Retail Revolution: What’s New in 2018
Retail is transforming. Retailers need to reduce costs and increase efficiency in a challenging market where consumer spending is being squeezed and costs are rising. At the same time they need to invest in online, refresh core systems, and develop smarter, personalised offers in addition to rethinking the role of their stores. Retail of all industries, might be one of the most illustrative of being on the front lines of tech disruption.However it’s important to point out, what does “tech disruption” even mean in the version and flavor of 2018? It’s immersion, speed, convenience and automation.
2017 was tough, but there are signs that 2018 could be a better year for consumers as inflation is set to reduce and wages may start to rise. Less of a squeeze on consumers should be good news for retailers, but rising costs will continue to exert pressure on margins and force retailers to focus on cost reduction and operational efficiency even as demand starts to pick up.
2018 could see a further acceleration in store closures as retailers finally get to grips with transforming their real estate portfolios, to be fit for a market where online continues to outperform the rest of the market. The store still has a key role to play, but there will be fewer of them.
They are also facing increasing competition from a number of consumer brands that all want a closer connection with their consumers. There will be more competition for consumers, for the best locations and for the best people as automotive manufacturers and consumer product companies look to develop their presence on the high street and in shopping centres
Top Retail Trends of 2018
We are already in the era in which cars and trucks can parallel park and perform a range of other automated tasks by themselves. Consumer centers have begun planning for autonomous vehicles and fewer parking spaces. It is now common to spot electric vehicle (EV) charging stations in parking lots – that’s just a start.
Retail is also getting embedded into the vehicles themselves. Imagine being able to book a table and place an order for a gift for your date, while you’re driving to pick them up. Or better yet, while your car drives for you.
Machines and Multisensory
There’s a strong chance that machine intelligence will help you make decisions on your next shopping trip. Around 45% of retailers are set to use some type of artificial intelligence (AI) technology between now and 2020. The innovations help retailers on the back end, analyzing data such as video feeds to figure out how many bags shoppers carry as a way to predict store performance.
Big changes also are on the horizon for retail workers, who make up 10% of all workers nationwide. Retailers are rethinking how workers are prepared for customer-facing roles. Macy’s has invested in hiring stylists to help shoppers put together entire wardrobes, and Walmart is providing courses in advanced retail skills at its Walmart Academy sites. So, while digital interactivity is playing a bigger role in the shopper’s experience, customers still want that personal touch from a knowledgeable salesperson.
The momentum around omnichannel shopping is not only answering consumer demands but is also a key driver of sales. Beauty chain Ulta says its omnichannel shoppers spend nearly three times as much as customers who only shop at the brand’s physical locations. In light of those statistics, retailers such as Target are making a big push to promote click-and-collect shopping. I’ll be watching to see how stores reconfigure physical spaces in other creative ways to meet these demands.
So far, 2018 is coinciding with what feels like an entire new era of retail and retail real estate, though brick-and-mortar remains a proven formula. Physical stores capture more than 90 percent of all retail sales. Soon we won’t be talking about omnichannel because it won’t matter where the product is purchased; it will only matter if consumers can get what they want, when they want it.Overall, retailers report energy and enthusiasm for customer focus, yet feel unprepared for effective employee engagement, supply chain optimization, and are constantly feeling pressure from new competitors. The most fabulously conceived consumer experience can be undone without the operations to back it up, and engaged employees to deliver it. Retailers must focus on their employees and continually enhance their operations in order to keep pace with competitors.