Did you know that September 23rd is the official start date of the fall retail season? I didn’t. And then comes the holiday shopping season. Most agree that it begins the day after Thanksgiving and ends after New Year’s Day. We have heard for years that brick and mortar and maybe even all of retail is dead or dying as we know it. Well, forecasters must not have gotten that message.
The National Retail Federation predicts that retail sales will grow between 3.8 and 4.4 percent in 2019. Deloitte says holiday sales in 2019 will grow between 4.5 and 5 percent. They also predict that e-commerce sales will grow 14 to 15 percent from 2018. It doesn’t look like retail is dead or dying, but it is rapidly changing and evolving to keep up with consumers needs and changing habits. Following are a few examples.
1. Some big-name retailers are shrinking.
- Facing tough business challenges, Gap Inc. is splitting off Old Navy from its other, less healthy brands.
- Similar to Gap, J.Crew is splitting off its Madewell chain.
- L Brands has closed Henri Bedel and sold La Senza.
2. Drones are finally coming to retail delivery.
- Amazon has tested them.
- In a partnership with Alphabet, Walgreens will begin store-to-door delivery on a limited basis in Virginia.
3. Shopping on social media continues to grow.
- Snapchat and Instagram are now offering e-commerce capabilities like shoppable tags.
- Sites will begin allowing users to load their credit card information on their platforms.
4. In-store pop-ups will grow inside large retailers.
- Digital brands like Allbirds, Casper, and goop will begin showing up as pop-up shops within large retail stores.
- Major retailers see pop-ups as huge generators of excitement, drawing in a more diverse customer base.
5. Personalization will grow.
- Nordstrom and Sephora have responded with new concept stores.
- Levi offers on-line and in-store personalized embroidery.
- New Balance will allow customers to design their own NB1 shoes, ala Nike ID.
6. Artificial Intelligence’s (AI) impact on retail is growing.
- Visual search (real-world images for online search) uses AI to understand the content of images.
- AI makes “recommendations” offered by websites more accurate and personal. Small beacon devices can now transmit signals based on AI direct to individual’s cell phones while they are shopping in brick-and-mortar stores. (Buy me! Buy me!)
- Trax retail is using cameras combined with AI to keep track of inventory. The technology pinpoints products that are running low on shelves.
- Enhanced AI video surveillance can alert retailers to suspicious in-store activity.
7. There will be more buy online, pick-up in store (BOPIS) options.
- More and more consumers want instant gratification. Eighty percent of online consumers expect to be able to pick up their orders in-store within 10 minutes of arriving.
- Many retailers see BOPIS as a way to combat Amazon’s one-day delivery.
- Parcel Pending, a smart locker solution provider, predicts that more consumers—particularly millennials—will adopt BOPIS as their primary shopping method this fall.
- Parcel Pending’s research shows that 90 percent of retailers plan to implement BOPIS by 2021.
8. Sustainability will become a new focus.
- Outdoor and sporting goods retailers like REI have led the way in pushing for expanding sustainability efforts.
- The UN launched the Fashion Industry Charter for Climate Action. The group’s mission is to achieve net-zero emissions by 2050 and has gained support from brands including Adidas, Gap, Target, and H&M.
9. Private label merchandise will grow.
- CB Insights’ research shows that sales growth of private label products is now three times higher than branded products.
- Last year Target launched eight new private label brands. Amazon added 66 between the beginning of 2017 and April of 2018.
For sure, the retail landscape is experiencing rapid change. But for the most part, retailers are adapting to that change. So, where, how, and when we shop will continue to change and evolve. But one thing is for sure—we will continue to shop. Retail is far from dead.