Top Predictions For Retail in 2019 [From Leading Industry Experts]
This year, customers shopped online more than ever before and the competition for consumer spend hit a fever pitch, with major retailers such as Amazon, Walmart, and Target all offering free holiday shipping.
(For those of us who remember) not long ago free and fast shipping was just an option for retailers. Now, it is the standard in retail.
So, what’s next?
This year, we’re asking leading industry experts which trends they predict will shape the retail industry in 2019.
We collected predictions from our own experts at CPC Strategy as well as ecommerce professionals across leading brands, industry publications, technology, services, and more.
Meet the Experts: The 2019 Retail Roundtable
- Tien Nguyen, VP Tech, CPC Strategy
- Daquent Robinson, Director, ETAIL, The Honest Company
- Greg Chapman, SVP Business Development, Avalara
- Ray Hartjen, Marketing Director at RetailNext
- Jenn Berg, Director of Growth, Drip
- Devin Fitzpatrick, Founder & CEO, CDF Consulting
- Ani Collum, Principal, Trade Collective
- Nikki Baird, VP Retail Innovation, Aptos
- Cate Trotter, Head of Trends, Insider Trends
- Nii A. Ahene, COO, CPC Strategy
- Shelley E. Kohan, Fashion Institute of Technology
- Pamela Hemzi, VP of Ecommerce and Digital at Laura Geller
Retail Trends Predicted to Shape 2019:
Without any further delay, let’s dive in!
1. Merging of Online & Offline Markets
In 2019, we’ll continue to see marketplaces and traditional retailers converge. It’s happening both ways, where marketplaces like Amazon are moving to forms of traditional retail, and traditional retailers like Albertsons are making the move to marketplaces to stay relevant in the digital economy.
This creates complexity for businesses and governments alike – especially when it comes to how marketplaces are taxed. By 2020 every U.S. state will have a law forcing marketplaces to collect sales tax in that state – whether they have a physical presence or sell remotely.
– Greg Chapman, SVP Business Development, Avalara
The offline and online worlds continue to merge with Walmart continuing to expand their online purchase and create a partnership/acquisition of a major online retailer while Amazon does the same with a major offline retailer (such as Best Buy or Target).
– Tien Nguyen, VP Tech, CPC Strategy
2. Goodbye “Omnichannel”, Hello “Omnipresence”
In 2019, retailers will stop talking to themselves what with all the omnichannel nonsense and instead look to ways to continuously engage with shoppers as they pursue their shopping journeys – to be omnipresent.
Consumers simply don’t think in terms of channels. This isn’t 1998. No one is sitting around and thinking, ‘Hey, I think I’ll do some online shopping.’ For many years, and certainly, in 2019, it’s all just ‘shopping.’
Shopping journeys now go through a variety of branded touchpoints, digital for sure, but physical touchpoints too, and they are nowhere near linear shopping journeys. Brands need to be nimble, agile and responsive to shopper needs, and they need to deliver seamless, friction-free paths for their shoppers to navigate.
At the end of the day, it doesn’t matter where the transaction takes place, as long as the transaction takes place within the brand’s ecosystem. It’s a holistic approach to the retail experience, and it’s something retailers, particularly old-school, legacy retailers have learned the hard way.
– Ray Hartjen, Marketing Director at RetailNext
3. The “Department Store” Replaced By Marketplaces
Marketplaces will continue to be the new “department store.” 2018 saw the death of the beloved Toys R Us. Sears and JCPenny are having their fair share of struggles as well, despite once being successful forces in retail.
Marketplaces are continuing to thrive. In 2019, we will continue to see marketplaces take over as top revenue drivers in retail versus the traditional department store.
Even though some retailers like Walmart or Target are working to innovate beyond their traditional business models, this won’t be enough to save most department stores from slight (or in some cases, rapid) decline.
– Greg Chapman, SVP Business Development, Avalara
4. Machine Learning Drives User Experience
I predict 2019 to be the year where machine learning drives all on-site user experience for e-retail.
Next year I anticipate most sites to be hyper-personalized in the way Facebook is, serving up a unique experience for each and every user.
Online retail will be smart enough to only show me products specific to the many data points collected to my profile.
– Jenn Berg, Director of Growth, Drip
Consumer data across all enterprise systems and touch points will be imperative in 2019, as retailers must focus on the importance of the customer’s entire journey.
Last year I predicted how AI would be the main focus for retailer’s websites and while it did come true, the data from these AI programs are not unified or actionable. Usually the AI customer data is only effective and maintained within that exact AI program.
In 2019, retailers must invest in technology that unifies the entire customer journey to enable a 360-degree view of the customer and their shopping behavior. Retailers need to act on the entire view of the customer to compete in an ever-growing D2C environment online.
Consumer engagement is entering a new level in 2019 and will only be possible by investing in complex data software and exploring ways to collect and leverage data in their sales, CSR, and marketing.
– Devin Fitzpatrick, Founder & CEO, CDF Consulting
5. Small Store Mentality & Pop-Ups Target Key Markets
As retail footprints continue to shrink, dollars per square foot industry-wide will significantly increase as D2C retailers begin to more aggressively expand their offline presence, utilizing a small store mentality to penetrate key markets.
As many D2C retailers now have a few years under their belts of offline exploration via pop-ups and/or initial prototype stores, they are realizing that they can actually do more with less.
By creating a showroom, NON cash-and-carry experience (which inherently requires less inventory investment to fill a store) and a more intimate environment which allows for a more specialized team of higher quality, higher paid staff, we’ll begin to see productivity for some of these key players hover in the thousands of dollars per square feet, as opposed to the typical hundreds of dollars/square feet that many traditional retailers experience.
