The world of retail never sits still. New customer demands emerge. New business models are pioneered. New tech innovations change the way we buy. The difficult thing is keeping track of all these changes – and those that will have the biggest impact. As such, we’ve gathered together the 10 major new retail trends that you need to know about.
- Grocery delivery is going superfast
Over the last 18+ months ecommerce’s growth has catapulted as a result of restrictions from the coronavirus pandemic. Some say that the sector has seen more than 5+ years of growth condensed into a matter of months. As customers have turned to online shopping channels, their service expectations have also become heightened. This has ushered in a new wave of superfast hyper-convenient deliveries. Across Europe, a huge number of grocery delivery start-ups have appeared promising to bring your goods to your door in as little as 10 minutes from placing your order. Getir, Dija, Weezy, Gorillas, Cajoo and Flink are just some of the companies driving this superfast delivery offering, but we expect to see more traditional grocery retailers explore their own alternatives as well.
- Sustainability is becoming a priority
More and more shoppers are prioritising sustainability in their purchasing habits. According to research by Gartner, 73% of millennials prioritise sustainability over price. This means they’re willing to pay more for a more sustainable option. Likewise, a major global study by IBM found 57% of consumers are willing to change their purchasing habits to help reduce their environmental impact. Consumer awareness around the toll retail takes on the environment, particularly in the supply chain, has also increased. As such, customers are being more considered in their purchasing, not only in terms of what they buy but also who they are buying it from. Retailers and brands are having to operate with greater transparency in order to reassure consumers about what they’re buying. We’re also seeing the potential for greater legislation around sustainability language after an investigation by the European Union (EU) and national consumer protection authorities found many ecommerce retailers’ sustainability claims were false or exaggerated.
- Resale is on the rise
Another growing trend is resale. This is directly linked to customers’ sustainability concerns. What’s interesting is that this trend has been driven, and largely fulfilled, by consumers rather than the retail industry. Customers have been using online marketplaces such as Depop, Vinted and eBay to sell second-hand clothing to one another. Now though we’re seeing more and more mainstream fashion brands looking to capitalise on the demand for clothing resale by launching their own second-hand platforms. This includes the likes of Patagonia, H&M Group, Levi’s, Globetrotter, and even luxury names such as Burberry. This trend is not only confined to fashion though. IKEA has experimented with a buy-back and resell scheme for its furniture. EBay has opened a dedicated hub for refurbished second-hand goods.
- Livestream selling is exploding
While livestream commerce, where customers can watch livestreamed content and shop the featured products, already had a foothold in Asia, uptake by brands and retailers has exploded globally during the pandemic. The results speak for themselves. In South Korea, web services company Kakao racked up 10 million views in just six months for its new live commerce service. Household brands such as Nordstrom, Levi’s, Ted Baker and Walmart have all experimented with livestream shopping. Major social media channels such as YouTube and Facebook are now facilitating livestream commerce. Some retailers are betting on livestream commerce becoming an ongoing part of their business. US beauty brand Beautycounter has opened a store that has a fully operational livestream studio in the back so that staff and special guests can create shoppable livestream content right on the shop floor.
- Ecommerce is becoming more engaging
One of ecommerce’s greatest strengths is the convenience it offers. However, as the Covid-19 pandemic forced more shopping journeys into online channels, customers have also found that this convenience can breed boredom. Efficiency often trumps experience when buying online. This means that while grocery e-retailers may be very good at reminding customers at the basket of their regular purchases, such as milk, that they may have forgotten, they’re not so good at helping them discover new things. For those consumers who shop online regularly, ecommerce can create a feeling of being in a ‘rut’ of passive repurchasing. As such, online retailers are increasingly looking at ways of making the ecommerce buying experience more engaging. This includes using tools such as styling games and quizzes to help customers discover new products, or interactive elements such as recipe finders to create shopping lists.
