Deloitte has released its retail predictions for the year ahead, noting 2019 will be a year of transition for US retailers.
Following a bumper holiday season, they tip this year will again be driven by disruption and an increased consumer expectation, where retailers who clearly understand their position, potential and role in the market will be best poised to thrive.
Here’s an insight into the retail trends of 2019 and the top tips that retailers can embrace to strike a chord with an increasingly savvy consumer.
A year of transition
Deloitte explains 2018 offered a lot for US retailers to digest. The year featured trade and economic tensions, mixed retail figures, some high-profile bankruptcies, yet a record-breaking holiday season.
It also saw the consumer expectation further increase, as the digitally savvy shopper continues to embrace the idea of having it all – convenience, values that align with their own, information at their fingertips, and a more personalized retail experience.
“The next 12 to 18 months will likely see an industry in transition—an industry managing through uncertain times and placing bets on what will separate the winners from the losers. Those who can synchronize their investments to profitably empower the consumer will likely find themselves on the right side of the tipping point.”
Why do you matter?
In 2019, retailers will need to know why they matter more than ever before. In an increasingly competitive online and physical space, they will need to be “crystal clear” about their offering and position in the market.
What makes you unique? Why would the consumer pick you? What can you offer in a way no-one else can? And how do you make yourself indispensable to your target market?
These are all questions retailers need to answer and thoroughly understand in order to carve out their niche in a world filled with choice and information.
I want it all…
It’s little secret today’s consumer is more empowered than ever before. They have choice, information and insight into products at their fingertips courtesy of the online world and social media.
They also have greater expectations of the retailers servicing their needs.
“Consumers realize they can have it all. Today’s digital consumer is increasingly connected, has more access to information, and expects businesses to react to all their needs and wants instantly. Many shoppers have an increased desire for personalized services, and they are starting to think more about privacy in the wake of high-profile corporate and social data breaches,” Deloitte reflects.
So, what is it that they want?
In a time-poor era, convenience ranks as one of the key factors that consumers seek. This was also touched on at this year’s NRF Big Show when Lee Peterson of WD Partners noted click-and-collect, along with online order fulfillment, offered major potential for bricks and mortar.
In many cases it’s easier and cheaper to ship an item from a store’s inventory than from an online distribution centre, he explained.
Deloitte’s key tip: Win consumers with convenience
“The top reason consumers shop online: convenience. Alternative fulfillment-driven offerings that are more expensive to execute can improve experience. Invest in consumer-facing convenience that moves the needle, and look for opportunities to make up margin elsewhere.”
Consumers now expect to be viewed as more than a number or a faceless member of the crowd. Retail is personal, with data and analytics fueling the trend.
“Retailers should leapfrog their current approach to personalization, offering more than mass customization, which involves bucketing your consumers into a limited number of segments,” Deloitte claims.
“The next phase becomes an exercise in data aggregation and activation, reducing each segment to a single individual. Retailers should refine each consumer profile based on data from all types of sources—social media, transactions, and reviews— to achieve ultra-personalization.”
The importance of values
Brand loyalty continues to play a role in retail, but is a two-pronged approach focused on loyalty rewards and offering values that align with those of the consumer.
“Outside of adapting and refreshing the loyalty program, driving consumer loyalty can require a focus on integrity and identity to create an emotional connection,” Deloitte explains.
Their tip? “Consumers are spending their money in ways that align with their values and identity. Look for opportunities to unite consumers through a loyalty program by connecting on values.”
Not just innovation for innovation’s sake
In another theme that was touched on at this year’s NRF Big Show, Deloitte notes innovation should be focused on better servicing the consumer, rather than innovation for innovation’s sake.
“Retailers should start with the job to be done and understand the true values expected from the solutions. With this foundation, retailers can determine what internal and external technologies they need to fulfil their brand promise.”