– Ani Collum, Principal, Trade Collective
In 2019, a great many brands will expand their physical footprints – either pop-ups or permanent stores – in an effort to expose the brand to new geographic markets and educate consumers on the brand’s value proposition.
Sometimes the store will sell, and sometimes it won’t. But, at the end of the day, it won’t matter.
It’s the holistic view of the enterprise that will matter. If the digital native retailer can increase its online sales 5x in the ZIP codes surrounding a new physical store within six months of its opening, then it could very well be a successful store launch, even if the store transacts very little itself.
– Ray Hartjen, Marketing Director at RetailNext
Pop-ups and “storefront as a service” will continue to play an important role in retail. I believe this is part of a larger trend of “taking retail to the consumer”, which will be more visible in 2019.
Rather than trying to force shopper journeys that lead to a store, retailers will focus new efforts on creating shopper journeys that meet consumers at the moment, whether that is the moment they realize they have a need or are in the moment of a lifestyle experience that is perfectly enhanced by the retailer’s brand.
Thus we see pop-up stores at music festivals and county fairs, and curated stores/experiences where brands are invited in because of commonality of purpose – helping end violence against women or curing cancer, for example.
– Nikki Baird, VP Retail Innovation, Aptos
6. Make Way for Preemptive Distribution
A key trend in the retail landscape which is finally coming to fruition in a major way for 2019 is preemptive distribution. Retailers that have outpaced and outperformed their peers have exercised value precision and preemptive behavior consistently, time and time again; known as the 3P Distribution Model.
Precision begins by delivering consistent value to the target market. Starting with precisely positioning the products to a keenly identified target market and ending with delivering the products and services to the customer when, where and how they want it.
Top companies are preemptive in their business strategies staying ahead of the competition through unwavering branding and creative innovations. The key differentiator among competitors, however, is executing both precision and preemptive behavior over time, consistently.
Preemptive distribution is being precisely where the consumer is at the right time, in the right channel with the right product and ahead of the competition. In Robin Lewis’s book, The New Rules of Retail (2014), he coined the phrase preemptive distribution and explained it in detail.
He wrote that in an over-saturated marketplace where consumers have unlimited and instantaneous access to hundreds of equally compelling products, that to win a consumer requires preemptive distribution: getting to precisely the right consumer, when, where and how they want it, and perpetually, ahead of the hundreds of equally compelling competitors.
Over the past few years, retailers have been spending time, money and resources on building out the infrastructure and capabilities to best support a preemptive distribution model.
In the next three years, the 3P Distribution Model will move from theory to practice across a broad base of retailers and brands allowing for better alignment with the minds of the consumer and ultimately win in delivering on their high expectations
– Shelley E. Kohan, Fashion Institute of Technology
7. Retail Tech Takes Off
2019 will be the year where we see retail tech as a service take off. There are a large number of companies who have tried and tested their own tech and are now licensing it out as a platform. What’s more, we’re seeing this throughout all parts of the industry.
We’ve got Ocado licensing out its automated warehouse content, IBM licensing its Food Trust blockchain tracking system, Vita Mojo with its software for personalization of food. Farmstead’s FreshAI can help food businesses reduce waste. b8ta is offering up a back-end analytics solution.
Uppercase has a complete solution for opening a physical store. Westfield created OneMarket as an accessible retail tech network. This is just the tip of the iceberg.
We’d also expect companies like Farfetch to move in this direction in the future. This trend is likely to be a gamechanger for retailers. Instead of trying to cobble together bits and pieces of tech on their own, they can license something cutting edge that works out of the box to deliver real operational benefits.
– Cate Trotter, Head of Trends, Insider Trends
8. Amazon Makes Big Play for Beauty & CBD Products
Amazon makes a big play in the beauty industry. They are the #1 online retailer for beauty products but haven’t made any big news with either acquisitions or new brands, like they have in fashion, home goods or food. My future prediction: Amazon will roll out a robust loyalty program.
– Pamela Hemzi, VP of Ecommerce and Digital at Laura Geller
My prediction is that Amazon starts to dabble into the CBD and cannabis industries. With the CBD market predicted to be a $1B industry within the next 5 years, I’m predicting Amazon will begin to develop Amazon exclusive CBD brands to sell on its platforms.
Amazon is known to go after growing industries and I think CBD is no exception as consumers nationwide are starting to warm up to the idea of cannabidiol-derived products in mainstream places.
I even think it’s possible in 2019 for Amazon to begin investing or buying a cannabis delivery startup to begin disrupting the marketplace within the states that have already passed cannabis legalization.
– Daquent Robinson, Director, ETAIL, The Honest Company
9. Instagram & Facebook: Acquisition & Ad Growth
The ever-growing Instagram advertising platform will grow and allow product purchases directly within the app through Instagram Story and traditional ad placements. Instagram ads will have the ability to serve those towards the bottom of the funnel in the ecommerce cycle rather than serve as discovery ads.
– Tien Nguyen, VP Tech, CPC Strategy
Facebook acquires Offer-Up to solidify its position as the local commerce marketplace of choice for Gen X and Gen Z.
– Nii A. Ahene, COO, CPC Strategy
About OfferUp: Launched in 2011 by Nick Huzar, former co-founder and CTO of Konnects, Inc., and Arean van Veelen, OfferUp is a mobile-driven local marketplace that competes with companies such as eBay, Craigslist and Facebook Marketplace.
Want to share your 2019 Retail Predictions with us? Please comment below!
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