A $3.8 trillion industry

Earlier this year the National Retail Federation tipped the sector would enjoy $3.8 trillion in sales in 2019. That’s a rise of between 3.8 per cent and 4.4 per cent on the year prior.

Meanwhile, the industry employs one in five Americans, or 29 million people, and supports more than 42 million jobs.

The holiday season is peak shopping period

This year US retailers are expected to enjoy a $727.9 billion to $730.7 billion windfall over the holiday season, according to the National Retail Federation (NRF). They note this figure indicates a of 3.8 per cent to 4.2 per cent compared to 2018.

The period covers the six weeks leading up to Christmas and encompasses major sales events like Black Friday, and Cyber Monday.

Consumers to spend over $1k each

The NRF’s annual survey of holiday season spending intentions also indicates consumers are in good financial shape this year and are willing to spend more as a result.

Their survey of 7782 adult shoppers found on average consumers intended to spend $1047.83 each, which is four per cent more than the $1007.24 spent on celebrating the festive season in 2018.

Of that, $658.55 will be spent on presents.

Gift cards the No 1 present

The same NRF survey indicates gift cards rank as the number 1 present this year.

• 59 per cent of those surveyed indicated they would buy gift cards
• 52 will seek clothing and accessories as a present
• 35 per cent will purchase books/movies/music/video games
• 29 per cent will shop for electronics as a gift,
• 24 per cent will seek out home décor
• 23 per cent will buy jewelry
• 21 per cent will give personal care or beauty items
• 18 per cent will opt for gifts of sporting goods
• 17 per cent will purchase home improvement items

Three of the busiest days are still pending

According to Loss Prevention Media the prime sales event of the year might have passed but four of the top 10 busiest shopping days are yet to come.

Black Friday ranks as the biggest sales day of the year, but it’s closely followed by Super Saturday this weekend.

Other dates which are yet to deliver high trade figures include:

• Boxing Day on December 26, the day after Christmas (ranked number 3)
• Saturday, December 28, just after Christmas (ranked number 8)
• Friday, December 27, just after Christmas (ranked number 9)

Thanksgiving was huge

Black Friday traditionally ranks as the busiest shopping day for retailers, with the NRF recently noting an estimated 165.3 million people were expected to shop between Thanksgiving Day and Cyber Monday.

Online spending accelerates

Online spending this holiday period is expected to continue outpacing spending instore in 2019. According to Deloitte, 59 per cent of money spent over the period is predicted to be spent online, compared to 36 per cent in-store.

Meanwhile, two thirds of shoppers indicated they will research online and then purchase at least some gifts from a bricks and mortar outlet.

On a broader level, next year online sales across the year are expected to reach $645 billion.

Malls to benefit in 2020

Next year is tipped to offer modest growth to retailers. Trading Economics predicts the sector will enjoy 0.40 per cent month on month growth, while CBRE notes malls could be among the areas seeing a resurgence.

They state: “Malls are benefiting from the refreshing influence of Generation Zers, who prefer to shop in stores and are driving traffic back to brick-and-mortar retail. Many retail assets will convert to mixed uses, creating communities and thriving town centers”.

Millions of letters to Santa

Meanwhile, much of the shopping this festive season will be undertaken to assist Santa and his elves. Millions of Christmas lists will be posted to the big guy in red, with the New York post office receiving 500,000 letters each year.

Each year, retail experts gaze into the crystal ball, seeking to predict the future of the sector. This year it’s no different, with a number of trends forecast to have a major impact on an industry already working through disruption and a changing customer expectation.

With that in mind, here are the top 10 retail trends which are widely predicted for 2020.

Community building

2020 will be all about the “tribe” as retailers seek to create communities which are engaged and loyal to their brand. This will be driven by experiences that extend far beyond just shopping. It will include events, pop-ups and meetups, ensuring customers spend time interacting with each other beyond the traditional brand story.

The circular economy

The conscious consumer will make their presence felt further in 2020 with sustainability and social responsibility in front of mind.

That will give rise to the circular economy, which seeks to minimise waste through the reuse of materials and the remanufacture of items.

Effectively this creates a closed system (or circular economy) that reduces a brand’s footprint, resource input and waste.

Re-commerce

In the same vein, the increasing prevalence of the conscious consumer will continue to drive an uptake in strategies such as re-commerce. Particularly prevalent in fashion retail, re-commerce sees previously used items re-sold.

The National Retail Federation explains brands like Rent The Runway helped propel this trend into the mainstream and it’s likely to grow further in 2020.

“We now have a consumer that isn’t about packing the closet full of stuff, but is trying to understand what is most meaningful to purchase, what is going to last a little bit longer, and how to sort of jettison what was already there,” the NRF reports.

Social media shift

Social media will continue to facilitate the shopping urge with buy now buttons and product information. In fact, in 2020, the lines between social media and shopping and likely to blur further, in the knowledge if its on social, it’s for sale, you just need to find it, and you can through visual search.

