Retail 2020: Trends and Predictions You Should Know
Retail in 2020 is different than it used to be. Changes in how we buy and consume products are affecting both online and offline stores. These shifts are prompted by global mobility as well as generational changes and fueled by emerging technologies.
It also goes without saying that retail in 2020 and beyond will be significantly affected by the coronavirus pandemic. While the exact impact of this health crisis is difficult to estimate at this point, it’s clear that many businesses are already struggling and it doesn’t seem to change for better any time soon. With that in mind, it’s even more important to:
- adjust your offer and communication to the current needs of consumers,
- create a convenient shopping experience, both online and offline.
Here’s a list of predictions and trends that are you should consider embracing for your retail business in 2020
1. Take advantage of data-driven retail
- Attract consumers to your brand
- Personalize shopping experiences
- Improve supply chain strategies
2. Technology you should pay attention to
- Efficient operations
- Mobile commerce
- Post-digital technologies
3. Answer your customers’ needs
- Sustainable retail
- Shopping with a human touch
- Retail with purpose
4. Provide an integrated shopping experience
5. Post-crisis predictions for retail
6. Which of these retail trends can you embrace in your business?
7. Moving online in 2020
Take advantage of data-driven retail
Whether you’re operating offline or online, you have multiple opportunities to collect data about your business. From supply chain operations to customer re-marketing activity, you can gather valuable insights at every stage of the retail process.
The challenge for retailers is not to get the data – chances are you already have access to many data sources. The real difficulty lies in organizing the information and creating a system for sharing relevant data with teams that might benefit from it.
Experts predict that in 2020 retailers will be leveraging data to both: increase the efficiency of their operations and drive customer engagement. Here are some use cases that are possible to explore for data-rich businesses:
Attract consumers to your brand
Data-driven marketing will help you reach consumers at the right time and in the right place. Your personalized outreach in 2020 could be more than just inserting your customer’s name in your generic sales newsletter.
Robust CRM tools will allow you to organize information about your customers and tailor offers that are likely to get their attention. At the same time, you have multiple platforms and tools at your disposal to create highly targeted advertising, also for physical stores.
Just remember, you may need to stretch your creative muscle and be empathetic toward your users’ needs to make a real impact. Brands are no longer relying solely on traditional advertising platforms, especially since the effectiveness of these activities is not always apparent. P&G, for instance, announced in 2019 that they want to move towards editorial rather than promotional tone in their marketing:
Personalize shopping experiences
The importance of personalizing shopping experiences and customer support at every stage of the purchase process has been emphasized in the Retail Trends Playbook 2020, prepared by PSFK and Microsoft. As a digital retailer, you are able to offer automatic recommendations in line with a given user’s past purchases. Even in brick and mortar stores, you can equip your staff with access to customer’s purchase profiles so that they can provide more meaningful support.
Offering personalized marketing in retail will also be one of the key ways to loyalise a customer whose buying habits have changed towards online in the era of coronavirus. Reaching them in various forms of re-marketing and offering products or services that match their new shopping habits shaped by the pandemic will be crucial.
Your data-driven approach to retail will pay off. According to Salesforce and Publicis Sapient, personalized experiences result in a 4.5 times higher cart rate and a 5 times higher per-visit spend.
Improve supply chain strategies
The data that you probably already have at your disposal will allow you to create an intelligent supply chain. When you implement software that helps with data analytics and predictions, you can make better supply management decisions. For instance, you will be able to stock your stores with products that are most desired by local consumers.
Leveraging data provides you with a vital tool, a good visibility into your supply chain:
Data-driven supply chain management is a big trend for 2020 retail because it allows you to both: reduce costs and better meet your customers’ needs.
Technology you should pay attention to
The development of new technologies and digital tools has been affecting retail tremendously in the last couple of years. Keep in mind that these solutions are not reserved for online stores; brands have been successfully implementing them in their brick and mortar businesses as well.
Efficient operations
Running a retail business efficiently translates to its bottom line directly. This is why optimizing operations is one of the priorities for retailers in 2020:
Regardless of the scale of your retail business, technology allows you to increase its efficiency with specialized Warehouse/Inventory Management Software to keep track of your stock and orders. Many businesses could also benefit from Product Information Management tools, which allow you to create a single source of product-related data.
In the context of the epidemic, it is particularly important to implement the possibility of general contactless payments in offline retail sales.
Also, the effects of the epidemic will most severely hit producers whose brands do not have well-functioning E-commerce platforms. Closing shops will not only make it necessary to sell online in order to stay in business, but will also change consumers’ shopping habits towards digital. Many retail companies should consider implementing Digital Shelf Optimization (DSO), which is a methodology that allows brands to better understand how consumers are looking for products on a retail website or how a specific vendor algorithm matches a consumer search with product suggestions.
Retailers are also getting more and more accustomed to robotics, but not as a way to merely introduce in-store marketing stunts. Instead, robots and automated systems became the means to improve the efficiency of retail operations. The market size for retail robotics is predicted to reach over $41 billion in 2026. Moreover, social distancing enhances not only remote working but also the prospects of automating many jobs.
Mobile commerce
The number of ecommerce sales finalized on mobile devices is going to grow, especially during and shortly after the crisis. And so do the expectations of users regarding your store’s performance. If it’s loading too slow or not offering enough options for checkout, potential customers will probably abandon it.
