Retail is changing at an unprecedented speed, and with it come big challenges and opportunities. 2019 had the slowest rate of spending growth since 2010, largely driven by Brexit uncertainty. The industry faced large-scale business restructuring: 85,000 jobs lost, a third of FTSE 350 CEOs changing, and 9,169 store closures. Despite this, online sales continued to grow, reaching 21% of total sales. There was also a rise in activism, largely driven by millennials and Gen Z who are demanding their voices be heard. These factors combined are going to have a huge impact on the consumer world, in powerful new retail trends, not just for the next year but for the decade ahead.
In a recent article Deloitte (2020) sees three major developments and trends shaping the retail industry:
Sustainability paradigm shift
- The retail industry is a major contributor to global carbon emissions, and retailers have a big role to play. Although there is a big moral aspect to this, there is also a significant business opportunity. Some retailers have sustainability on their agenda, but those who don’t prioritise it now are at risk of not surviving the next 5-10 years.
- The growing circular economy: Consumers are becoming more mindful of what happens to products when they are finished using them.
- Increasingly transparent supply chains: Retailers are having to respond by understanding more about their supply chains and making them more transparent for consumers.
The re-invention of retail
- Customers expect unique experiences, both in store and online. Whether that be through curated marketplaces, connected spaces or digital journeys, customers are wanting to have an emotional connection to their shopping experience.
- Growth of marketplaces: The proliferation of choice is leading to more consumers looking to marketplaces to provide curated experiences that no single retailer can offer.
- New digital experiences: Digital is playing an increasingly important and creative role in the customer experience.
- 5G is coming… it will fuel the growth of connected space and immersive experiences.
Purpose is the new digital
- An authentic purpose is now as important as digital to the next generation of customers. Brands that have a cause have more meaning in the eyes of consumers. As retailers start putting purpose at the core of their business, they will have to rethink what they stand for and define the commercial model required to deliver it.
- Conscious consumption: While the sustainable retail trend will continue to develop as detailed above…social, ethical and community purpose will also emerge in 2020.
- Inclusion is a business opportunity: The move from exclusive to inclusive makes good business sense.
As your business takes more leaps of faith into these new areas, Retail productivity experts SWL are perfectly experienced, and knowledgable, in these new trends, innovations and initiatives. Call us today on 01527 895020 to arrange a discussion on how you can successfully balance your sustainability, multi-channel customer experience and purpose.