Payment flexibility

With the increasing adoption of digital wallets and contactless cards, payment flexibility will be paramount in 2020 and beyond. As Vend explains, cash may never be fully replaced, but customers will look for more convenient and flexible ways to purchase.

They note:

• 90 per cent of shoppers say they use multiple devices to make online purchases
• 46 per cent of smartphone owners use peer-to-peer payment apps regularly.
• 1 billion consumers worldwide are expected to use mobile wallets for payments or money transfers by 2020

Online or bricks and mortar? It’s irrelevant

As NRF president Matthew Shay explained in his holiday retail forecast this year, the concept of online versus bricks and mortar is almost irrelevant. Customers simply expect to be able to shop on the channel that’s most immediately accessible to them, and the distinction between the two means nothing.

For retailers and particularly real-world brands, that means an online offering in addition to a physical outlet is now an expectation.

Experience matters

The customer experience will continue to drive retail in 2020, and word to the wise, it needs to be frictionless. Customer experience will involve every touchpoint a consumer has with a retailer, and those who can offer something unique and meaningful will be primed to achieve success.

5G

5G mobile internet began to really make headway in 2019, but in 2020 it will roll out on a much broader scale. Set to deliver greater bandwidth for video, the Internet of Things and big data, 5G will revolutionise everything from augmented reality and immersive experiences to retail app adoption.

Extended reality

And on the note of augmented reality, there’s a new term now being deployed – extended reality, which encompasses both virtual and augmented.

When employed by retailers, it offers retailers the chance to extend the customer experience by allowing customers to virtually try things on and see products in their own environment.

It’s personal

The push for a personalised retail experience is nothing new, but will again intensify in 2020. Consumers now expect retailers to know them, understand them and reward them with unique deals and offers based on the data they supply.

The final word

In many ways, 2020 builds on trends which have progressively emerged in 2019 and even before. But unlike years gone by, retailers are primed and ready, they know what to expect, what to implement and how to meet the customer expectation to best effect.

The top 10 spending days

According to the National Retail Federation, this year’s holiday spending is set to hit a high, totaling between $727.9 billion and $730.7 billion in 2019.

The peak period traditionally kicks off with the Black Friday sales and then extends all the way to December 31.

Meanwhile, Loss Prevention Media notes eight of those busiest retail days are yet to come in December, with this Saturday, December 7 ranking 10^th on the list of busiest shopping days of the year.

In descending order, they report the following dates fall in the top 10:

• Number 1 – Black Friday on November 29
• Number 2 – Super Saturday on December 21, just before Christmas
• Number 3 – Boxing Day on December 26, the day after Christmas
• Number 4 – Saturday, December 14, two Saturdays before Christmas
• Number 5 – Saturday, November 30, the day after Black Friday
• Number 6 – Sunday, December 22, the last Sunday before Christmas
• Number 7 – Monday, December 23, just before Christmas
• Number 8 – Saturday, December 28, just after Christmas
• Number 9 – Friday, December 27, just after Christmas
• Number 10 – Saturday, December 7, first Saturday in December

Together, these days are predicted to account for 42 per cent of all foot traffic throughout the holiday period.

Thanksgiving preliminary figures

Black Friday traditionally ranks as the busiest shopping day for retailers, with the NRF recently noting an estimated 165.3 million people were expected to shop between Thanksgiving Day and Cyber Monday.

This year, preliminary figures indicate foot traffic on Thanksgiving and Black Friday may have been slightly down on 2018 by around three per cent.

The figures further indicate, many people got in early with a 2.3 per cent rise in shoppers on Thanksgiving, but a 6.2 per cent decline in foot traffic on Black Friday.

And, a couple of trends also emerged, including the fact the lines between online and bricks and mortar continued to merge with Buy Online, Pick Up In Store (BOPIS) surging in popularity.

BOPIS shoppers to purchase online during sales periods but pick up at the retail outlet when crowds aren’t as prevalent.

Preparing for the busy days to come

With eight of the 10 busiest shopping days still yet to come, retailers can rest assured there is still ample opportunity for consumer spending.

To maximise the expected profits retailers should:

• Ensure their loss prevention and in-store security is up to par, utilising features such as Electronic Article Surveillance, CCTV, bag checks and loss prevention personnel
• Double check their stock levels and incoming orders to accommodate expected peak shopping days
• Educate staff on the increased likelihood of theft over the peak shopping period
• Sufficiently staff stores for busy periods and ensure they are adequately trained in both customer service and store procedures such as handling returns, managing BOPIS, and maintaining best practice in loss prevention
• Audit their omnichannel offering to ensure a frictionless customer experience across all mediums
• Track trends including foot traffic, sales data and popular products to gain an insight into immediate product demand and availability and to have a better understanding of what’s likely to occur next year

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