- Retail is coming to the customer
Physical retail experiences are also breaking out of the store to be everywhere the customer is. A number of retailers including Louis Vuitton and furniture brand Maker&Son are bringing the store to the customer’s home via mini, mobile spaces. Customers can shop a curated range of products or try out furniture without having to go to the store. Fashion brand Cuyana has teamed up with Toyota to create a mini travelling store that can be driven from mall to mall in the US. This type of fully mobile space means that, in theory, the store can come to wherever a retailer’s customers can be found. Meanwhile, Enjoy is turning delivery into experience for customers buying smartphones and other technology. Customers can choose Enjoy as a delivery option when shopping with its partner brands and have an expert bring the device to their door and set it up for them. We expect to see more and more retailers exploring ways to bring physical retail out of the store and take it directly to the customer. It’s an example of how high service is no longer just for luxury shoppers.
- Micro-fulfilment is going mainstream
Micro-fulfilment was forced upon a lot of retailers during the coronavirus pandemic. This is the practice of using small scale warehouses located close to end customers for last mile delivery. It is often cheaper and faster than using large warehouses which have to cover a bigger area. With many retailers experiencing store closures during the pandemic, they used these spaces as ‘dark stores’ to fulfil online orders. Now, retailers are increasingly investing in proper micro-fulfilment facilities. Interact Analysis reports that there will be at least 80 micro-fulfilment centres in the UK by 2023. Some will be building separate micro-fulfilment spaces in key customer populations, such as the Ocado Zoom space in London. Others will be utilising space in their existing stores as with grocery leader Tesco which has plans to open 25 in-store micro-fulfilment facilities. Micro-fulfilment also has a key role to play in the faster delivery times that online retailers are promising to customers.
- Omnichannel is being designed into stores
Omnichannel isn’t new, but it has never been more vital. The use of multiple channels in different, or even the same, shopping journeys is now well established. Retailers are responding to this customer buying behaviour by designing stores that have omnichannel at their heart. The new L’Oreal House of Worth space in Shanghai is one such example. Customers can connect to the space via their WeChat account to get a personalised experience. WeChat also enables L’Oreal to continue the conversation once the customer leaves the store. Customers can use facial scanning technology to get a personalised skin analysis and product recommendations. They can then buy them in the store, order them for delivery to their home, or save them to a digital basket to purchase later. The store is also used for livestreaming content which can be viewed and shopped by customers in other locations. As omnichannel becomes a must for retailers, so more and more stores will be designed to interact with a company’s other channels.
- Walk out payment technology is becoming more commonplace
While automated and unmanned stores have been established in China for some time, it is only in recent years that they have made their way into other major retail markets. With them has come the concept of ‘walk out’ payments which sees customers either scan and pay for their own purchases before leaving the space, or the ability for them to automatically be charged as they leave. The most famous example of walk out payments is Amazon’s unmanned Go and Fresh spaces and its ‘Just Walk Out’ technology which is now being offered to other retailers. However, we’re also seeing numerous other retailers implementing their own versions of walk out payment tech. This ranges in sophistication from smartphone apps for scanning and paying to fully automated solutions. The wider uptake of this technology by retailers is being driven by the increasing comfort of consumers to shop in this way. Some of this has no doubt been fed by the pandemic and an increased desire to minimise interactions. In addition, the more established the tech becomes the more affordable it gets, which enables more retailers to introduce it.
- Customers want to be more informed
This trend may be simple but it’s one of the most vital. Humans have never been more informed or had access to more knowledge than they do now. Yet, when it comes to retail the customer is often woefully uninformed. But this can no longer be the case. For example, every retailer should give customers the ability to check if a product is in stock before they visit the store. This may sound obvious, but the reality is that few retailers are giving customers this sort of information. Retailers should also embrace the fact that customers are using their smartphones when shopping in-store to support them with extra information. Natural cosmetics brand Lush does this via QR codes next to its products that when scanned bring up full information about the ingredients and usage of the item. This enables the retailer to provide customers with far more information than it could if it had to display it next to the product. The more information retailers give to customers, the easier it is for them to buy.
By Cate Trotter, Head of Trends at retail futures consultancy Insider Trends.