The retail industry had a phenomenal year. Retail has an exciting future. The doom-and-gloom reporting of the “death of retail” has subsided.
The retail apocalypse is officially over.
The evolution of retail is not.
In 2017, over 7,000 retail locations closed. Less than half that number occurred in 2018.
In 2018, retailers focused more on customer experience and innovation…and won.
Here are some of my 2019 retail predictions:
1. The rebirth and rebuilding of brands. We will see some retailers resurrect. Brands that closed or filed for bankruptcy several years ago, will resurface with a focus on smaller footprint stores and customer experience. Additionally, we will see the rebuilding of brands with new store layouts and new offerings.
We may also see the demise of some other giants and hope one day they are reborn as well. Look for the new and improved Toys “R” Us and Circuit City in 2019. There may be some big things coming for Lowe’s in 2019 as they tackle the professional construction market.
2. Brick and mortar is back. What some would call the biggest comeback ever is more of looking at it from a different perspective. People are shopping in stores again. Retailers need to adopt the unified commerce approach: if a customer is buying from the business, the channel doesn’t matter.
Smaller footprint stores are abuzz. Grocery and c-stores now move toward more self service with pay and go, self-checkout 2.0, and cashierless stores. Some online brands will open brick-and-mortar stores (The RealReal and UNTUCKit). Destination-based shopping will see more shared or combined spaces. Restaurants, coffee shops, and lounges will be peppered into traditional retail establishments (such as Target concept stores, Starbucks, and Nordstrom’s small footprint). As customers look for different experiences, this will continue to be the key to success for most businesses.
3. The elephant in the room. Amazon continues to grow and gain market share. Retailers will need to build their 2019 strategy around a competitive advantage. Amazon’s Alexa AI will move to more third-party applications supporting retail in 2019. Retailers need to avoid becoming distracted by Amazon and focus on the customer experience.
Location and easy returns are a real problem for Amazon. Also, scalability related to service plagues Amazon. It is discouraged to force innovation. Instead, one should use innovation to help support one’s customers experience.
4. Social media and retail get married. Social selling will be a real thing in 2019. Social commerce will potentially be the most disruptive thing in retail in 2019. Facebook will hit retail big in 2019 with its reach and data. As some leave Amazon, Facebook and Instagram will fill in the void.
5. Some big Amazon acquisitions are coming. We may see the company buy a large retailer with a network of stores. Amazon will also partner or acquire a social network to battle Facebook and Instagram on the social commerce wave.
6. The Internet of things will grow. Technology interaction in the stores will drive customer experience. Think of a more immersive shopping experience, with augmented reality and more interactive smartphone apps. The retailers themselves will also adopt at a higher rate as well as more wearables for instore associates, drones, and wider adoption of virtual reality.
2018 was the death of the retail apocalypse. Be ready for the social commerce’s disruptive wave. Retail will continue to evolve. Technology is not here to eliminate us; it’s here to make our jobs and lives easier. Focus all your programs on the customer experience and customers will shop. 2019 will be a great year for retail. Happy New Year.
Tom’s column regularly appears on every issue of LP Magazine. To subscribe to the printed version of the magazine and enjoy other great content visit losspreventionmedia.com