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What will be the retail trends in 2019?

By Will Gillingham

If you were to pave the course of online retail in 2018, the resultant path would look less like a Roman Road and more like the Nufenen Pass; a trail ricocheting back and forth between the Beast from the East, a scorching summer, a royal wedding and the World Cup. Only in the final stretch would the road mellow into a sober straight line: one pointing forebodingly downhill to reflect this year’s underwhelming peak.

Springing up beside the route like so many milestones would be the trends of 2018: such things as a lean into Instagram-era commerce, cashier-less shops, and a widening environmental debate on the repercussions of fast fashion.

But that was last year’s story. 2019 has only just begun, and those events which might influence the rises and falls of the year have yet to surface. However, that’s not to say some healthy speculation can’t be entertained. So, what are the likely retail trends of 2019? We approached our community for their expert insight.

The Environment Will be in the Foreground

Global Warming. Plastic Oceans. These are household terms and worldwide concerns, and yet comparatively little has been done to stem the damage we’re causing to the planet. That is, until now.

2019 is pointing towards being the year that people collectively roll their sleeves up, knuckle down, and make strides in preservation: as reported by the Guardian last September, the environment is now more important to customers than price.

But the issue isn’t only being tackled on the consumer-end of things. As noted by Jean-Yves Simon, VP Product, AB Tasty: ‘Environmental concerns will come to the fore as this issue takes centre stage on the political scene. The conversation will then filter down.’ It’s a two-pronged attack, coming from both the influencers (I’ll take this opportunity to gift you the dulcet tones of Attenborough), but also the so-called influenced.

It’s a collective aim, and one which everyone seems to be striving for. The thought that 2019 could do anything but have a positive impact on the environment seems counterintuitive.

Trees in a bubble

On the retail side of things, three separate perspectives are offered.

As mentioned by Elise Karamujic, CMO, Proximis: ‘Consumers are more and more concerned by the environment and expect their favourite brands to be demonstrating concrete actions. Fast fashion is obviously challenged. H&M already launched operations to give another life to their products through recycling them. In cosmetics, L'occitane understood that and opened a new experiential store in the Fifth Avenue in NYC where consumers are incentivised when they recycle products.’

Amy Jenkinson, Marketing Manager, Woodway, references the way in which packaging is likely to be refined: ‘Sustainability is still going to be a key area for retail, especially in ecommerce where packaging will continue to be under the spotlight. This will require the balancing of over-packaging and material use with ensuring products are not damaged in transit. Retailers will need to think about what their sustainability message is to consumers and ensure this is reflected in the packaging they use. With this in mind, 2019 could start to see reduce, reuse, recycle and repair become increasingly applied to the products sold, not just the packaging they are in. Fast fashion has already come under government scrutiny and more recently white goods to be manufactured to last longer and be easy to repair.’

Finally, Mention Me conducted a survey at the end of 2018 looking at what customers value. Andy Cockburn, Co-Founder and CEO, Mention Me, outlines the results: ‘We are becoming more conscious consumers, less willing to engage with brands who do not fulfil ethical codes of conduct. Brands such as Iceland recognised this quickly and staged an advertising coup with Greenpeace, and their Christmas campaign was designed to raise awareness of the use of palm oil. Our research revealed that in 2019 this change in consumer mindset will have an impact on the types of brands that we would be happy to refer to friends or family. Of those questioned, consumers are more likely to refer a brand if they paid their workers a fair wage; were committed to working with local suppliers and hiring from the local community and were committed to scrapping the use of plastics and environmental concerns.’

From all corners, the environment is being championed. Expect retailers to be making ethically-conscious decisions throughout the year.

Man looking at a lake

Social Commerce Will Step Further into the Limelight

Shopping on social media is fast becoming the norm, and its acceleration is unlikely to slow anytime soon. With recent enhancements allowing customers to purchase as they scroll (without being redirected to the retailer’s website), instant-buying is easier than it ever has been, and appeals to a generation native to social media and a high-speed economy.

Nenad Cetkovic, COO, Lengow, highlights social media as being of vital interest to retailers in 2019: ‘Social networks are becoming more and more important for ecommerce. They are an essential way to connect supply and demand. Conscious of this growing demand, social media platforms are constantly improving their service. The challenge is for them to follow in the steps of the Wechat (Tencent) messaging application in China, to offer their users a multitude of services (such as online shopping) to keep them connected to their platform as long as possible.’

Further to Cetkovic’s statement, Jimmy McCann, Head of Digital Strategy, Search Laboratory, identifies the precise way in which social commerce is circumventing traditional methods of buying.

He says: ‘Consumers are already using social media to research products before buying, but they face several points of friction between finding a product on social media, to purchasing via the website. Utilising social shopping features, such as Instagram’s story links, creates a single streamlined buying process within the app, removing any friction and reducing customer drop-off. Social commerce also targets customers at all stages of the buying funnel, from research through to purchase. Followers actively researching products on these channels may also be more likely to buy in-store, and brands can capitalise on this via targeted advertising, even offering discounts via ads when a follower is close to a physical shop.’

As more and more young people become financially independent, a boost to social commerce is to be expected. With leading platforms refining how to shop on social media throughout 2018, they’re now firmly viable purchasing channels. It’s more than likely that followers of these sites will make the most of the capability in 2019.

Social media apps

The Twilight of Cash and Card?

As technology progresses, traditional methods of doing things suddenly find themselves outdated and tipping towards obsolete. Payment methods are on the line this year, particularly cash and card. Contactless payments overtook other forms of purchasing last year, and with the ability to now keep all your various cards in one place (i.e. a phone), the norm of walking around with a pocket full of coins and plastic may soon be a thing of the past.

