New years bring new trends — as well as new opportunities and challenges for brick-and-mortar retailers.
It’s important to keep apprised of retail trends in today’s rapidly changing industry landscape. You might be riding a wave of healthy holiday sales right now, but looking ahead is what will help you stay successful.
We spoke to some industry experts for their take on the dominant retail trends that in-person sellers can expect in 2019 and how they can stay ahead of the competition.
Retail as a Service
“Retail as a service” essentially means retail is now about more than simply walking into a store and making a purchase. The rise of ecommerce in recent years has challenged physical retailers to amp up their in-store experience by offering value adds and other incentives shoppers can’t get online.
Meaghan Brophy, retail analyst at FitSmallBusiness.com, says this retail trend is an opportunity for smaller in-person sellers in particular.
A big part of what sets independent retailers apart is their ability to really connect with their communities and shoppers on a personal level and offer unmatched customer service.
Brophy predicts 2019 will see retailers focus on brand loyalty and trust by providing services on top of the products they sell.
“Independent retailers will continue to focus on the non-merchandise aspects of their business, such as hosting classes and events, offering personalized gift wrapping and delivery, registry services, and hosting private parties,” she says.
FURTHER READING: Learn how to create a loyalty program your customers won’t ignore.
Retail as a service is also opening the door to product-free retail experiences.
“Inventory-free retail hubs have risen in popularity by providing consumers a relevant blend of people and services under one roof,” says Kenny Rosenburg, VP of design at BVAccel.
One example Rosenburg points to is Nordstrom Local, which allows shoppers to enjoy nail services, meet with tailors for onsite alterations, and eat local cuisine.
In London’s Shoreditch neighborhood, concept store AIDA’s traditional retail shopping experience is complemented with an onsite café and free WiFi, and it’s not uncommon to see people working on their laptops through the store’s windows. Nearby bike retailer Rapha is a store-café hybrid that hosts in-store race viewing and organizes group rides.
Image: Alexandra SheehanAmi Ziff, head of national retail acquisitions at New York–based real estate firm Time Equities, also sees this trend.
“Retailers are reinventing themselves to stay relevant,” he says. “[They’re] reinvesting in themselves to address new consumer shopping patterns. For example, Walgreens partnering with MedExpress to launch urgent-care clinics.”
Retail as a service won’t necessarily lead to additional revenue streams, but it can. With the rise of pop-up and pop-in shops, collaborations, and service-based offerings, retailers have many options to generate revenue in ways they never have before.
Rental, resale, and subscription of retail goods are on the rise, says Ziff, who gives brands such as Rent the Runway, RealReal, and Tradesy as a few examples.
FURTHER READING: Looking to add a service component to your shop? Here are five businesses that have done so successfully.
Experience Will Still Be the Priority
The idea of in-store customer experience isn’t new, but consumers’ expectations of the experience are changing. It’s no longer enough simply to greet customers, offer personalized recommendations, and get them out the door with a seamless checkout process. Retailers now have to push the boundaries of the in-store experience — an overarching theme for the rest of the retail trends on this list.
“Shopping a brand needs to feel the same, regardless of channel,” says Carlos Castelán, managing director at the Navio Group. “With an increasingly complex customer journey and dozens of customer touchpoints with brands, from apps to websites to brick-and-mortar stores, companies need to present a seamless experience.”
FURTHER READING: Learn how multichannel sales can help your retail business prosper.
Castelán says outdoor brand REI is an example of a company that does “a tremendous job providing a great online experience, and those seeking more information on a product are able to come into a store and speak with a highly knowledgeable expert to match the product to their need. The ability to shop conveniently online complemented by an elevated in-store experience provides REI customers with the best of both worlds.”
Customer experience goes beyond staff simply providing expertise and assistance. Matt Warren, CEO and founder at Veeqo, says retailers need to make a visit to their store an event for shoppers.
“[Look at] trendsetters like Rebecca Minkoff, with sleek decor, eye-catching product arrangements, and technology on the walls offering personalized fashion tips on new styles,” he says. “It’s a place consumers actually want to go for a genuine retail experience, not just show up to buy a product.”
Warren predicts that retailers who want to succeed will double down on the omnichannel customer experience in the New Year. Retailers failed in 2018 “not from a lack of product demand, but because people simply weren’t excited to visit their stores and could get a better all-round experience somewhere else,” he says.
We’ll likely see more trailblazing brands win big by adopting [an omnichannel] strategy, while bankruptcies continue to hit the ‘old guard.’
Quality Data Will Replace Big Data
Big Data has been at the forefront for every forward-thinking business. And now, as technology and brands alike have caught up to this retail trend, retailers have the opportunity to use 2019 to get a better handle on the quality of their data.
Mike Means, VP of strategic partnerships at Validity, says, “Data is still king, and retailers of all types and sizes must keep their customer relationship management (CRM) system data optimized if they want to effectively engage with customers, create meaningful relationships, and maximize revenue opportunities.”
