped, but what they were shopping for and how they paid for it. Faced with a challenge unlike ever before, retailers were forced to pivot strategies quickly, adapting to meet a new set of consumer expectations and industry regulations.

As we look back at one of the most disruptive years yet, here are three lessons learned from 2020 meant to inspire and support you as you navigate 2021 and beyond.

Agility is key when responding to data.

Consumer attitudes and preferences are always in a state of flux, however, we’ve never seen spending behavior flipped on its head to the degree it was in the spring of 2020. Overnight, shoppers shifted from purchasing workwear and concert tickets to sweatsuits and houseplants. Pet food saw a 75% increase in spend in the Klarna app compared to previous months. Even consumer behavior within the luxury category was impacted, with shoppers turning to luxury products to foster a greater sense of comfort and wellness.

This whirlwind shift in consumer preferences and spending behavior illustrates how important it is that brands stay attuned to behavioral trends and insights, and have a structure in place that makes it possible for them to respond quickly. Data, when used properly, can support business growth, enabling brands to cater their shopping experiences to proven consumer wants and needs. Todays’ new normal requires that retail businesses not only remain attuned to these insights, but embrace agility in all areas of their business—from order fulfillment to merchandise planning and store formats. As we prepare for what’s to come in this unprecedented year ahead, brands that can swiftly address and adapt to disruptions to their status quo will come out on top.

No omnichannel, no dice.

In 2020 we saw the rapid adoption of digital shopping across all categories, with people shopping online more than ever before. In-store shopping also continued to play an important role in the consumer shopping journey: in a survey of over 40,000 Klarna shoppers leading up to the holidays, 64% said they planned to do last-minute shopping in physical retail stores.

While the trend towards omnichannel has been underway for years, the pandemic accelerated the importance of incorporating a multichannel retail strategy. The ability to provide a seamless end-to-end branded experience across all sales channels, from in-store to mobile, is now table stakes. Shoppers today expect a frictionless brand experience anytime, anywhere—nearly 6 out of 10 (59%) shoppers expect the same level of customer service from retailers both in-store and online. This means that retailers must evolve their offerings to create omnichannel experiences that cater to this “new normal,” from new, innovative in-store technologies like contactless payments to virtual reality (VR) and social shopping platforms.

Don’t forget about the fundamentals.

In a global survey of over 4,000 Klarna shoppers, we found that consumers across all demographics were unified on the fundamental aspects of retail that make for a stand-out experience. Good value for money was a top priority for shoppers, with two thirds (67%) suggesting it has become more important since the start of the pandemic, followed by quality and choice of products, and impeccable customer service.

While there are many uncertainties in today’s fast-changing retail world, we’d wager that these non-negotiables will only continue to grow in importance to shoppers in the months and years ahead. As retail businesses continue to evolve, remembering to prioritize these fundamentals will ensure that your brand resonates with the audience that matters most: your customers.

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