The world of retail moves fast, and trends constantly come and go. So far, 2019 has been no exception. With the rise of online shopping, the future of retail has never been so unpredictable – or exciting!
The first half of 2019 has come to an end, and Q4 is just over the horizon. What was popular yesterday might become obsolete tomorrow, and it can be difficult to keep up. However, that also means there is massive opportunity for retailers and brands to plan, strategize, and grow with the changing times to get ahead of the competition. Thankfully, Q1 and Q2 were full of important lessons and hot trends to be aware of. The more you know, the better you’ll be prepared to tackle anything and everything that lies ahead.Here are the top 9 major retail trends we noticed in Q1 and Q2 of 2019. With this knowledge in your back pocket, you can begin to plan for Q4 with confidence:
Digital-Only Brands Going Into Retail
In an effort to develop more personal relationships with customers and stand out from the ever-growing inundation of online advertising, digital-only brands continue to open retail locations nationwide. Think Warby Parker, Glossier, Casper, Bonobos, etc. Although the majority of these retail converts are apparel brands, it’s an important trend to take note of. Pop-up shops are also becoming increasingly popular. Pop-up shops allow digitally native brands to get a taste of the retail experience, interact with customers, and test new products in new markets. They also provide an additional revenue opportunity. According to DigitalCommerce360, 90 cents of every retail dollar in the U.S. is still spent at physical locations, so venturing into retail is a good business decision. By entering brick-and-mortar stores for the first time, digital-only brands can have the best of both worlds; a strong, captivating, effective online presence, and face-to-face customer interactions to build long-lasting, loyal relationships.
Omnichannel Shopping Experiences
Shoppers are everywhere – online and in-store. And they want the entire shopping experience to be as seamless as possible, from initial product research to ultimate purchase decision. Successful retailers are rising to this challenge, meeting customers where they are, and providing multiple touchpoints along the way. According to IDC Retail Insights, retailers using omnichannel strategies typically see a 15-35% increase in average transaction size! Retailers must make an active effort to maintain consistent branding, messaging, and customer service across all channels, including websites, social media, and physical brick-and-mortar store locations. If not, they’ll miss out on valuable conversion opportunities. Omnichannel shopping experiences are essential to capturing – and keeping – consumer attention. By adopting an omnichannel presence, retailers stay top-of-mind during the entire customer journey, ultimately leading to more sales.
Ethical & Value-Based Companies
Think about Nike’s viral “Dream Crazier” ad with Serena Williams that celebrates female athletes in all their forms. It was an instant hit, and people continued to share the ad on social media for days, weeks, and months following its debut. More and more, customers are coming to expect some form of social advocacy from companies. And it’s not just Nike. Warby Parker donates a pair of glasses for every pair bought; TOMS does the same with shoes. Yes – it’s an honorable thing to do, but it’s also a smart marketing move. Consumers often shop with their emotions first, money second. If a person has the option to buy a product from a brand with a solid “do-good” mission vs. a comparable product from a brand without one, which do you think they’ll choose? It’s an easy answer with a solid reason – people, millennials especially, like to know their money is going somewhere good. Corporate responsibility, social consciousness, and the overall treatment of employees are all important considerations for retailers who want to leave a lasting impact.
Technology-Driven Inventory Management
It’s no secret that technology is the future of 99% of businesses. Retail is no exception. Without a solid technology strategy, retailers will quickly fall behind in today’s fast-paced world. Technology-driven inventory management has become a basic necessity for successful retailers. By ensuring the right products are stocked at the right times, retailers are in a better position to please customers and secure sales. Additionally, with the help of technology-driven inventory management, retailers avoid costly over-stocks and rush shipment costs due to high demand. If technology isn’t up-to-date, or if products aren’t stocked appropriately, reputations will suffer. When retailers use technology-driven inventory management solutions, they automatically improve their bottom line. It’s as simple as that. Technology provides full visibility into the entire inventory management process, so retailers can easily handle current needs and solve future challenges.