So, how can you ensure your customer data is accurate? Means recommends an investment in data-quality solutions, such as data verification and cleansing tools that provide deduplication, email validation, and data standardization.
FURTHER READING: Learn how to leverage data in your retail store.
Even the best retail products need to come with great customer experiences or you won’t create brand loyalty. Having high-quality data in your customer relationship management and/or point-of-sale system is key to delivering those experiences. With accurate contact information, such as validated email addresses, you stand a better chance of reaching your customers in a timely fashion with news, promotions, and other valuable upsell opportunities.
With an up-to-date product purchase history, you know what customers are interested in and what pain points they’re trying to solve, helping you pinpoint products that will have the most appeal. And with details about the customer collected over time, you not only build a lasting relationship, but you make it so anyone from your company who comes in contact with them can make the customer feel like they ‘know’ them.
Data Will Get Put to Work
“Amassing a billion data points about your customer is great, but it’s not the end game,” Joanna Rutter, marketing specialist at Dor, says. “If 2018 was the year we focused on data for the sake of intelligence, 2019 will be the year data delivers the insights necessary to create a plan for higher in-store engagement.”
As retailers get a better handle on quality data, they’re going to need to find ways to apply it to improve their business. Conversion copywriter Momoko Priceadvises not being an “askhole” — meaning, don’t ask questions of your customers and your data and do nothing with it. Your data is only as valuable as the actions you take based on the data.
So, how do retailers do that? Rather than opening more stores to generate more sales, retailers will look to expand strategically with data-backed decisions.
“In 2019, we’ll see the smartest retailers confidently open stores based on historical foot traffic and revenue trends — and perhaps even strategically close a few of their lowest-performing stores — much more than we’ll see arbitrary store openings as part of a generic operations strategy.”
According to a Pew Research Center report, more than three-quarters of purchase decisions are made after looking at or trying a product in-person.
“Because of this, there’s a growing importance for brands and retailers to track in-store display engagement as a crucial part of their overall marketing strategy,” says Bob Gatta, CEO at Data Display Systems. “Capturing engagement provides an understanding of where, when, how, and which customers are interacting with your products.”
Retailers then have the opportunity to apply the insights from this data to their in-store marketing and merchandising, and influence their digital messaging.
Retailers Will Begin to Use Artificial Intelligence Successfully
Artificial intelligence (AI) has been around and in use for a few decades, but in 2019 retailers will grasp how to most effectively take advantage of this tool. And it’s about time: 77% of consumers regularly use an AI-powered service or device.
Allen Yesilevich, VP of marketing and growth at MC2, sees retailers’ use of AI becoming more sophisticated, guiding customers down a buyer journey that’s specifically tailored to them.
“Using conditional logic, pre-loaded questions will be designed to understand whether a customer is ready to make a purchase online or if they need to be further nurtured through a recurring marketing campaign,” he says. “Either way, the captured data can be used to effectively quantify the long-term investment of the store and the lifetime value of each customer.”
The Continued Evolution of Fulfilment
Consumers are demanding more of retailers. When it comes to fulfilment, they’re looking for two key characteristics: fast and free. According to Shippo’s 2018 Shipping Report, 15% of consumers want same- or next-day shipping, but only 1% of ecommerce businesses offer it. Two-thirds of small- and medium-sized businesses offer some type of free shipping, however. This is a strategic move, considering 34% of consumers would consider take their business elsewhere if a brand doesn’t offer free shipping.
These stats don’t apply only to ecommerce businesses. Kent Savage, CEO and founder of Apex Supply Chain, says retailers who want to stay ahead in 2019 should look to leverage technology to help streamline fulfilment.
“Ecommerce activity is pushing retailers’ offline operations and stores to become more flexible,” he says. “The goal is to remove friction from the customer’s purchase and fulfilment experience.”
FURTHER READING: Learn the ins and outs of outsourcing your order fulfilment.
This will drive more creative purchase and fulfilment options, including buy online, pick up in-store (BOPIS), in-store returns for online purchases, and even last-mile delivery.
In 2018, BOPIS accounted for up to 30% of online revenue for some retailers, and 28% of retailers said internet orders picked up in store could be up to 20% of total online sales, according to a Signifyd survey.
“One way we’re seeing this happen is through the use of self-serve automated lockers for order pickup and return,” says Savage. “It benefits the customer and the retailer, giving employees more time to serve other customers and ensuring order-ahead customers can get their purchase quickly.”
Target, Walmart, Kohl’s, and Home Depot are just a few big-box retailers already taking this approach.
Fulfilment can also refer to the checkout experience. Dan Westmoreland, director of inbound marketing at Deputy, points to self checkout as a trend that emerged a few years ago but is only now integrated strategically into the in-store experience.
“Self checkout is impacting more than just the customer experience,” Westmoreland says. “To cut labor costs and improve ROI, retailers will work to make customers more comfortable with this technology.”
