Top Retail Trends for 2020
12 January 2020
It’s that time again already (the small window post-New Year but pre-NRF) where retail culture commentators mark one another’s cards about retail trends to watch over the next 12 months – and I certainly don’t want to disappoint, so here are my top six.
In-store Intelligence takes it up a gear
As the bottom line continues to bite for retailers, those (in the grocery space especially) needing to make further efficiencies and cost-savings are digging down into Big Data crunching – through advanced, predictive analytics in all shapes and forms.
One of the most fertile areas for retailers’ attentions is getting a grip on real-time shelf data, as what might at first appear to be ‘marginal gains’ prove to make a big difference over the long term – Instore intelligence innovators Trax have shown that improving on shelf availability by 3% can grow sales by 1%.
(For those particularly interested in this, I can’t think of a better use of 5 minutes of your time than to download and read the concise and insightful report by Trax and Coresight Research,
How Computer Vision Can Save Retailers from Costly In-Store Execution Issues.)
The physical space goes Social
Retailers succeeding in the challenging environment are almost all ones that have bridged the physical / digital divide. Well, 2020 is the year that specifically Social intertwines with the physical. While “social shopping” will go from strength to strength – driven by visual search and the popularity of (for example) Instagram & Pinterest – we will also see an increasing number of retailers dedicate some of the physical space in their stores to become ‘hubs’ for the production of social content.
I’m also very interested in how retail collaboration and experimentation is accelerating with a (some would say) surprising focus on the physical rather than digital. One great example of this is McKinsey opening an ‘experimental’ retail outlet in America’s largest shopping mall.
Design thinking shifts from people to machines
With my nerd hat on, and a tip of said hat to colleagues at DXC, it’s worth considering that one of the effects of automation, in-store robotics and the IoT becoming more prevalent in retail is that Design thinking is shifting from IT services for peopleto IT services for machines.
A DXC blog on wider tech trends for 2020 states, “As processing moves closer to where data resides … it will usher in new design choices and transformational architectures, and will push companies to more aggressively pursue IT modernization.” I won’t labour this point here for fear of going too technical, but what I’m personally interested in is underlining the importance of having an agile, supportive IT infrastructure in place. In other words, those retailers who haven’t yet undergone digital transformation should view 2020 as their “now or never” chance.
AI continues to sweep all before it
Over what seems like a few short years, AI has moved to becoming the game-changing tech platform for retailers, and one of the delights of NRF every year is hearing about new AI case studies and use cases; many but not all of them fitting perfectly into the all-important personalisation agenda. Retail AI innovators Antuit in their own Retail Predictions 2020 identify hyperpersonalisation and a resurgence of the loyalty program as two big trends for the year ahead.
The 2020s as a whole will see a huge increase in the importance of emotional intelligence (EQ) as an AI differentiator, central to accurately understanding – and then predicting– the desires and needs of widely different consumer demographics.
The edge … will give retailers the edge
The IoT is very much coming of age, and the extended retail space is fertile ground for innovation. This has meant solutions have to collect and analyze data from disparate devices, and typically have to manage large data volumes. But the intelligent edge is now here to avoid the limitations imposed by remote processing whether in data centres or clouds. Edge analytics allows retailers to run (for example) machine learning, predictive models that require powerful compute abilities.
In case this should seem overly technical or removed from retailers’ most pressing everyday concerns, it’s worth stating that the clever implementation of edge computing and analytics should have demonstrable real-world benefits for retailers including: improving customer experience instore; revolutionising the backroom and supply chain; and strengthening the ability to bring new revenue streams online quickly.
In fact one of the most interesting applications is in-store automation, and I really can’t recommend highly enough Capgemini’s brand-new-for-2020 report Smart Stores :Rebooting the retail store through in-store automation which explores (among other things) why automation in retail stores appeals to consumers and what technologies they are most comfortable using in-store.
Retail makes a difference
The last few years of the 2010’s saw a rapid acceleration in a trend that I think I can safely say has now even outgrown the very word ‘trend’ and become a part of the new normal: the changed expectations customers now have in terms of business ethics, transparency and sustainability. This impacts the retail sector more than (I’d argue) any other. Technology can help in innumerable good ways, from bringing transparency to the supply chain, through improving work practices for global workforces, all the way through to minimising waste.
But this isn’t all on the retailers, it’s on customers too, and one area where both parties can genuinely be seen to collaborate (rather than risk an inauthentic marketing campaign gimmick disguised as social concern) is in practically – by which I mean financially – giving back. Initiatives which enable customers to choose to give something to make a real difference to their local communities are gaining great traction. The 2020’s look set to be a very promising time for charities working with retailers, such as Pennies, who are enabling customers to make micropayments topping up their bills at digital point-of-sale (perhaps rounding up their bill to the nearest 50p or £1) which accumulate and go on to help identified charities.
Above all I think 2020 will be the year in which retailers may pay a price if they don’t keep their eye continuously on the fact that – as retail futurologist Michael Bayer persuasively puts it in an excellent new year blog– the retail customer today is expecting a seamless experience, independent of the touchpoints or engagement models they’re using. In other words, if the 2010’s have been about finding all the right pieces, then the 2020’s mean it’s time to bring it all together.
I’ll be writing about most of these subjects in more detail over the coming weeks so do check back in. I’ll also be at NRF in NYC in mid-Jan, and at Retail Tomorrow 2020 in the UK in early March, and happy to meet up with anyone in the retail, technology, or retail technology space interested in discussing any of the above. Drop me a line.