Retail Predictions
Retail is a dynamic industry with changes occurring so often it can be hard to keep up. Corporate shake-ups, fashion trends, new products, and rapidly changing technology all contribute to this crazy environment. With so many retail components, it can be tough to know what to expect, but we’ve identified a few key trends that we see leaving big impressions and even bigger opportunities for retail.
1. Brick and Mortar Will Bow to the Market
The ongoing evolution of B&M is not slowing down in 2018 and this year retailers will be faced with a big decision, choosing their priorities and direction in serving their customer. Stores will have to pick a lane and determine how they want to commit to offer the best customer experience possible. They may decide to zero in on the customer and expand the experience through increased staffing, product samples and demos, and engagement marketing events. Or, brands may consider moving away from a traditional retail shopping experience and focus more on the support of the customer through the brand’s ecommerce channel. Stores may select to use their B&M facilities as a distribution hub, providing customers easy pick up or fast local delivery to compete with Amazon. Operating in the middle, and offering a little bit of everything will no longer cut it and to remain relevant, retailers will have to choose.
What this means to you:
This really depends on what direction you decide to take your store and brand but nonetheless, there is no more sitting back and waiting on this one. The time for action is imminent for brand relevancy in 2018. For those who chose to focus on building the customer experience, ensure that you are competitive in the market with engagement marketing. If you lean more towards the ecommerce side, invest in inventory management by upgrading your inventory systems to make the pick and pack process as seamless as possible. Regardless of the direction you choose, make sure you provide the proper training and resources for your employees on their new roles to ensure success.
2. Voice Shopping Will Be Heard
Voice shopping is starting to pick up some steam and will continue to snowball as we move into 2018. Voice service tools like Alexa, Home, Siri, and Cortana are bringing convenience through voice shopping, to a whole new level. Reordering your favorite brand of laundry detergent, kitty litter, or cabernet is easier than ever by asking your favorite voice service device to order it for you. After a few quick pre-set clicks, it can even show up at your house within the same day. Today many of the products that consumers are purchasing via voice shopping are commodity based but the capabilities continue to grow with voice services adding new partnerships daily. Brands like Domino’s, Starbucks, and Uber, (to name a few) have been added to the voice shopping roster and are building a foundation so that you can order whatever you want, whenever you want. With last October’s announcement that Target will be partnering with Google Home, in addition to the previously determined agreement with Walmart, it looks like today’s major retailer players are signing up to compete with Amazon’s Alexa. As the retail partnerships and brands continue to expand, the convenience factor will quickly outweigh any customer hesitations to adapt their shopping habits.
What this means to you:
Unless your business has the capability to partner with a voice service, it’s time to strategize a different approach. The convenience that voice shopping offers will be tough to beat so your business’s focus needs to be on the experience that you are offering your customers and the value that you can provide. Remaining relevant against these behemoths will be tough but carving out and getting more specific on the niche that you offer, and that they can’t, will generate success.
3. Made in the USA
I know this one has been around forever and can be a bit of a hot topic but I think that 2018 will see some major strides in bringing manufacturing back to the USA. The popularity of Made in the USA has never really gone away but a strong resurgence has been building for the past few years and the timing seems right for 2018. Rapid economic growth in overseas manufacturing countries combined with US customer demand is creating an environment that inevitability will bring manufacturing back stateside. Additionally, today’s consumers are becoming increasingly savvy when it comes to product, are expecting more transparency (see #4) from their favorite brands, and will respond positively to a Made in the USA story. It seems like this 2018 trend may fit the bill, and with the right packaging and marketing, is a monster opportunity.
What this means to you:
While price points still remain a challenge, manufacturers should consider if there are products in their line that can fit into this trending niche. Focus on key items, products that can be sourced locally (as in the USA), items that can withstand a higher price point, products that may require unique craftsmanship, or items that create an amazing “Made in the USA” story. Made in the USA has been a conversation for a long time and those that can find a way to profitably execute this strategy will have retailers clamoring for their product and win big time.
4. Today's Emphasis on Authenticity and Transparency Will Lead the Way for Tomorrow's Ethical and Sustainable Apparel
Authenticity has been one of 2017’s biggest buzz words for retailers in today’s market and brands continue to market the power of authenticity by remaining true to one’s own personality, spirit, or character. Customers are looking for authenticity as part of their brand experience and can spot a phony a mile away. Retailers that are carving out their specific brand authenticity and weaving it into every aspect of their business and culture, showcasing it through their marketing, product, and customer experience, are not only finding monetary success but also reaping the brand loyalty that comes with it.
Transparency or visibility and accessibility of information, has grown in popularity in the market as retailers like Reformation, Everlane, and Lauren Conrad’s The Little Market are keen on the concept that sharing more with their customers is better for business. Sharing information about their manufacturers, supply chain, and pricing are just a few of the insights that these retailers are giving their customers. By doing so they are providing them with the visibility that they crave and establishing the credibility, trust, and at times, the social statement that they align to.
The ever-popular Millennial demographic is leading this charge with their purchasing power and it doesn’t seem like this trend is going to go away. In fact, retailers that are providing transparency are going to be positioned to make some substantial brand loyalty gains as Millennials get older. According to a survey by Forbes, “94% of survey respondents are likely to be loyal to that brand. And when consumers switch to a brand in favor of increased transparency, they are likely to stay for the long haul. In fact, 56% said they would be very likely to stay loyal to a completely transparent brand for life.“
What this means to you:
As customers continue to demand more authenticity and transparency from their favorite retailers, it seems that this conversation will meld organically into the global conversation regarding ethical and sustainable fashion. While retailers are still figuring out what this means to the customer and how to manufacturer it in a profitable way, the conversation is happening now and building momentum in the current retail environment. With global brands like Eileen Fisher and Stella McCartney advocating for ethical and sustainable fashion, it’s a matter of time before the industry as a whole moves forward. If you want to get ahead of this trend, dedicate some of your R&D dollars to this concept and start partnering with your suppliers to innovate your fresh, new product. When the time is right, you will be ripe to move ahead of the market in what will certainly become one of the next big fashion initiatives.
5. A Customized Customer Experience
The customer experience will continue to evolve this year too, with an increased emphasis on customization. Customers want to showcase their own unique personality and fashion is an excellent to broadcast to the world exactly who you are. Today’s consumers want the opportunity to have a say in how products are designed whether that’s through silhouette, graphics, color, fit or all of the above. They are eager to provide ideas for your products and you should be eager to let them. By developing products and sales channels that give your customers this experience, you not only engage them but also keep them excited about your product and brand.
What this means to you:
Give your customers what they want, the opportunity to design a product. This is a prime opportunity for ecommerce so if you can offer full customization on your some of your products, go for it! If that is a little more challenging, try a social media contest asking for designs and voting on the winner that will go into production. By doing so you will give your customer not only an interactive experience but have also created an emotional bond to you and your brand, creating more brand loyalty and an everlasting relationship with your customers.
Insights
While I don’t have a crystal ball to provide me with 2018’s biggest retail trends, these are my speculations based on today’s retail environment. I’m sure there are other trends that I haven’t considered and maybe some unexpected surprises in the upcoming year but I am eager to hear your perspective. What retail trends do you think will be big? Please leave your thoughts and feedback in the comments below.
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