Navigating the Logistical Complexities of Omnichannel
Ecommerce versus brick-and-mortar is no longer a battle. In fact, the two are growing at similar rates, according to Deloitte — lines are being blurred, and it’s no longer enough to simply exist and sell via one channel. This omnichannel approach, however, has no shortage of challenges.
Digital natives like Warby Parker, Harry’s, and Casper have gone from niche brands to household names.
“Brands that started out as online-only, direct-to-consumer will continue to expand into physical stores, whether their own standalones or with existing retailers,” says Joel Beal, CEO and co-founder of Alloy. “As brands make the clicks-to-bricks move, one of the key challenges they’ll face is supply chain planning, which becomes much more complex when there are physical store locations to allocate inventory for.”
Maintaining control of your stock when embracing a multichannel sales strategy is essential to operational success, and multi-store retailers will need to look at and optimize inventory at the individual store level, rather than taking a regional approach, Beal says: “Companies are becoming increasingly attuned to the importance of using store-level data to customize supply to match local demand. With sophisticated data analysis options now available, brands and retailers will capitalize on the opportunity to improve sales.”
It’s important to have the tools in place that can grow with your business — and they need to have the automations, integrations, and scalability that your business operations rely on.
Emphasis on Retail Employees
While AI, click-and-collect, and other technologies may seem to make humans obsolete, it’s actually the opposite. As technology comes to the forefront, authentic person-to-person interactions are crucial to developing authentic relationships that lead to in-store sales. An emphasis on the people behind the brand is expected to be a big trend for 2019.
Happy employees equal happy customers.” —Chris Guillot, retail consultant, instructional designer, founder of Merchant Method, and publisher of Retail Shift: Teaching Success on the Sales Floor
“To exceed consumer expectations consistently, brands must ensure that customer interactions are rooted in empathy, genuine engagement, and emotional intelligence — areas that haven’t been talked about or taught enough,” says Chris Guillot, retail consultant, instructional designer, and founder of Merchant Method. “They’re key counterpoints to the data-focused conversations that have dominated the industry, which means they provide leaders with an opportunity for meaningful competitive advantage.”
This doesn’t mean you need to go on hiring spree. Your existing workforce has potential that can be developed. But retailers need to look to more innovative approaches to training and staff development to adapt to the evolving retail landscape. To be a salesperson isn’t enough — retail employees are ambassadors of the brand and integral to the human experience.
Terry Hawkins, chief education officer at Progress Retail, believes soft skills — namely, the ability to be empathetic — will become more important than traditional sales know-how.
“We’re far from the days when a retail job was the job you took while you waited to find a real job,” she says. “Retail employers are waking up to the fact that beautiful stores also need to have switched-on, socially conscious, and empathically driven teams.”
To train staff to be empathetic, it’s important to meet them where they’re at. “The majority of retail team members were raised with a tablet in their hands,” Hawkins says. “Intimacy, emotional connection, even the simple act of looking into another person’s eyes, doesn’t come naturally.”
It’s important to cultivate a community of empathy, a brand culture that cultivates this environment with authentic human interactions. “Empathy is not a skill or a process — it’s an outcome of a compassionate and caring culture,” Hawkins says. “It’s the reward of having integrity in check, and staff congruent with the organization’s values.”
More Transparency and Corporate Social Responsibility
Consumers have put the pressure on companies to take a stand for real-world issues for a while now. And as more brands have incorporated social good and transparency into their identities, consumers are getting better at sniffing out inauthentic businesses.
An increasingly socially conscious consumer base is demanding the same of the brands they support — and the products they buy.
“Customers want to know how products are being sourced, what ingredients they contain, and what the supply chain looks like,” Castelán says. “RXBar became popular because of the simplicity of the product and having transparent labels that highlighted its limited ingredients.” Many retail brands across industries will look to do the same.
Rosenburg also points to this as an increasingly important trend for 2019.
“Zero-waste product design and ethical sourcing has become a core tenet for brand loyalty,” he says. “Brands like AllBirds, Boll & Branch, and Frank & Oak create deeper, emotional connections with their customers through an alignment of social values committed to sustainability.”
And it’s not just the environment that customers are demanding brands to respect. According to one study, 66% of consumers want brands to take a stance on big political issues too. Many retail stores have dropped Ivanka Trump’s brand in a stand against her father, U.S. President Donald Trump.
To make corporate social responsibility (CSR) work for you, find something that resonates with both your brand and your ideal customer and integrate it into your brand story and products naturally. Pura Vida Bracelets is one great brand to look at, as well as Toms, and Ivory Ella.
Retail Trends: Elevating Your Business in 2019
With 2019 in full swing, you’ll want to take proactive steps in your business to ensure you’re ready to accommodate changes in consumer behavior. Remember: It’s not online versus physical retail anymore. Forward-thinking retailers need to think about how to make online and offline work together seamlessly.
Which 2019 retail trends are you most excited or prepared for? Are there any trends you predict that haven’t made our list?