During the past year, the retail industry grew at a steady 4% rate, adding more than 1 million new brick-and-mortar stores. Amazon continues to gain market share, but online sales only make up 10% of all retail sales. Plus, the job market is really tight, so employee retention has become a necessity. Retail trends for 2020 will be focused on beating the competition through value and operational excellence.
Trends by Category
There are a lot of things affecting the retail industry, which makes it difficult for a small retailer to keep up. The retail industry seems to always be in flux. There’s also the political and economic landscape that are out of our control, which leaves us looking at how we can connect better with our customers.
For 2020, retail will be heavily influenced by the following categories:
- Technology
- Consumers
- Inventory
Each one is transforming the marketplace to save retailers time and money. Here’s a good look at each one in detail.
Technology
Innovation in retail technology continues to change the industry and disrupt traditional business models. It has transformed shopping into a more convenient and pleasant experience for the consumer. Much of this is due to data capture and analytics. Retailers now have the ability to know what customers want and when they want it. That is critical for seasonal peaks and valleys.
Technology has advanced consumers’ preferred channels of communication: messaging and text. To meet this need, text marketing and customer chatbots have become more relevant than ever. Both tools provide the direct digital access people want and on their terms. These aren’t new but have been elusive for smaller retailers to adopt. Smaller retailers will take advantage of these inexpensive and easy to implement tools, so they can interact more with their customers.
From smart refrigerators to wearable technology, more retailers will be offering products that connect directly to the internet. Also called the Internet of Things (IoT), this technology delivers experiences customers want to make their life easier.
Consumers
Two of the biggest concerns for consumers in the coming year are battery life and WiFi. Older products may be cheaper, but they also have shorter battery life. Staying on top of this trend will align stock with demand. They also want WiFi wherever they go. In-store WiFi saves them from data overages and makes their shopping experience more complete.
If consumers don’t find exactly what they’re looking for, they just move right along. It’s imperative that retailers connect with them during these micro-moments. What can motivate them the most during these moments? A story. Retailers will be investing more in ways to tell their story to everyone because brand narratives build a powerful emotional connection with customers.
Inventory
Gaining a competitive advantage will come from better forecasting and more agility within the supply chain. Both rely heavily upon automation and strategy.
Forecasting begins with a robust point of sale that gathers the right data in real-time, so decisions can be made quickly. Retailers can grow their gross margin through product selection and pricing that fits their customers’ needs.
For retailers with multiple stores, a unified distribution center brings together the network of physical stores into a centralized location. This cuts down on the need for large retail spaces and improves product fulfillment.
Welcome to the ‘20s!
The last decade saw dramatic changes within the retail industry. So what will retail look like in 2020? People are choosing brands that focus on convenience and sustainability. This is especially true for millennials who want their favorite brands to care for the environment as much as they do.
These trends have become best practices in retail, of which innovations in technology have been at the heart of implementing them. And, innovation will shape the customer experience and retail operations for the decade to come.