Private Labels
Grocery stores in particular have collectively increased their selection of “private label” products in order to compete with big name brands. Kroger, for instance, offers “Simple Truth” and “Private Selection.” Target recently launched “Universal Thread.” Costco is famous for “Kirkland Signature,” and Whole Foods has “365 Everyday Value.” According to the Private Label Manufacturers Association, 25% of products sold in the United States are private label or store brands. Even Amazon has won big with its “AmazonBasics.” By presenting a product as being made or manufactured by the retail location itself, the move toward private labels works in the retailer’s favor; customers become loyal to the actual store, not just the 3rd party brands they stock on their shelves. In 2018, private label was a $170 billion dollar industry, so it’s safe to say this retail “trend” is here to stay.
Experiential Retail
Modern consumers no longer care strictly about products; they want something more. Enter, experiential retail. This trend has been popularized in particular by millennial shoppers who favor experiences over material things. Just take Samsung, for example, who opened Samsung 837 in New York City’s Meatpacking district. According to Samsung, “it’s not a store, but a new kind of place filled with ideas, experiences, and Samsung’s cutting-edge devices.” At Samsung 837, customers can experiment with augmented reality, interactive art displays, and even see live performances. Samsung 837 isn’t about selling a product; it’s about selling a brand. A less extreme example: Starbucks. Starbucks does more than sell coffee; it sells an experience. With each cup of coffee, Starbucks also sells cozy chairs, free Wi-Fi, and a feeling of community. In fact, CEO Howard Schultz once said he wanted customers to think of Starbucks as the “Third Place” in our daily lives, after home and work. Simply remodeling a store is no longer enough to create consumer interest and excitement – retail locations must plan to engage on a deeper, more human-centric level.
Retail Associates Are Now Customer Consultants
Long gone are the days of retail associates simply pointing shoppers in the general direction of various product displays. Today, retail associates are becoming active customer consultants, fostering personal interactions, providing product information, and ultimately guiding consumers through the purchase journey. This shift will inevitably mean that retailers need to place added emphasis on hiring the right people and providing adequate training. If a customer has a question about a specific product, retail associates need to be able to provide knowledge and guidance to inspire consumer confidence. If a shopper has a bad experience in a retail location, they’ll be much less likely to come back. After all, there are so many other options! Retailers need to hire the right people, and reward good employees with adequate pay and work perks. Store associates are the living, breathing face of retail. They’re worth investing in.
Back Office Operations Are More Important Than Ever
Yes – a retail location’s layout, design, and product displays need to be compelling, but what happens on the back-end has become more important than ever. From warehouse operations to inventory management and efficient logistics, back office operations are essential to enhancing the entire retail shopping experience. In order for retailers to grow and flourish in cadence with the modern, mobile world, they are adopting next-gen technology that offers full visibility into the entire operations process. If there are any inefficiencies in your back office operations, it will soon become glaringly obvious to in-store shoppers. For instance, if your online marketplace is not connected to your retail location, the entire shopping experience will be broken. Get ahead of any issues by proactively investing in top-quality technology. Your sales numbers will thank you for it.
Outsourced Retail Experts Are On The Rise
With so many moving pieces to keep track of in the modern world of retail, more and more retailers are turning to 3rd party experts who can handle the day-to-day details of running a retail space. A 3rd party retail expert can help cut back on tasks like restocking, inserting price labels, and setting up displays, so the retailer can focus on other big-picture initiatives. 3rd party retail experts live and breathe retail, and can handle every part of the process from merchandising, product resets, and point-of-purchase displays, to logistics, fulfillment, and technology. By working with a 3rd party retail expert, you can focus on your overall strategy while they take care of the other stuff. Outsourced retail experts help companies stay up-to-date with the latest industry trends – things they see and experience in the field all day, every day. In the current retail climate, you always have to be one step ahead of the customer. 3rd party retail experts can help make sure that happens.
Conclusion:
The first half of 2019 has seen many impactful changes in the world of retail, but only time will tell which trends are here to stay. Luckily, with the right team of retail experts on your side, you can feel confident that nothing is slipping through the cracks. At SRS, we can help you navigate the challenges of modern retail, and provide cutting-edge solutions that will help you stand out from the other brands competing for shelf space and customer attention. Through new product launches, redesigns, promotions, and seasonal pushes, we can help you create realistic, compliant, effective programs that deliver success. If you’re looking for a partner to help you navigate the complex, ever-changing retail world, SRS is here to help.
Contact us at info@srsmerchandising.com or (513) 272-3439 to get started!