As Matthew Foo of AsiaPay explains: ‘Various alternative payment methods such as cryptocurrencies and e-wallets are becoming popular among consumers. Cash and card payments are unlikely to be the only choice for consumers anymore. Furthermore, the high penetration of the internet and an ever-increasing smartphone ownership are leading to the changing of consumers’ purchasing behaviour.’

Lisette Huyskamp, Head of EMEA Marketing, Optimizely, builds on Foo’s thoughts, concentrating on the opportunities which mobile provides. She says: ‘In 2019, consumers will demand that retailers provide a spectacular experience on mobile. As a result, this year will see retailers pioneer more features and services than ever before on the channel. In fact, 29 billion global app downloads were made on iOS and Google Play in Q3 of 2018, making it the largest quarter ever, up 10% year-over-year. This figure is a clear sign that mobile will continue to be a dominant channel for consumers and, as a result, retailers too.’

And Malcolm Berg, UK Sales Director, SVS, discusses the uses of another alternative payment method: the gift card.

He says: The provisioning of a card into an e-wallet or app brings a host of functionality and data that has previously not been available for gift cards. Retailers now have the opportunity to push balances and provide marketing communications such as: "we noticed you have £25 left on your gift card and thought you might like to know our sale ends on Friday”. In retailer apps, this now can be a valuable customer data source, previously unavailable with gift cards. Such rich market intelligence and loyalty-building potential could prove to be a real game changer for retailers in 2019.’

The derestricting of payment methods goes hand in hand with another theme likely to truly emerge as a core theme of 2019 (after small inroads were made in 2018): frictionless commerce.

Cash and card

Frictionless Commerce

A world in which grinding through multiple checkout pages (see this IMRG report on checkout abandonment for the optimum way for structuring that), or inputting reams of delivery information, or typing in card details is all abolished? It sounds fanciful, and yet it’s the target which the ecommerce arrow is determinedly aimed towards.

Not only that, but it seems that 2019 could be a year where elements of the ‘frictionless purchase’ come into play.

Padraig Slattery, VP Retail, SafeCharge, explains: ‘The retail industry has gone through a huge transformation in the past years, and this is set to continue in 2019. While retail trends will inevitably be defined by the technologies that change the way consumers interact with brands, two aspects of the customer experience will remain the same: speed and efficiency. The rise of ecommerce and same-day shipping has created consumers that prefer a seamless shopping experience: quick and convenient delivery, rather than a clunky purchasing journey for items at discount rates.

‘As distributed commerce and mobile shopping continue to fuel the on-demand economy, retailers can be expected to match the heightened expectations of these tech-savvy shoppers and provide a frictionless experience from start (product search) to finish (product purchase).’

Phone

One of the outcomes of the streamlining of the industry could be an onrush of buy-now-pay-later options. As McCann of Search Laboratory explains: ‘Last year saw the rise of Buy Now, Pay Later at online checkouts following Klarna’s UK launch in 2017. With over 25,000 new sign ups each week, it’s clear that consumers are enjoying this new type of flexible credit, and we will see more retailers adopt Buy Now, Pay Later policies in 2019 to capitalise on this type of spend. However, flexible credit schemes can increase the number of goods consumers are buying, and therefore increase the likelihood of returns as consumers buy items ‘risk free’ knowing they can easily send items back.’

And if online represents a more efficient mode of purchase, then shops will have to mutate in order to stay relevant.

This is noted by Karamujic of Proximis: ‘Shops will tend to become frictionless as mobile POS means consumers don’t need to visit the store and wait in line to pay. The more consumers who are satisfied knowing they can quickly order online and click & collect through unified commerce possibilities, the more stores could be cashless.’

On the other hand, shops could stay relevant by merging the online and offline offerings. Cetkovic of Lengow: ‘Consumers are no longer distinguishing between online and offline shopping experiences. The digitisation of physical points of sale is therefore an important issue, as retailers must offer a single coherent sales experience (offline and online). This is the only way to expand the accessibility of the offerings and avoid missed sales opportunities.’

No matter the trend in question, there’s one object that all these refinements revolve around, and which, perhaps now more than ever, is going to be central to all business decisions in 2019: the customer.

Digitalisation

More Customer-Centric Than Ever Before

Let me expand that last paragraph: of course retail decisions revolve around the customer. Brands simply wouldn’t survive if the customer wasn’t front and centre in their strategy. But what is being argued for 2019 is that the customer will take first place.

It’s best explained by Julia Henry, Post-Purchase Manager, parcelLab: ‘An important trend that will emerge this year among the smarter online retailers is a shift towards focusing more on the consumer and what they want from the ecommerce experience.

‘Customer-centricity will be vital, because as online retail competition continues to increase, it’s those e-tailers that can deliver the best shopper experience that will not only stand out, but also retain more customers and encourage repeat business through engendering trust and loyalty. What’s more, they’ll also gain new business as happy online shoppers will tell their friends, which will also boost an online retailer’s reputation, another vital weapon against their rivals in a crowded market. This year will not be about price, or technology, but about the customer.’

Shaking hands

Bated Breath

Let me draw you back to the retail roadmap. The trend markers for 2019 are in place: environmentalism, social commerce, the adoption of new payment methods, and a shift in how the high street operates. But the road itself has yet to be trodden.

There are a few looming monoliths in the calendar: an ambiguous Brexit deal and the full activation of PSD2 to name just a couple. And, of course, in true British fashion, the weather is sure to have a firm impact on how we go about our daily lives, including the items we choose to purchase.

What will truly happen in retail this year? Nobody knows for certain. All there is to do is wait and find out.

Will Gillingham, Content Executive, IMRG

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