Ford’s self-driving delivery test with Walmart – Photo: Walmart
Will AI, tariffs or some other news be the big retailing story of 2019?
Will social shopping finally take off? Will tariffs rattle global supply chains? Will automated self-checkout take another leap forward?
Those are some of the predictions for retail found across articles and blogs. As usual, many predictions focused on how events or trends that occurred in 2018 could loom much larger in 2019.
On the technology side, a major focus was on the rollout of Amazon Go and how self-checkout experimentation would likely be jump-started over the next year. Many predictions focused on how automation, robots and AI (artificial intelligence) would reshape other processes across retail and better inform decisions with data.
Some felt retailers will finally address the high cost of online delivery, including returns.
Speaking to Independent Retailer, Ricardo Belmar, senior director, global enterprise marketing, Infovista and a RetailWire BrainTrust panelist, said he believes personalization and loyalty programs will become even more important. He cited the success of loyalty programs run by Sephora and Ulta Beauty. “Their programs feed the experience and emotional connection customers want with the brand,” Mr. Belmar said. “And of course Amazon Prime is the ultimate loyalty program bringing multiple layers of value to customers.”
Some predicted a greater commitment to the transparency of data. A bigger focus on small-format stores, virtual assistants, mobile messaging and sustainability all received call outs.
A common prediction was that retailers will continue blending physical and digital well beyond BOPIS, including linking offline and online accounts and, for traditional digital-first companies, opening more stores. Indeed, the brick & mortar comeback was a common prediction as the value of stores is being increasingly recognized in building customer relationships. Delivering a higher level of curated assortments and community-oriented experiences at the store level to further differentiate from the online experience was also a popular prediction for 2019.
In a column for Fast Company, Elizabeth Segran, however, believes the push to create “Instagram-worthy” moments in stores has run its course. She wrote, “In 2019, brands will need to think of other ways to get consumers into stores. Like, you know, developing great products, or having great customer service.”
- The surprisingly bright future of retail – Fast Company
- 2019 Retail Predictions – Independent Retailer
- 2019 Retail Predictions: Surprise Partnerships, Robot Coworkers And A Brick-And-Mortar Renaissance – Retail TouchPoints
- Insiders’ predictions for fashion and retail in 2019 – Glossy
- 7 Amazon-Obsessed Retail Predictions For 2019 – Forbes
- 10 Predictions for Retail in 2019 – Forbes
- 10 Refreshingly Honest Retail Predictions For 2019 – Forbes
- 9 Off-The-Radar Retail Predictions For 2019 – Forbes
- Vend’s Retail Trends and Predictions 2019 – Vend
Discussion Questions
DISCUSSION QUESTIONS: What are your predictions for the retail industry in 2019? Which prominent 2018 trends will accelerate and which will dissipate? Can you predict any major surprises?
Poll
BrainTrust
Art Suriano
Chief Executive Officer, The TSi Company
Min-Jee Hwang
Director of Marketing, Wiser Solutions, Inc.
My predictions — here are three of them:
I don’t see any one item standing out as a robust retail trend, but more likely a blend of everything mentioned. For starters, nothing is new. We have been seeing and hearing about cashless stores for some time now. They are slowly happening, but I don’t expect any significant boom. Apple started mobile POS how many years ago and how many stores have followed? Change takes time because of cost and public reaction.
As for AI, most of the buzz we read about comes from the companies developing the technology. Some of the new developments are outstanding, and no doubt deserve a place in the retail industry. However, much of the latest AI technology still doesn’t do yet what it was supposed to, and many of the concepts that were supposed to change the world have not been grasped by the public as a must-have.
So all of these will take time: some will stick and some will fade away. I suspect that by the end of this year, we’ll be looking back to January and asking whatever happened to this or that? I recall articles in 2016 talking about how retail was doomed, and how we would have no stores or malls because they will all close and everyone will only shop online. I wonder what those authors are writing about now.
Every single retailer out there is focused on the fulfillment process. In 2019, they will be using BOPIS towers/lockers more, partnering with other retailers more and making more acquisitions to enhance the cost effectiveness of the final mile. This emphasis will continue to drive retailers to improve their supply chains and the speed to deliver while reducing the cost of goods sold. Tariffs will play a role here, mostly causing heartburn in the sourcing/procurement departments.
Certainly technology and retail will continue to evolve. The ability to use e-commerce and a store experience in brand development will continue. The use of social media in building a connection to the consumer will continue to evolve. Loyalty and retention should always be number one on any retailer’s strategic plan.
