According to ThredUp's 2019 Resale Report, which cites research from GlobalData, the secondhand market is projected to reach $51 billion by 2023, with $28 billion of that coming from thrift and donations, and $23 billion from resale. The United States has some catching up to do, but it’s on track—who hasn’t heard of Trader Joe’s, anyway? This past holiday, half of the 189.6 million who shopped during the Thanksgiving through Black Friday weekend visited one. Prior to that its foray into physical retail had been through partnerships with Target and West Elm. The retailers that lost CEOs last year include, , among others. And while Amazon’s 75% market share is still dominant with its Alexa interface, the coming ubiquity of voice search-enabled personal assistants like it will be a mainstay in the future. Consumers demand the same experience and information they need whatever channel they use. As consumers become more environmentally conscious, adapting a circular model may become particularly viable for retailers. In fact, the reality may become even more stark, considering that the economy could take a few dips that are poised to hit the middle class especially hard. It’s also a contributor to the development of a C2M (customer to manufacturing) business model, where companies use big data and AI insight to personalize the products for the individual consumer. , its merchandise-free retail concept, in 2017 and pushed the boundaries of what is considered a store. Retailers use AI for various applications. This notion of staging experiences — it should be what department stores are good at.". While it may seem obvious to note that retailers' fortunes generally depend on the ups and downs of the economy, in recent years in the U.S. that correlation really hasn't been all that hard and fast. and increased competition means that retailers are fighting for fewer apparel dollars. We’ve compiled a list of the changes that we believe are the keys to a successful retail enterprise in the next decade and now more urgent than ever. 3. Big retailers like Ikea and Nike are all experimenting with small-format or concept stores. 73% of shoppers switch from channel to channel when shopping, AR can be used to “preview” items before committing to a purchase, 60% and 55% of furniture and clothing retailers, respectively, already use AR, Experience-related spending has grown 6.3% in 2014 to 2016, outpacing every other form of expense, Millennials spend an average of US$164 a month on entertainment, US$30 more than Baby Boomers, The fear of missing out, or FOMO, is a byproduct of the experience economy, Sustainability translates to over US$1 billion of opportunity for retailers, Government institutions are responding to consumer behavior in sustainability by starting to ban single-use plastics, Sustainability is felt much more keenly in developing countries, Consumer expectation for delivery interval fell from 5.5 days to 4.5 days in just 6 years, 73% of online shoppers say free shipping “greatly impacts” their purchasing decision. In some ways, that explains Nike's choice to replace Mark Parker with John Donahoe, a former eBay CEO, given that the brand is looking to build out digital even more. 1 in 2 consumers have signed up for a subscription service in 2016, and 15% of those have signed up for subscription boxes. on. It will likely also need consent from the user. And the possibility of more unflattering stories pose a potential threat against the company's incredibly valuable brand in 2020. Analysis & Features Watch: Gen Z experts explain … The industry is approaching a record for filings this year, and others are still vulnerable as the economy, pandemic and retail evolution take their toll. In Britain alone, smart speaker adoption has increased. . Kaarin Vembar Staying up to date in an industry that’s constantly shifting isn’t easy, but being aware of changes as they’re happening can keep you ahead of the curve. The major participants in any commercial cycle are: 1. Industry experts predict that retailers will have both online and physical presence to cater to consumers. 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And new retail concepts like Showfields and Neighborhood Goods tout themselves as "the new department store." These can shape the way global consumers buy things—or even what they buy. Sustainability is not optional anymore, as far as consumers are concerned. Mass closures might slow in 2020, but don't expect a sudden halt. Over half of subscribers note that curated product variety is the primary reason they subscribe to such a service. That's perhaps best evidenced by Nike's commitment to its Direct strategy, which came to a head with the November announcement that it would, Last year saw the highest number of CEO departures through November since Challenger, Gray & Christmas started tracking the numbers in 2002. Retailers are still overstored. Meanwhile, plaintiffs have challenged whether Amazon can avoid liability over products sold on its site. Also, as the market becomes populated by a younger demographic, companies are finding it hard to abandon traditional modes of thinking. Whatever the case, technological and social shifts are unearthing several retail trends. Differentiating your business from the crowd means going the extra mile to make your shipping fast, efficient, and free. The discussion of AI naturally dovetails with voice search and personal assistants. The C-suite shuffling extends beyond just the top role, with Bed Bath & Beyond and J.C. Penney building up whole teams around new CEOs — and getting rid of those that didn't stack up. Through the process that the retail industry has been making, there have been several trends emerging that have changed the manner in which this industry works, and which have influenced the overall development that the sector has experienced. Social media management platform HubSpot is among the leaders in this software category. They may start shopping in one and checkout in either. Material purchases grew only 1.6% in the same period. 