The Top Retail Trends in 2021

The retail industry is rethinking every detail of the shopping experience, redefining not only how we shop and sell, but the incredible advantages local, independent retailers have right now. The boutique on your town’s main drag, the shoppable post that appears in your Instagram feed, and the marketing email sending you to an online store may all come from the same retailer. And that retailer is fundamentally different than they were a year ago.

The rise of the local, independent shop is the future of the retail industry.

To help retailers identify and lean into those strengths and strategies, Square teamed up with Wakefield Research and surveyed 1,000 consumers and 500 retail owners and managers about the retail industry challenges and trends that capture where they’re headed in 2021. What we found was eye-opening — the who, what, where, and why behind our shopping experience is going through a metamorphosis, revealing a big opportunity for local retailers to make a name for themselves and beat larger competitors.

We analyzed the survey results, insights from Square retail experts, and interviews with creative retailers leading the charge to identify the top retail trends for local businesses to explore this year. All data cited below comes from the survey results. For a more in-depth look at these 2021 retail industry trends, download the full report.

1. Retailers are taking on larger players by moving online

Independent retailers can connect with customers locally, and they can also have exponential reach by selling online in addition to maintaining their local presence. Today, shoppers make 43% of their monthly retail purchases online, and retailers are meeting those needs, with 88% now selling online.

As many retailers are changing their business models, going online increases the odds of success. In fact, among retailers selling online, 58% of their revenue comes from online sales. Moving to the first new channel also underscores the importance of using digital tools to help retailers continue to innovate. “That is the tipping point where you really need to run the operations of your business digitally,” says David Rusenko, Head of eCommerce at Square.

2. Blending online and in-store shopping is creating more meaningful experiences

Despite the mass move to eCommerce, over nine in 10 consumers still crave the thrill of shopping inside a physical store. Of those shoppers, nearly half say they miss browsing and getting out of the house, while two in five say they miss getting the item they bought instantly.

Even though retailers are digitizing their operations, it’s not an all or nothing situation. “We’re seeing that online experiences are less of a replacement for in-person interactions, but more of a complement to them,” says Megan Karande, Product Marketing Manager for Square for Retail. Customers still want to experience the joy of walking into a store and finding the exact item they want on the shelf, or completely serendipitously.

Local retailers have a clear advantage here and can engage customers at every step of the in-store experience while also connecting it to their online presence. Whether it’s revamping the in-store and curbside pickup experience or rethinking the store layout, the physical store isn’t going away, and in-store engagement strategies will only become more valuable this year.

3. Same-day delivery can give local retailers an edge over big-box stores

Nearly three out of four shoppers prefer delivery over pickup when shopping online. However, only 37% of retailers are offering same-day delivery. While shipping delays and supply chain issues are more common now, local businesses have an opportunity to get products out faster than big eCommerce players by offering same-day delivery.

Local retailers are closer to customers and they can set up the necessary systems to get products to customers faster, leading to more sales. “What often happens is that when you start to offer something like same-day delivery, it encourages larger basket sizes,” says Rusenko.

4. Social selling and eCommerce go hand in hand, and it’s giving local retailers a clear advantage

Local retailers have a more authentic understanding and appreciation for their communities and can therefore connect with local customers better than national competitors. Whether it’s through a fully shoppable store or flash sales, social selling is made possible by eCommerce tools, helping local retailers reach more customers at a time when people are even more glued to their devices.

And selling on social media is working. Shoppers who buy items online purchased an average of eight products from social media sites every month. And 43% of retailers who sell on social say half or more of their revenue comes from social media sales.

If you’re interested in trying out social selling, see how Square can help you quickly get started, using the products you already rely on.

5. Virtual experiences are bridging the gap between the online and offline parts of a store

As customers get more comfortable buying through social media, it also opens up a whole new way to interact through those platforms. Enter, the rise of virtual experiences. Over one in three retailers are going to invest in livestream shopping this year, while 35% are also going to implement virtual reality shopping.

These investments can lead to richer experiences for customers and more informed purchase decisions. And they’re more accessible than you might think.

How are retailers engaging customers virtually? One way is through livesteaming, which is when products are shared with customers over live video. It can be as simple as using an iPad to show customers what’s in store through a virtual shopping appointment, or by using Instagram Stories to showcase the new stock that just arrived.

Virtual reality is another strategy retailers are using to help customers experience products before adding them to their carts. As consumers now need more options to safely try on and try out items before buying, VR tech can be an effective way to improve the overall try-before-you-buy experience.

6. The borders between industries are blurring

The pandemic not only sparked business pivots, but fast-tracked the industry mashups that were already taking place. For instance, some restaurants are selling branded merchandise, and some retailers are offering digital services. And nearly three out of five shoppers say they’re likely to buy items from retailers and restaurants selling items that are different from what they typically sell.

“We’re seeing that the defined, straight vertical lines of your retail business versus your restaurant versus your services business are all blurring,” says Rusenko. “You’re seeing restaurants selling groceries (which are a typical retail offering) or retail businesses selling services like online cooking classes or Zoom calls and so on.”

7. Retailers are stepping up to the plate with community initiatives

Communities breathe life into local businesses, and both customers and owners recognize that harmony.

Retailers are deepening their connections to the areas they call home through a variety of ways. Seventy-seven percent of retailers are planning on participating in more community initiatives this year, with around one in three retailers saying they’re going to partner with local businesses, provide supplies for local events, and support minority-owned businesses.

8. Real-time views into store inventory is opening up new possibilities

From selling on Instagram to launching an online store, retailers are experimenting with multiple ways of meeting the evolving needs of customers. This new omnichannel landscape is thrilling, and retailers are realizing that having a handle on inventory is the only way they can continue to sell across different channels.

Over half of retailers say inventory management is harder because of the pandemic. Not only have consumer needs changed, but supply chain issues are slowing down the ordering process, making it harder to pinpoint the exact amount of inventory you need and when, and then passing that information along to customers.

To combat the increased complexity, 74% of retailers are planning on investing in real-time inventory management software to get more precise about their stock. In fact, over one in three retailers interested in real-time inventory software are already using it in their businesses. This is a key moment for retailers to invest in inventory software or upgrade what they currently use to meet the changing needs of business.


Local retailers are tapping into the qualities that make them unique, reworking them, and using them to their advantage as consumer needs have flipped. The future of retail lies in the power of local businesses.

To incorporate these retail industry trends into your business, it all starts with digitizing your operations and then trying out new ways of selling. When you find what fits, you can give customers exactly what they need while giving you the room to try new things. And when you get to that space where you can pull the levers that work for your store, your future is wide open.