What Retail Industry Trends are in Store for 2019
E-commerce companies opening brick-and-mortar stores. Walmart and Target trying to become chic. Artificial intelligence, augmented reality and robots showing up on sales floors. Mobile wallets adding momentum to the shift toward frictionless and cashless transactions. No checkout counters. Where in the world are retail industry trends going?
Like everything else, retail is constantly evolving. But over the past few years, that evolution has been accelerating at the speed of an electronic sales transaction. Big department store retailers are falling like post-holiday prices. America’s shopping malls have more vacancies than tenants. And high tech is moving from digital platforms to brick-and-mortar stores.
Expect more of the same for 2019 as what once seemed like fantastic, almost unbelievable, retail trends become reality. Although there are many different opinions about how the future of retail will shake out, experts agree one thing is certain: Shopping in stores will not be going away anytime soon.
According to the National Retail Federation, there are over 1 million retail businesses in the United States. And the fact that since 2010, retail sales have been growing steadily at almost 4% annually makes the brick-and-mortar retail industry a pretty solid performer.
Online sales still make up only about 10% of total retail sales in this country, and of the top 50 online retailers, 75% are traditional companies like Walmart, Target, Kohl’s, Costco, Best Buy and others.
“The story of retail’s death is greatly exaggerated,” says Barry Beck, co-founder of Bluemercury, a leading online luxury beauty retailer. “There will be more opportunity for well-placed stores than ever before.”
“It’s practically impossible to actualize your brand without a physical world presence. That’s why [traditionally pure-play ecommerce companies] are opening stores,” he adds.
Amazon’s purchase of Whole Foods in 2017 and its crusade to open AmazonGo stores were among the first signs that e-tailers recognized the importance of having brick-and-mortar footholds in the retail industry. Other online companies have followed. Casper, one of many online mattress companies that have thoroughly disrupted that industry, is working toward opening 200 stores. Warby Parker, an online eyeglasses company, along with e-commerce clothing retailers Zappos and Bonobos are also opening physical stores.
As these companies move into the physical world, they’re bringing new ways of doing business to brick-and-mortar retail. And there are several ways their moves, along with traditional retailers working to remain relevant in the market, will be transforming retail in 2019. Branding and technology are two prevalent themes in retail trends for the upcoming year.
Brands are built on products and the customers’ experiences with them. From Nordstrom to Home Depot, brands are working to build product recognition through engaging customer experiences. Nordstrom and Sephora stores interact with customers by offering beauty makeovers, product samples and styling.
Hardware stores have enhanced their customer experiences with new product demonstrations, how-to instruction on typical do-it-yourself projects, and in-store vendors offering everything from solar panels to home security systems. Expect that trend to grow.
While big-box hardware tries to be everything for everybody, many of the co-ops and independents are finding ways to market themselves as cozy and convenient, while still being full-service. Ace, for instance, has already begun its 2019 “Home Convenience Store” campaign which works to position its locations as easy-to-shop, customer-friendly neighborhood stores.
All the try-it-before-you-buy-it demonstrations build trust and rapport with customers which tend to lead to long-term relationships. One retail trend that got going in 2018 is how consumers began to seek out and do business with brands that both treat their people well and act socially responsible.
Some fast food chains, which for years have been criticized for low pay and little job security, have instituted programs to help employees continue their education or climb the corporate ladder. Large retailers such as Walmart and Amazon have both announced plans to increase their minimum wages significantly.
TOMS shoes built its brand on a promise to provide a pair of shoes to someone in need for every pair it sells. Other companies like Levi Strauss and Starbucks have used environmental sustainability initiatives to increase customer awareness for their brands.
This retail industry trend will gain strength in 2019 as consumers with a myriad of purchasing choices look to align themselves with companies they admire.
Technology Train Keeps Rolling
Even as companies seek more personal interaction with their customers, the cold world of data and technology will continue to play a bigger role in retail sales.
The Internet of Things (IoT) is probably the most extensive but least understood concept in retail. First mentioned in 1999 and approximately 10 years old, according to Cisco, the IoT connects billions of consumer goods through wireless technology to a cloud-based network in which data gathered from these items is stored and analyzed. The items can range from smart televisions and other consumer electronics, to fitness devices and self-driving cars, to items as simple as running shoes.
