Looking ahead to 2019, we look at some of the trends set to affect the retail sector:
Environmental impact of products
The last year has seen a real shift in attitude towards the environmental impact our purchases are having on the planet with plastic straws disappearing almost overnight and zero waste shops popping up across the country. As awareness grows and people’s attitudes change, other areas of concern – such as the destructive impact of fast fashion – are coming under scrutiny. The fashion industry is one of the top five most-polluting industries in the world, and its consumers will hold retailers accountable for investing in eco-friendly production. Businesses who fail to do so will face significant pressure.
Wearables and fitness trackers – what next?
The products themselves are becoming sleeker, smaller and more convenient to use. From smart rings to chips built into your trainers – the range of products available continues to grow, and it’s not just fitness they’re monitoring. Devices track hydration, glucose levels, blood-oxygen levels, sleep, and smart watches are incorporating SOS and personal safety features. The technological advancements in health and wellness have now transformed the way we exercise, with virtual sports significantly increasing in its popularity. From baseball to cycling, technologies infiltration into the sports and healthcare will revolutionise the way we keep fit.
2019 will see AI fraudsters become a reality
AI will be used to learn about targets of phishing and even to replicate voice, handwriting and conversations. For those fraudsters who spend weeks or months learning everything about their target using digital information, AI will be able to do the same job much quicker. This enables phishing attacks to be more sophisticated and believable, increasing the success rate. Retailers will need to be extra vigilant when sending emails to consumers as AI fraudsters will be using your information to mimic those you trust in order to gain access to consumer bank details and more.
Shops won’t look the same ever again
With smaller format, mixed use stores providing the best experiences, retailers will be looking at ways to entice customers in and showcase their wares. With many mixing products and experiences already (Rapha has stores with coffee shops and Sweaty Betty offering yoga classes) the shift will continue with retailers moving away from large stores packed full of products. For example, mattress disruptor, Casper, is offering customers 45minute naps in ‘The Dreamery’ as a way to refresh when shopping, this blends both the product and experience authentically. Showcasing the product and offering a relevant but different experience will be key to standing out.
Consumers will no longer pay for delivery and returns
Consumers have become more discerning than ever and with many focussing on cost, paying for delivery is no longer an option. Consumers will choose to buy products from retailers who offer free delivery and returns or purchase more than they need to, to hit the minimum spend, with the intention of returning these extra products. WSJ placed brick-and-mortar return rates around 8-10 per cent, online its more than double that at 20 per cent. For retailer’s deliveries can be a logistical, cash flow and stock nightmare and this is a key area to be streamlined and many will look to digital solutions to solve the problem. Those who don’t will miss out on consumer spend which will be diverted to those that do.
Premium or discounting
We anticipate premium retailers and discounters will continue to expand and take market share from established mid-range players in 2019. Consumers will trade up to affordable luxuries with a focus on lifestyle and beauty brands such as Gymshark and Birchbox, whilst continuing the love affair with the discounters such as Aldi, Lidl and Matalan. In the current environment, those businesses that focus on their core offering and technology will win out. We believe this will be at the expense of established mainstream brands.
Find out more about how your business may be affected by future changes in the retail sector by contacting Andrew Westbrook.