3 Dec 2019, 13:49 — 6 min read
Background: At the start of the year, experts often share their predictions for industry trends in the upcoming year. Here is a candid and on point assessment of the retail landscape by an industry expert.
In January, I went out on a limb with my predictions for retail in 2019. So how are things looking so far?
The retail apocalypse narrative continues to be part of the Zeitgeist, and it looks like we could see a record number of store closings (in the US) this year. Yet, thousands of stores will open, dozens of primarily brick and mortar retailers with remarkable business models are killing it. Physical retail will still show positive growth, while accounting for more incremental growth than e-commerce. I guess it’s a matter of perspective. And my perspective continues to be physical retail isn’t dead; boring retail is.
I wrote about how it’s “death in the middle” in 2011 and started writing and speaking about retail’s great bifurcation in 2015. When we look at the retailers that are closing vast amounts of stores or going away completely, most often, they’ve gotten stuck in the mediocre middle. We’ll see more of the same the balance of the year.
Walmart, Target and a host of other traditional retailers that were starting to see their stores as assets, instead of liabilities posted materially improved results. We continue to witness many more retailers roll-out of buy online pick up in-store (BOPIS), curbside pick-up, accelerated delivery times and other attempts to neutralize Amazon. The big issue now is avoiding a race to the bottom.
Isn’t ironic? Just about every day it seems that another disruptive brand announces a store opening. Investor money is piling into concepts like Neighborhood Goods to help digitally - native brands get into physical retail, despite the prior insistence that stores were dead. And DNVB founders keep talking about how a physical store actually helps their online business—as if this wasn’t obvious.
Also read: The Smart Squad
This prediction looks pretty solid as both sides are upping the ante on delivery times and duking it out on Prime Day. Unfortunately for Walmart— at least so far—Amazon may be getting the better of them. This will only get uglier.
The core of this prediction was that buy-online pick-up in store (as well as ship from store) was going to continue to grow dramatically, but that many retailers would start to run into execution problems. As it turn out, stores aren’t always the best fulfilment centres.
Way too many people go on and on about “experiential” retail being the next big thing. Some even say the most important measure is “return on experience.” Please. One issue is we don’t have a consistent definition of what we mean when we talk about experience. It is clear however, that many retailers are continuing to turn up the drama and interaction, from Nike’s House of Innovation to Lululemon’s new Chicago store to Starbuck’s Roastery concept.
Also read: It's about the story
I would rate this one a solid incomplete. Yes, brands that are focused on niche segments continue to grow, but this definitely hasn’t really hit the radar screen yet.
Plenty of malls are dead or dying. A lot are doing incredibly well. Stories are written about the malls that are closing or getting massively repurposed. Breathless stories are written about new malls like Hudson Yards and the American Dream, as well as the big expansion of Bal Harbour Shops. Shift happens. The future will not be evenly distributed.
The growth in smart devices remains impressive. The penetration of voice shopping remains tiny. I am sticking by my prediction that there will be a big breakout year this technology. It just won’t be 2019.
Nearly a year ago, Brent Franson (of WeWork) and I wrote a piece that argued that ‘The Reinvention Of Retail Demands New Metrics.’ Admittedly, progress here remains slow, but studies like the ICSC’s ‘Halo effect’ are helping more folks understand that channel-centric metrics are quite misleading. The customer is the channel.
Clearly some of these are more hopes than predictions. But with a months left in the year, there is still time for movement, good and bad, on the accuracy of these (mostly) educated guesses.
Also read: Retail out of the box
Image source: shutterstock.com
Article by Steve Dennis published in STOrai Magazine. Steve Dennis is a consultant, speaker and writer on retail innovation, omni-channel strategy and marketing personalization. As President of SageBerry Consulting, he leverages over 30 years of experience to help retail and luxury industry clients accelerate their growth and become more customer centric.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.