The companies that manufacture these items can take the information they’re providing and monitor how they’re performing. They can also help businesses:
- monitor their manufacturing processes
- improve product performance
- improve customer experience
- integrate and adapt business models
- generate more revenue
IoT products can also give consumers more information about their world and provide more control over it. Some of these items can essentially be the control devices for smart homes, remotely control heating, lighting and other electronic devices.
Augmented reality is another technology that’s not exactly new, but one retail trend that will grow in 2019. Ikea and Wayfair have developed AR apps that can place 3D images of their furniture in digital photographs of a customer’s living room or bedroom. Ikea also features several online planners that help customers design a variety of furniture options.
For years now, some hardware companies have offered computer apps that show customers what a paint color will look like on their walls before they purchase, and those applications are becoming more user-friendly. Now, shoppers can either use their smartphone camera and an app to view color possibilities, or they can download photos of their home’s exterior or individual rooms to a website and paint them with different hues.
Mobile point of sale is becoming more popular. More and more, consumers are using their smartphones or other mobile devices to shop. Christmas Day last year was the first time that mobile accounted for more than 50% of all purchases, and during the second quarter this year, mobile devices accounted for 41% of all orders.
The Mobile Shopping Focus Report calls mobile shopping the “biggest disrupter to retail since the inception of eCommerce,” and mobile is the No. 1 source of digital growth in retail. Expect that retail industry trend to gain more momentum.
Mobile shoppers aren’t limiting their browsing and buying to e-commerce retailers, either. Google says mobile searches containing the phrases “near me,” “can I buy” or “to buy” have quintupled over the last couple of years.
The next step, which in some ways has already been taken, is for brands to reach out to consumers rather than waiting to be pinged through product searches. How many times have you Googled something like winter boots and then found ads for those products littering your favorite websites? With all the information consumers contribute when they bombard Google with shopping searches, it’s no surprise that some brands know our preferences better than we do.
Get used to it.
Merchants with sophisticated business management platforms already have access to technology to keep them abreast of retail evolution. These systems not only help them manage inventory and sales, features and integrations can enhance marketing and customer loyalty programs.
No matter what brand is being sold, or where it is selling – online or in-store – or what technology is being used, personalizing the shopping experience for each customer has become a big deal and will get even bigger, and easier, in 2019.
Both online and traditional store merchants have technology available that allows them to know what products their loyal customers purchase. This knowledge and the ability to send targeted messaging to customers’ smartphones allows merchants to customize offers on the items or associated products they’ve purchased in the past.
For instance, if a customer has regularly purchased wild bird seed, a special offer on bird houses or other kinds of wildlife feed could be prepared and sent. Another customer might be consistently buying barbecue charcoal. They’re personalized offer could be for new barbecuing utensils or the latest grill. Technology retailers know exactly what platforms their customers purchase and can suggest associated products. These offers promote upselling or cross-selling that can increase customer retention while boosting sales at the same time.
Specializing and finding appropriate niche markets is another way of personalizing your offerings and attract more customers.
Merchant Tech – It’s Not All About the Customers
Not all of retail’s technological advancements are aimed at customers and the shopping experience. Even though digital platforms offer several ways to reach out to customers – through geofencing, in-store Bluetooth beacons, and social media marketing – the new technology also allows merchants to more easily manage their stores. They can monitor and control product pricing, create signage and marketing all from a mobile device through their point of sale platform.
The recently-released True Value Marketing Technology Suite App has all these features and more. It allows merchants to compare their prices with competitors and review sales history of products simply by scanning the barcode. Sales associates can access informational videos to demonstrate products for customers. It can list both comparable and associated products with a possible purchase. And it can use artificial intelligence to create sales signage through simple voice commands.
Expect brick-and-mortar retailers to utilize more mobile applications and increase the use of video, personal assistants and touchscreen self-service on the sales floor, too. More merchants will be enhancing their shopping experiences with new product and do-it-yourself videos. Artificial intelligence in devices such as Alexa and Siri will guide customers to products or provide additional information.
Many companies are moving toward encouraging customers to do some of their own ordering and checkout. McDonald’s is amid a rollout of self-service, touchscreen kiosks that allow customers to order and pay for their food will eventually include all 14,000 of its restaurants. This technology is already in use in some retail stores where customers can use electronic kiosks to check on in-stock merchandise or compare prices of other stores.
Future is Now
Whether you’re looking to grow your business by enhancing your brand or shopping experience, or are looking to make it easier to manage, the information and technology to do it is available now. So, the new year might be the perfect time to join the retail evolution. It won’t be slowing anytime soon.