Retailers seek mobile performance improvements by implementing Progressive Web Applications (PWA) and Accelerated Mobile Pages (AMP). In order to cater to various payment preferences, stores offer different types of payment, including mobile wallets. This variety plus an instant checkout allows people to have a frictionless purchase experience.
Post-digital technologies
As consumers’ expectations change, so do retailers’ way to address them. People expect immediate gratification, but they also make shopping decisions based on a particular brand’s larger purpose (see Retail with purpose).
In light of these changes, Accenture suggests that retail businesses can significantly benefit from the so-called post-digital technologies to build long-lasting relations with their audience and increase brand advocacy. In their opinion, retailers can differentiate themselves from others with DARQ (Distributed Ledger, AI, Extended Reality, and Quantum Computing)—out of these, AI and Extended Reality are the most mature in the retail industry.
Social commerce
Another retail trend for 2020 is social commerce. As people browse their favorite social apps, they want to be able to purchase products that catch their attention immediately. Since 87% of eCommerce shoppers believe social media help them make shopping decisions, you can give your business a boost by enabling social shopping.
Answer your customers’ needs
These trends have recently emerged when it comes to what people expect from retailers. Pay attention to them, and you’re likely to win yourself a group of loyal clients.
Sustainable retail
Consumers are getting more and more concerned about the backstage of retail: manufacturing, supply chains, waste disposal. Brands that aren’t transparent about their operations may lose people’s trust.
Transparency, however, isn’t enough. In order to thrive in the circular economy, retailers need to actively participate in efforts to reduce their environmental footprint.
Shopping with a human touch
In the era of multiple tech touch points retailers use to connect with their audiences, people long for human interaction. Although the epidemic significantly hinders direct human contact, many people prefer to make purchases through face-to-face contact with the seller, appreciating the quality of service. As consumers, we’ll be craving for this as soon as the crisis begins to pass. Interestingly, it is the wealthy customer that appreciates human contact the most.
This retail trend is not necessarily an anti-technology stance: tech is still important. In fact, technology can empower retailers and their employees to provide better human-centered services: they’ll have more information on the clients and more time to focus on them.
Retail with purpose
2020 is when customers want to see the values of the brands they purchase from. When retailers clearly communicate what they stand for, consumers perceive them as more authentic and trustworthy brands. Whether your purpose is connected to sustainability, social issues, or your local community, make sure to let your audience know about it and inspire them to support your cause.
Provide an integrated shopping experience
The omnichannel strategy is still critical as people continue to utilize multiple channels of the same brand. Although the coronavirus crisis has cut off some of the points of contact with the brand, they will soon return, waiting for customers longing for a full experience of contact with the brand in the various fields it offers.
The brand experience itself should feel the same regardless of the channel. It’s not just about cohesive communication and marketing: the most effective retailers give people opportunities to use different touch points at different stages of their customer journey.
Post-crisis predictions for retail
The crisis will certainly be best handled by those brands that took care of effective online communication with the customer and had prepared E-commerce infrastructure, which could be used in the first half of the year with doubled strength. This trend will continue as customer habits will change towards online shopping preferences in almost every industry, from fashion and cosmetics to food.
The first forecasts also indicate that the crisis triggered by the pandemic will result in more limited spending due to increased unemployment. This means that many consumers will switch to a money-saving policy. We’ll probably buy less, but spend more money on a single product, with a focus on quality rather than quantity.
Which of these retail trends can you embrace in your business?
Take a look at a summary of retail predictions and trends described above. Use it as a checklist to make sure that your business is up to speed with the current market situation:
- Conduct personalized outreach and introduce relevant recommendations
- Offer shopping experiences with personalized details based on customers’ purchase profiles
- Utilize data for intelligent supply chain management
- Implement tools to increase the efficiency of your operations (WMS, PIM, DAM, ERP systems)
- Invest in E-commerce platforms if you haven’t done that by now
- Optimize your store for better mobile performance
- Enable your customers to purchase products through social media
- Use artificial intelligence as well as virtual and augmented reality to provide unique experiences to your audience
- Make a shift towards sustainability
- Focus on human interaction more
- Emphasize your brand’s purpose
- Unify the shopping experience in all of your brand’s channels
This list of trends and predictions will be relevant not only in 2020 but also in years to come. Granted, organizations operating on various levels will pay special attention to different aspects of these trends, but the overarching themes don’t seem to be just seasonal fads.
Moving online in 2020
Retail trends for 2020 and the uncertain, dynamically changing market situation clearly indicate that the main challenge to help build stronger relationships with consumers is to focus on ensuring that online shopping is as accessible as possible. This will provide consumers with a convenient and personalized way to purchase products, and for business owners it will also mean being able to better digitally identify their customers and effectively reach them with a personalized message. If creating an online front end for your retail business is on the to-do list this year, check out our comprehensive guide to moving from offline retail to E-commerce.
Sources:
Retail Trends 2020 by Deloitte
Shopper-First Retailing by Salesforce & Publicis Sapient
Retail Trends Playbook 2020 by Microsoft and PSFK
Connecting the dots. Consumer trends that will shape 2020 by GlobalWebIndex
Retail Trends 2020: What to look out for by GlobalWebIndex
Retail Trends and Predictions 2020 by Vend
The Future of Ecommerce by Shopify
Retail Technology Vision 2019 by Accenture