30% of Google searches in 2020 will require no screen at all. Nordstrom launched Local, its merchandise-free retail concept, in 2017 and pushed the boundaries of what is considered a store. This has made retailing the most attractive sector of the Indian economy. But it's not clear that the American consumer has utterly given up on the department store. All told, digitally native brands are set to open 850 stores in the next five years, according to a report from Real Estate firm JLL. “Brands as a culture” will become more tangible in 2019. Others, perhaps most notably Nike, have left the site altogether, deciding they can fare online better without the e-commerce giant's platform. Stores need e-commerce, yet. 2019 comes at a time when the retail industry has just enjoyed a record-breaking holiday buying season[1] at the end of 2018. In turn, DTC brands have taught pure-play physical retailers that the e-commerce experience is just as essential to their strategy as storefronts are. profit margin to the retailers. Material purchases grew only 1.6% in the same period. 2019 and beyond will demand more, however, as the rapidly maturing technologies of AR and VR can be used to augment the shopping experience in a given store. While buy online, pick up in-store (BOPIS) services aren't new, they will continue to help the bottom line of those retailers that can deliver on logistics and speed. Regarding faster retailing, speed is an important trend in retailing. Stores need e-commerce, yet e-commerce needs stores. It isn't simply a trend; it's become necessary for survival. Big retailers like Ikea and Nike are all experimenting with small-format or concept stores. This doesn’t mean that brick-and-mortar is dead, however. Additionally, the secondhand market is expected to grow to nearly 1.5 times that of fast fashion ($64 billion versus $44 billion) by 2028. Urban Outfitters entered the apparel rental space with Nuuly. Despite ongoing consumer confidence, the sector is likely to face further pressure to close stores, according to the Refnitiv StarMine Combined Credit Risk (CCR) model. Subscribe to Retail Dive to get the must-read news & insights in your inbox. Likewise, J.C. Penney hired Jill Soltau, an executive with a long history of merchandising experience, to solve a slew of problems at the department store, not least a lackluster assortment. Industry experts predict that retailers will have both online and physical presence to cater to consumers. in concert with an understanding of where the market is headed is an advantage. Add to that the political uncertainty ushered in by the Presidential campaign itself: "[T]he upcoming US presidential election could create volatility and uncertainty for the financial markets, and distract consumers," Telsey analysts warned. More brands are jumping on the trend, joining apparel services like Rent the Runway and e-commerce platform ThredUp and furniture rental companies like Fernish and Feather. Lord & Taylor in November was acquired by subscription apparel rental service Le Tote. Additionally, stated that in-store pickup is quicker than at-home delivery. The future of retail is unfolding before our eyes. Furniture Factory Outlet and Guitar Center both filed for bankruptcy in November, citing the impact of the pandemic. New: Order and Pay for Online Items in Stores in One Seamless Transaction, E-tailers are set to open hundreds of physical stores in the next 5 years, New Poll Reveals Why Americans Patronize Pop-Up Stores, Thinking inside the subscription box: New research on e-commerce consumers, Private Labels Rising: How Retailer’s Own Products Are Taking Off And Transforming The CPG Industry, Artificial Intelligence Revenue to Reach $36.8 Billion Worldwide by 2025, The new wave of “Consumer to Manufacturer”, Smart speaker ownership doubles in six months, Gartner Predicts a Virtual World of Exponential Change. Past the holidays and changes in consumer behavior, however, may either be a boon or an obstacle, depending on how quickly the retailer can adapt. Nordstrom, for one, with its emphasis on service and experimentation with concepts like its merchandise-free Local shops, seems to believe so. In 2018, US grocery chain Kroger rolled out digital price tag technology across hundreds of stores. And millennials are driving this growth[12]. Keep it clean. In fact, in 2019 the segment stood out as deteriorating "the most of all the retail sectors," with discounts increasing to the point where nearly three-quarters of department store merchandise … For example, an Alix Partners study found that consumers are becoming more impatient with delivery times[29]—from about 6 days in 2012 to just 4 days in 2018. How Will Voice Devices Affect the Future of Search? Secondhand retailer ThredUp recently forged partnerships with more traditional retailers including Macy's, J.C. Penney and Madewell. Here is a look ahead to 10 of the trends Retail Dive is watching most closely. A 2018 study from CB Insights revealed that private label sales are