With a new year comes the anticipation of inevitable changes and evolutions in the retail ecommerce landscape. As consumers continue to shape their shopping habits around new innovations and the ease of online shopping, retailers must keep up with the expectations of a seamless omnichannel experience. The 80’s boom of mega malls continues to implode as major anchor stores close locations around the US. In its place has come the tech savvy and short-on-time millennials who continue to take advantage of the direct-to-consumer digital brands that have emerged. Here are some fun predictions we have for 2020 as it relates to fashion, ecom and retail.
1. Retail Sales vs Ecom Sales will continue to head in opposite directions
While retail sales growth decreased YOY, ecommerce sales continued to show double digit growth. 2020 will continue to show similar pacing and a larger gap. Millennials are now growing alongside their families, further pushing ecommerce growth. Most digital brands have adopted expedited shipping alongside free returns, encouraging more shoppers to stay in the comforts of their homes. This trend will continue its pacing as more Gen Z join the workforce with higher disposable incomes.
2. Brick & Mortar Stores will evolve to be more ‘Experiential’
In order to keep pace with emerging digital brands, retail stores will advance their efforts to stay both relevant and stall flat sales by creating experiential solutions. From cocktail bars to restaurants to personal shoppers, high-end retailers are devising innovative reasons for patrons to both stop in and stay longer. They are even implementing AI technology directly from their online forum to better serve those tech friendly clients.
For those just trying to avoid the endless badgering from sales associates working off commission, some retailers have taken steps to identifying your wishes. In select stores, Sephora has implemented color coded baskets that alert employees whether you need assistance or prefer privacy. A red basket signifies assistance is appreciated, while black alerts staff you would like to shop on your own.
3. Chapter 11 or Merging Brands?
While some brands staved off a full financial meltdown by merging with other capital rich brands, others failed to turn their strategic vision into profitability. Forever 21, A’gaci, Barneys New York, Diesel, Charlotte Russe and Gymboree are just a few of the big names that filed for Chapter 11 in 2019. Will 2020 see failing brands adapt and sell, or will we continue to see additional bankruptcy and liquidations? Time will tell, but I believe that you will see more of the same. Whether it be over-extending a brand or investing too heavily in brick and mortar rather than ecommerce, we will see dominoes fall on both sides of the spectrum. Niche market brands will look for partners to sustain growth while others die from ill-fated economic factors from within. No one is impervious to these disruptive trends. Even elite fashion brands like Prada are rumored to be looking for a buyer.
4. Celebrity Collaboration
Coach x Jennifer Lopez
Tommy Hilfiger x Zendaya
Adidas x Beyonce
Nike x Travis Scott
Rebook x Gigi Hadid
Notwithstanding those with existing brands, (we’re looking at you Kardashians/Jenners, Kate Hudson and Jessica Alba) designers are clamoring to collaborate with in vogue celebrities. Fashion designers are finding these ventures both profitable and bringing renewed interest to their brands. New customer acquisition is always at the forefront of growth and celebrities have a way of effectively re-energizing stale brands and creating interest outside traditional clientele.
5. Exclusivity and Limited Editions
Often coinciding with celebrity collaborations, Limited Edition clothing lines and signature pieces are becoming increasingly popular in the fashion industry. These product runs have become an effective strategy with the goal of carrying a sense of immediacy. This branding tactic is nothing new. High-end designers entire model is based upon exclusivity that separates themselves in both design and quality. By embracing these tactics, brands are building a strategy that elicits buzz from within and by introducing new buyers to the brand.
6. Election Year Mayhem
Typical election years bring an increase in consumer spending with a slight decrease the weeks following election day. Despite a strong economy and candidate spending that will shatter 2016’s levels, there is a mystery in retail surrounding political uncertainty. Consumer confidence is predictably shaken due to political unrest and a lack of a front-runner among the democratic candidates. If 2016 showed us anything, businesses will be better prepared should a downturn arise. When the public is fixated on the debate stage and endless news coverage, their attention is taken away from online shopping. Maintaining great data read on consumer spending will be essential to being successful in Q4. Our predictions: A significant rise in CPM (cost per thousand impressions) along with early Black Friday deals.
7. Flip-Flop
No. Not the beach-worn sandals. I’m talking about retailers and direct-to-consumer brands realizing the need for both to be successful. Offline is going online and online is going offline. An omnichannel presence is crucial to sustaining long-term growth as brands evolve to meet customers’ needs. Physical retailers and DTC brands are learning from one another and adjusting their strategies accordingly. With the high cost of customer acquisition and the demand for personalized and tactile shopping, retailers must re-evaluate the objective of a store. Managing a multi-channel model is no easy task, but with the assistance of an elite digital marketing collective (*hint*hint*- That’s us!), you can thrive and reach a larger audience as well as new customers.
8. AI Evolution
This trend is regurgitated each year as new technologies emerge. Advances in voice shopping, smart speakers, chatbots and virtual fitting rooms are revolutionizing the industry. The customer experience is also being driven by AI growth. With the ability to market specific items based upon past purchases and searches, AI is effectively predicting consumers needs and encouraging that next purchase. Customers once thought it was serendipity when an ad showed up while surfing the web. The technology that came across as scary yesterday is now the necessity of today.
9. One Word: Sustainability
What was once just a trendy catchphrase is the new social norm for fashion brands. According to recent marketing polls, over 65% of internet shoppers list sustainability as an essential factor when considering purchases. This younger generation of shoppers are riding the green consumerism wave demanding more eco-friendly products. Half-hearted efforts by brands are no longer enough as customers demand the fashion industry shift to more sustainable practices. Look for 2020 to bring additional pressure from consumers, forcing brands to adjust business practices accordingly.
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