By Joshua Stanphill, ISV business development manager – strategic accounts, Epson America
Featuring Nicola Fahy, marketing manager, Vend
Here are the top three trends happening in retail this year and our predictions for what’s going to be big next year.
As 2018 is coming to a close, it’s a good time to reflect on some of the top IT trends that impacted retailers this year and consider what’s ahead for 2019. I spoke with retail management platform Vend for their insights on the biggest changes they're seeing in retail right now and beyond.
- “Chore” Shopping is Becoming Easier. When it comes to shopping, there are basically two categories: Chore - the commodities we buy over and over such as paper towels, toilet paper, and groceries, and cherish, which are the special purchases we look forward to. The first category is something many of us want to make easier, and that’s exactly where retailers like Amazon shine with their subscription-based offerings, auto renewals, one-tap purchasing and fast shipping.
Amazon isn’t the only retailer making chore shopping easier: Wal-Mart, Target, CVS, Best Buy, Office Depot and OfficeMax, Staples, Macy’s, FTD, Godiva and several grocery chains are following suit. Third-party companies like Instacart are playing a key role in the same-day delivery trend, supporting merchants like Whole Foods, Costco, BJ’s Wholesale Club, Petco and Publix with fast fulfillment.
- “Cherish” Shopping is on the Rise, Too. With so many department stores leaving malls and some going out of business altogether, some may think that brick-and-mortar retail is going away. But the exact opposite is actually happening. According to research from the IHL Group, over 4,000 more stores opened than closed among big chains in 2017. “Traditional store formats may be on the decline, but innovative stores — ones that offer great shopping experiences — will continue to emerge,” says Sanford Stein, author of RETAIL SCHMETAIL and founder and moderator of RETAIL SPEAK.
Per the IHL Group study, for each company closing a store, 2.7 companies are opening stores. Nicola Fahy, marketing manager at Vend, says she’s seen this trend play out in several ways over the past year, especially in the artisan community. “One example that comes to mind is Limbo Jewelry, a boutique retailer that started as a pop-up shop in Austin’s SoCo shopping district in 2003 and now has a storefront in SoCo and one in North Austin. The merchant, which is owned and operated by a husband-and-wife team, not only offers a unique variety of jewelry, but they bring in a lipstick bar for patrons to experience during the holiday season. The merchant also sells other merchandise that’s made in Austin, such as pottery, t-shirts and art prints which adds to the customer shopping experience.”
Shinola is another example of a boutique retailer that’s carved out a lucrative niche selling items such as wristwatches, leather bags and belts, bikes, iPhone cases, pocket knives, and varsity jackets. “Not only do they offer customized products that are made in Detroit; they offer an in-store experience that’s much different from a typical department store,” says Fahy. “In just seven years, the retailer has expanded to 34 stores and a few big-name retailers like Neiman Marcus and Bloomingdale’s are reselling its products.”
- Smart Retailers Listen to their Data. In the digital age, we’re all inundated with information. But savvy retailers are using the latest data analytics solutions to turn this deluge of data into actionable information. A case in point is Singapore fish merchant Dish the Fish, owned by Jeffrey Tan. When he started the company in 2015, he purchased iPads along with an iOS-compatible cloud-based point of sale (POS) solution from Vend.
When a customer makes a purchase, Tan selects the item from a dropdown menu on the iPad and multiplies the price-per-pound by the weight. In addition to being able to quickly see his sales at the end of each day, the app provides him with lots of other useful data points such as the top selling fish, how quickly a particular fish sells out each day, and it gives him customer profile insights. Tan admits that the software sometimes reveals surprising insights about customers’ preferences. “I used to order a lot of the ikan kuning [fish] when I’m at the port, because I thought it sold really quickly,” he says, referring to an inexpensive fish. When he reviewed the hourly data, however, he was surprised to find that the leather jacket, which was a slightly pricier fish, sold out faster.
What’s in Store for Retailers in 2019?
In Vend’s 2019 Retail Trends and Predictions report, they see many of the 2018 trends continuing as well as several new trends emerging. Here are a few highlights from their report:
- Small Format Stores Growing. Directly related to the “cherish” shopping experience mentioned earlier, Fahy predicts small-format stores and other niche concept stores will become more common. “We’re already seeing glimpses of this trend with brands like Nike, which launched pop-up shops in New York City, Chicago, Los Angeles and Toronto for its annual Air Max Day,” says Fahy. “The locations showcase Air Max models from the previous three decades and give Nike enthusiasts a sneak peek into what’s next. Similarly, Nike launched a concept store on Melrose Avenue in Los Angeles that uses its mobile app to engage with customers and allow them to reserve products for pick up at smart lockers, shop Nike products in-store from their phones, scan barcodes to learn more about specific items, and earn rewards. Members can also use the app to purchase items at the store’s digital vending machine, text questions or arrange curbside pickups with store associates.”
Nordstrom is another company that’s embracing the concept store model with its Nordstrom Local stores, which are small-footprint, inventory-free retail hubs that excel in experience rather than racks and racks of clothes. “The concept stores feature customer service reps who consult with customers and help them pick out a new wardrobe, size a suit, or they can visit an on-site seamstress who can make alterations to an outfit,” says Fahy. “While they’re waiting to meet with a customer service rep, customers can enjoy a manicure or pedicure along with a glass of wine, beer or gourmet juice.”
- More Collaboration Between Manufacturers and Brands. One of the things that’s made traditional brick-and-mortar retail feel so stale is the disconnect between the retailer and the manufacturer. If you’ve ever asked a store associate at a big box retailer about a product — either before or after making a purchase — you can most likely relate to this example. But, thanks to retail as a service companies like B8ta (pronounced “beta”) the disconnect is disappearing. B8ta incorporates sensors and tools in its stores, which enable it to monitor product performance. The company shares data, such as foot traffic, with product makers through an online dashboard, provides them with key data points such as how the product is performing at other locations, and enables them to adjust their showroom settings in real time. If a display was performing below average at a location, the manufacturer could consider changing the location or look of the display – or training retail associates. Lowe’s is incorporating B8ta’s technology services in 70+ stores to provide customers with a test lab experience within its stores for customers evaluating security systems and other smart home products. Macy’s is also now partnering with B8ta to enhance and expand its experiential-based retail concept The Market @ Macy’s.
- Retailers will Need to Invest More in their Workforce. According to the latest research from NRF, the retail labor market is tighter and much more competitive than ever before. At the same time, the role of retail associates is evolving from “salesperson” to consultant. While new technologies play a vital role in the in-store customer experience, customers oftentimes need the guidance of a human expert to help them with their purchase decisions. “In 2019, efforts focused on customer personalization will include the professional development of retail employees,” says Chris Guillot, founder of Merchant Method. “Employee development is an effective and profitable complement to data-focused initiatives. Yet training on customer empathy, genuine engagement, and emotional intelligence are areas that haven’t been updated or taught enough.”
She adds that, “Customer needs are dynamic and in order to meet those changing needs, retailers need engaging employees at all levels of the organization, especially in the field and on the sales floor.”
Final Thoughts: The Only Constant is Change
If you look at all the key trends happening within retail right now, they can all be summed up in one word: adaptation. The retailers that have stumbled and either closed some or all of their stores in recent years were the ones who were unwilling or unable to adapt to their customers’ changing needs. While it’s impossible to predict the exact future of retail, there is a group of people who have that information for your company and they’re willing to share it if you’re willing to listen — your customers.