January 21/28, 2019: Volume 34, Issue 17
By Steven Feldman
If you go online and search for “retail trends in 2019,” you will find hundreds of trends and predictions. Since FCNews’ focus is on the retailer, and this second issue of 2019 coincides with Surfaces, the premier retailer event in our industry, I thought it would be timely to highlight nine trends that might be of interest to our readers.
- Facebook becomes a retailer. Amazon and Google may have cornered the market on explicit search, but Facebook knows what consumers implicitly want better than they know themselves. After all, consumers tell Facebook far more about themselves—by way of their social media activity—than they tell Amazon and Google. This dynamic is why the rise of social commerce is probably the most important trend that will impact retail over the next several years.
- Private label will grow online. Over the last several years, retailers have doubled down on private-label lines to differentiate in a new retail landscape where customers are inundated with an unprecedented number of places and ways to buy the same goods. Sales of private-label products are now three times higher than branded products, according to research firm CB Insights. Building up private-label brands is expected to continue, but if retailers are hoping to get the best bang for their buck, they’ll need to invest in the visibility of those brands online.
- Retail as a service to expand. Retailers are exploring options to create a more personalized experience for consumers—and for good reason. Accenture and the Retail Industry Leaders Association released data earlier this month that indicated more consumers than ever want retailers to personalize their shopping experiences. Of consumers surveyed, 63% indicated they were interested in personalized recommendations.
- Investments in the retail workforce will grow. The retail employment landscape is shifting, hiring is on the rise and the labor market is tighter and much more competitive. Plus, these days, the role of a retail sales associate calls for more than just sales and store admin—they must evolve from salespeople to consultants and experts. “Retailers that win…will deliver a meaningful human interaction that gives consumers confidence in what to buy,” said Nick Stagge, vice president of marketing at ExpertVoice. “This requires an increased responsibility in hiring, training and empowering sales associates to put the customer interaction first.”
- Retailers that offer compelling in-store experiences will flourish. People don’t flock to retail locations because it’s convenient (some still do, but “convenience” usually means shopping online). Modern consumers make the effort to head to physical retail stores because of the experience they get in the store. Some do it because they crave the social component of shopping; others do it because they love the excitement of treasure hunts and product discovery. Then there are those who want to touch and feel products for themselves. Retailers need to be attuned to the reasons why their customers shop offline, and then adjust to fit those needs.
- Back-office solutions and innovations will be at the forefront. From warehouse operations to inventory management, more effective logistics to enhanced customer service, consumers are demanding more efficient, more personalized expectations than ever before. Retailers can start to bolster their back-office operations by evaluating their processes and technologies to identify areas for improvement. If you’re unable to offer a seamless shopping experience between digital and brick-and-mortar, then it’s time to integrate your online and offline systems.
- Emerging payment options will gain traction. The process of ringing up sales continues to be a critical component of brick-and-mortar retail, and the checkout process is evolving. It may behoove you to explore emerging payment options such as mobile payments, particularly as younger shoppers—millennials and Generation Z—increasingly walk into your store. If your customers want to pay using their mobile device, or if they’re looking for more flexible payment options, look into the different payment types you can offer.
- Sustainability will be a major focus. This year more retailers will invest in sustainability as consumers choose to align themselves with businesses that support their values. In 2018, a number of companies expanded their sustainability efforts. For example, REI enforced sustainability standards for its 1,000 vendors, and North Face launched its Renewed line of damaged and refurbished items to further waste reduction. As such, retailers will improve on their practices to ensure they’re selling and delivering products in ways that aren’t harmful to the environment or society.
- Mobile messaging will provide a competitive advantage. Mobile messaging adoption has seen an upward trajectory in the last several years and it won’t slow anytime soon. Mobile phone messaging app users are expected to increase from 2.01 billion in 2018 to 2.18 billion in 2019. If you’re looking for a better way to reach your customers, mobile could be just the channel you need. When used correctly, instant messaging apps such as Facebook Messenger can be effective tools in addressing customer questions and sending product updates.