by Shubhi Srivastava
27-February-2019 | 7 mins read
The retail industry in 2018 was a turbulent space to be in, with both growth and failures served in a perfectly balanced platter. As some companies announced bankruptcy, others enjoyed higher profits, and as several shutters closed, many reaped the benefits of omnichannel presence. Retail stalwarts might have enjoyed the increased spending power of consumers, but had to conform themselves to realise the mantra ‘Consumer is King’, as these spenders want multichannel access to fashion, ease of buying, technologically advanced bricks-and-mortar experiences, with greater reach of e-commerce and smoother deliveries in both the spaces.
Among the several predicted trends, four stand out as universal favourites that will define how international retail is going to be in 2019, the year of revamped retail strategies, as concepts are now transitioning to tangible ventures and are being adopted in forms that celebrate the confluence of experience, technology and design, at their best.
Experiential Retail: A Definite Hit
As bricks-and-mortar formats are already fighting the rapidly-growing e-commerce segment, retailers are now investing aggressively in the in-store experience to attune to the aspiration of a consumer who is walking into the store, leaving the convenience of his four walls and online shopping. The trend is transforming the entire industry with retail stores having sports arenas, moving racks for clothes, AI-assisted sizing modules, or simply, a place to have coffee while one’s partner shops.
Luxury e-retailer Farfetch was one of the first to have an experiential store as it incorporated connected clothing racks, touch-screen-enhanced mirrors and sign-in stations at the ‘Store of the Future’ event at London’s Design Museum in 2017. Further, Vans’ opened House of Vans in London with its skaters’ ramp, cinema hall and a café while Nike launched its New York store with mini indoor basketball court and changeable shoe racks for multiple trial experience along with a treadmill set and a small soccer enclosure.
This is the fastest growing retail channel in the industry since the inception of online shopping, but instead of competing with the bricks-and-mortar format, it is revitalising itself. The DTC model eliminates middlemen as soon as the product leaves the warehouse, giving the retailer a deeper insight into consumer behaviour and more control over marketing which in turn provides larger profits. This inculcates loyalty from the consumers towards the brand as reduced costs enable brands to invest in marketing that speaks directly to the shoppers.
Nike launched its DTC approach in the form of an interactive app, called the Nike+ app, that gives one-of-a-kind experience to athletes with customisation services for products that can be delivered right on one’s doorstep. Several e-commerce companies forayed into the DTC space journey, such as Bonobos, Everlane and Glossier, equipped with the reach they had through the digital-first format for a holistic omnichannel presence.
A-commerce is the new black, as a consumer yearns for convenience as much as he aspires for quality and what provides it better than automation? On the online front, the biggest trend is the use of virtual assistants and voice search bots, as they enable the shopper to not only search for the right product in right size within the fastest amount of time but to also do so by not even touching a single device. This was first tapped by Target as they partnered with Google to enable shoppers to use their Google Assistant for shopping and then introduced voice-activated exclusive coupons to peak the shoppers’ interest.
Outsourcing backed by artificial intelligence is another trait of this segment as subscription services, one of the features of e-commerce websites, enable the retailer to buy a product for a consumer periodically as per previous sales patterns. This witnessed 15 per cent of global online consumers signing up in 2017, as per McKinsey & Company. On the offline front, Amazon has cleverly unveiled the stores of the future – Amazon Go, a cashier-less venture that allows the customer to walk out without paying at counter with the help of an app that tracks the customer’s activities and bills the customer’s credit card on file once he/she exits.
Small is the New Big
Small format stores are the emerging bricks-and-mortar channel as retailers and brands are now refraining from utilising larger spaces for their outlets. The evergreen battle between fast fashion and sustainability might force the retailers to choose either of the two, but what remains an intersecting element is least-to-zero inventory. Nordstrom’s small format store, Nordstrom Local, remains the biggest instance of this trend, while retailers such as Target, Kohl’s and Sephora are following suit.
Trends might have been revamped in the past year, yet the path to retail success remains stoic. The three-fold mantra that retailers need to abide by as a golden rule for a fruitful 2019 is ‘Provide the consumers diversified product categories under one umbrella, retail those products via multiple channels from online and bricks-and-mortar to social media platforms, all the while maintaining a sustainable and ethical supply chain’.