Adam Shilton

2018 was a challenging year for retail. We saw household names such as Toys R Us and Maplin vanish from our high streets, legacy retailers such as House of Fraser and New Look facing an uncertain future and high-profile players such as Dolce & Gabbana and Burberry making the headlines for all the wrong reasons. All while consumers reigned in their spending and chose to prioritise experiences over goods.

So as the retail industry takes a collective deep breath ready to do it all over again, I take a look at the factors that will begin to play out over the course of the next twelve months. Various macro influences will shape the face of retail in 2019 with technology, social conscience and notably politics all having an effect. More than ever before, we will see consumers curating their own retail experiences and brands double down on their multi-channel strategies.

1. Consumers as Tastemakers

Consumers, not brands, are increasingly becoming retail’s tastemakers and this trend will continue over the next 12 months. Social media, a desire for instant gratification and newness along with a greater appetite for self-expression (particularly amongst Gen Z customers) means that consumers are becoming ever more single minded in their purchasing decisions and the ultimate curators of their own experience.

“Consumers are becoming ever more single minded in their purchasing decisions and the ultimate curators of their own experience.”

Enabled by established disruptors such as Netflix, Uber and Deliveroo consumers have become acclimatised to instant self-gratification and brands will need to harness this by creating online and offline experiences that respond quickly to changing tastes and trends. Only then will they be able to capitalise on the currency of now.

Tapping into this next generation of tastemaker, Snapchat recently announced it will be rolling out a visual search function in collaboration with Amazon that allows its users to simply photograph a product they wish to buy through the camera function and be instantly linked through to that (or similar items) on Amazon. While in the physical world, department store Macy’s recent acquisition of concept pop-up retailer STORY (who facilitate short-term brand collaborations) will hopefully inject much needed spontaneity, newness and experimentation into their store environments.

2. Sustainability & Transparency

Sustainability, transparency and a brand’s ability to proffer its ethical credentials to an increasingly socially aware customer will resonate more than ever in 2019. Environmental concerns, sustainability in the supply chain, labour conditions and data protection are all high on the agenda for an increasingly enlightened consumer. Indeed, 73 percent off millennials are willing to spend more on goods that are sustainable and on brands that convey a genuine social conscience.

Several retailers are already responding in earnest, perhaps none more so than apparel brand Everlane with its ‘radical transparency’ mission statements and ethical-from-source credentials that sit at the very heart of the brand’s DNA. However mass-market brands have been quick to respond. Zara, Mango and H&M all stock their own ethically sourced ranges along with Primark who are increasingly sharpening their sustainability focus both instore and online.

Retailers who wear their ethical credentials on their sleeve will increasingly become the new normal throughout 2019, with those who have skeletons in the closet coming under greater scrutiny.

3. Rent, Reuse, Resell

A spotlight will also continue to shine on the disposable nature of fashion with apparel rental, resale and reuse high on the ethical agenda.

More than ever consumer’s desires to tap into this market are being met by an increasingly varied array of options. Rent the Runway, for example, supplies women’s designer apparel and accessories for short-term use to clients unwilling to spend big bucks on seasonal pieces that may only be worn a handful of times. Instead customers can rent items on an ad-hoc basis through Rent the Runway’s website for as little as 10% of the garment’s original retail price. Initially online only, they have now expanded to five bricks and mortar sites in the USA where clients can access personal stylists, self-service checkout kiosks and quick return points, all adding value to the brand’s core offer.

The fashion resale market will also gain pace during 2019. At the luxury end of the spectrum The RealReal offers customers authentic second-hand designer items online and within its two bricks and mortar showrooms in New York and LA. ‘Consignors’ wishing to sell unwanted items send goods for evaluation and ultimately receive up to 85% of the resale price. At the opposite end of the resale spectrum Depop is a global online fashion resale marketplace that allows mostly Millennial and Gen Z users to buy and sell unwanted garments through the visually slick mobile app. Combining the intuitive nature of Instagram with the convenience of Ebay, Depop saw its users swell from 8 to 12 million in 2018 and have recently ventured into bricks and mortar in LA and New York.

As platforms respond to consumer’s appetite for greater accountability and the lifecycle of fashion becomes more fluid, retailers must seek to access this rapidly growing market in order to offer affordability, traceability and provenance to their customers.

4. Technology Gets Real

‘Cool’ PR worthy in-store tech will feature less in 2019 as underwhelmed retailers (and customers) accept digital for the sake of it does not deliver a return on investment. While engaging instore customer ‘experiences’ will remain of paramount importance, retailers will focus more sharply on how technology can directly add value to the customer both instore and online.

For online players, the application of technology to facilitate ever more frictionless shopping experience will continue to be a dominant force throughout 2019. Leading E-commerce brands will continue to explore new and innovative ways of converting sales by improving convenience while also reducing the friction point between seeing and buying.

The friction point of online returns will also be a hot topic in 2019 for customers and retailers alike. While free delivery and returns have become ubiquitous, it’s estimated the cost of returns to retailers currently stands at around £60 billion a year with fashion making up the largest proportion of returns in the UK (25% overall). London alone returns 66 million items of clothing per annum and given that most of these find their way into gasoline powered courier vans the environmental impact of returns is also likely to come under greater scrutiny. Alarmingly, it’s estimated that free returns in London alone account for the same amount of CO2 as produced by 1274 homes in a single year.

Japan’s largest e-commerce platform Zozotown may however have found an unlikely solution to both of these issues with their ‘Zozosuit’. Available internationally, customers receive a polka-dot Zozosuit through the post and using their smartphones scan themselves to capture their precise body measurements. Once the individual’s stats have been uploaded, orders from the Zozotown web platform are guaranteed to fit the wearer perfectly, thereby reducing the likelihood of returns while also increasing customer engagement. Time will tell whether the Zozosuit becomes a game-changing disruptor for online fashion, or simply a novelty item consigned to the sock drawer.

5. Multi-channel Becomes the Norm

As shopping across a variety of retail touchpoints becomes the new normal, brands will increasingly seek to consolidate disparate retail channels into a single multi-channel ecosystem by fully integrating their online, social media, marketing and store strategies to present consistency, capture new consumers and convert sales.

Digital native brands are the ones to watch here as increasing numbers seek to build on their established online and social media followings by moving into the physical retail world. Indeed, if proof were needed that physical retail isn’t dead, 67% of leading ecommerce brands opened physical stores between 2014 and 2017 according to a report by retail platform Hero. The difference with these physical sites compared to their bricks-and-mortar peers however is that more often than not, online brand’s outposts are less about selling and more about creating physical brand “embassies” with a focus on experience, advice and community rather than simply selling.

Traditional retail brands must therefore seek to reverse engineer this thinking across their store portfolios and deliver meaningful in-store experiences that entice and excite the customer, while simultaneously offering convenience, breadth and consistency online. Retailers must embrace deep integration and move away from a siloed mindset and towards creating seamless multi-channel expressions for the customer.

So as the year ahead begins, 2019’s trends will be driven by a consumer who seeks increasingly personalised brand experiences across multiple channels that don’t come at the expense of the environment, and who’s perception of the lifecycle of products is increasingly fluid. Therefore, brands who can tap into these evolving customer expectations and harness the cultural zeitgeist will be best placed to succeed in the year ahead.