soaring[11]. That's an advantage when delivery is going through a time of upheaval. No spam. That's an advantage when delivery is going through a time of upheaval. The change of direction of retail in the coming years is, surprisingly, not just because of technology but due to changes in consumer behavior. Secondhand retailer ThredUp recently forged partnerships with more traditional retailers including Macy's, J.C. Penney and Madewell. Another retail industry trend that is becoming increasingly important to consumers is having a personalized shopping experience. It’s a big channel, though. These can shape the way global consumers buy things—or even what they buy. From the evolution of pure-play e-commerce to the purpose of brick and mortar, the Retail Dive team serves up its predictions for 2020. It's also primed consumers to look directly to brands for product, rather than to the retailers they often sell through. In fact, in 2019 the segment stood out as deteriorating "the most of all the retail sectors," with discounts increasing to the point where nearly three-quarters of department store merchandise was on sale, according to a Dec. 30 note from Refnitiv emailed to Retail Dive. . Private label market share is expected to rise to 25% in the next 10 years due to millennials’ shopping habits, A millennial’s typical shopping cart would have 32% private label items, compared to the average of 25%, AI revenues will reach US$36 billion in 2025. Sears has all but disappeared. While grocery retailers are trying to manage significant supply challenges due to consumer panic buying and resulting stock-outs, most non-food retailers are not yet feeling the full impact of supply … The biggest reason retailers are going in-house in the last few years is because they earn an average of 25% more. Trends are what allow traders and investors to capture profits. It will likely also need consent from the user. Store closures in 2019 exceeded 9,000 in the U.S., far surpassing openings, according to Coresight Research. All B2B Directory Rights Reserved. What is retail marketing? In C2M, AI will have a more intimate view of the user and what they need more than the users themselves know. And ThredUp formed partnerships with Macy's, J.C. Penney and Madewell to sell used apparel in stores. In 2019, the company was the subject of numerous stories that alleged it forced third-party sellers to lower their prices against competitors, tailored its algorithm to promote profitability, allowed dangerous products and salvaged goods onto its sites, and rushed to build a delivery network that poses a public safety risk while avoiding legal responsibility for crashes. Resale has grown 21 times faster than the wider apparel market over the past three years. From rental services to resale, the circular economy really took hold in 2019. that got on retailers' last nerve in 2019 serve as a neat metaphor for the industry as a whole — in retail, things are complicated, swiftly changing and sometimes contradictory. Smart speaker adoption has increased from 14% to 27% in one year. Top trend in shipping? This makes AR especially useful for furniture and clothing. We’ve compiled a list of the changes that we believe are the keys to a successful retail enterprise in the next decade and now more urgent than ever. 2. The traditional retail model of buying a product is so 20th century. All in all, experience-related expenses have grown 6.3%[26] in the period of 2014 to 2016. Warby Parker now has, and Bonobos has more than 60. Millennials (again) are the driving force behind these changes, but they’re only the spearhead of evolving consumer behavior across all contemporary generations. In a move that highlighted those woes, FedEx announced that the company would, BOPIS services may benefit traditional brick-and-mortar retailers, by, and turning stores into a competitive advantage over online retailers, including Amazon. Millennials (again) are the driving force behind these changes, but they’re only the spearhead of evolving consumer behavior across all contemporary generations. Allison Walzer, Sr. Retail Channel Marketing Manager at Microsoft, believes store design is a direct reflection of your brand and a vital part of staying competitive with e-commerce trends. All Trends articles in The Grocer. The lines between rental, resale and traditional retailers continue to blur. Large supermarkets and hypermarkets account for 51 percent of global sales, but smaller formats are growing at a faster rate, according to Nielsen’s The Future of Grocery report. The on-again, off-again, maybe-on-again of tariffs that got on retailers' last nerve in 2019 serve as a neat metaphor for the industry as a whole — in retail, things are complicated, swiftly changing and sometimes contradictory. At the same time, signs of a DTC shakeout have emerged, with some brands, including. Brick-and-mortar stores like Walmart and Target are also beefing up their online store capabilities. Store closures, of which there were 7,000 in 2016 to 2017 alone, are about to peak in 2019 to 2020[3] before the number stabilizes as online and offline shopping become one. It’s 2019 and the term “omnichannel” is still bandied around in retail circles. Too dystopian? The retail industry is constantly changing and there are always new challenges faced by the players in this competitive industry. In a move that highlighted those woes, FedEx announced that the company would cut air freight capacity after a 50% margin loss. 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