But I believe the bigger story in 2019 will be around how the economy will fare with tariffs causing price increases throughout the extended supply chain for most retailers. Tariffs have already been proven to be harmful and will cause a trickle-down effect all the way to the consumer.
2019 will be a tough year for the economy and we have already seen hesitation and uncertainty in the markets at the end of 2018. This country’s economy is built on consumer spending. When consumers pull back because their spending does not go as far, retail suffers the most. I think the economy will be the biggest story of 2019.
Oh, yes. The tariffs are just beginning to bite. In six months, it will be a real issue. And the macro problem is that as companies adjust their supply chains, there will be no going back.
I think the evolving face of the physical store will be a huge focus for 2019 including new payment technologies and AI-led experiences. How this will drive the retail workforce will also be a huge industry issue as building the retail leaders of tomorrow means being able to employ them at the coalface. The standard to which retailers will be held account for various social justice issues will also be raised, with complacency not an option.
We have seen and heard all about the digital transformation and its impact on retail and the shopping experience. Over the past few years, terms and technological innovations such as AI, robotics, automation, IoT, blockchain, AR, social commerce, unified commerce and our all-time favorite omnichannel have been discussed extensively at NRF, Shoptalk and daily on this and other social platforms.
Yet as we have seen there is no magic wand or elixir that will transform a traditional brick-and-mortar retailer into an agile digital native company. Also with the digital native companies opening showrooms and retail presences, they may run into the same challenges retailers have faced.
What would be a welcome change at this year’s NRF is a return to retailers’ and brands’ stories about providing an outstanding customer experience. Whether or not it’s connected to incorporating an emerging technology — completely agnostic, brands should focus on a compelling story, a sense of purpose and obsessively focus on customer satisfaction.
I agree with you, Brandon, that this may be the year of retailers going back to basics. What’s old will be new again as the technology as others have pointed out here isn’t new, but perhaps the application of it is and certainly demonstrating it in proven use cases. Focusing on customer service, and making the customer the center of your focus (as Amazon does) should become priority one for all. This should be the year that reality catches up to fantasy and we see retailers learning how to “get it right.” Fast fail and experimentation are great and necessary, but at some point, you actually have to produce results!
So true Ricardo. It all comes down to fundamentals and providing the right customer experience. Retailers and brands are relentlessly in a chase mode to keep up with today’s digital native customers, who simply engage with the companies 24/7, in whatever channel they use.
Rather than be in a chase mode as it pertains to the innovation cycle, it’s far more optimal to focus on the business outcomes, and come up with a practical business process and technological solution to improve the experience. In addition, companies have to consider the internal adoption cycles of any technology with the right training, organizational changes, and incentives for the front line retail associates.
It won’t be about technology per se, but what retailers are doing with technology to keep and attract more customers. In list format, here we go:
The trend of digitization of brick-and-mortar stores will continue and accelerate in 2019 and beyond. Omnichannel retailing with all its aspects will grow. Additional format-related trends will be small format stores/pop-up stores in city centers to create buzz and exposure. Peronalization of everything from offers to products to location is also growing. A big topic is seamless checkout that will grow and will be tested by many retailers across formats and markets. Other tech trends that are growing in retail are — social commerce, visual search, AR/VR, micro-robots and the use of voice.
I predict that increased convenience in checkout and delivery will be the big story this year. From improved self checkout like Amazon Go to more free or low-cost same-day, next-day and two-day delivery options. Additional services such as subscription services for consumables like paper towels will also be tested with different delivery programs. 2019 will be all about how to make shopping even more convenient for the customer.
AI is already far advanced into our lives. For example, did you know that 80+ percent of all trades on the NYSE are made by AI computer programs, not actual humans weighing what is going on? This is why “the market” often behaves idiotically.
The AI of today probably bears little resemblance to what the AI of 10 years from now will be. However, one thing I am quite certain of is that it will not be driven by whatever techies dream up for your personal devices, smartphones and the like. Stores themselves will have moved involvement in the shopping trip by what THEY do, not what the shoppers do.
It reminds me of a reported comment from Clive Humby about a techie innovation Tesco was considering, and his comment was something like: “It won’t work, because it is not CUSTOMARY!” That’s right, “customary,” the way people behave will continue for reasons, beyond this short comment. But clues can be found in “Selling Like Amazon… in Bricks & Mortar Stores!”
Understand your own behavior better, Mr. Retailer. Super success comes from that — not “the crowd.” And do note that my first published comments on online retailing were written in the ’80s. It pays to think ahead, but understanding how retailing got to where it is — and what its REAL controlling profit motivations are — is a better guide to the future. Realize that Sears catalogs from a century ago were the cutting edge of in-home shopping, the precursor of today’s online shopping world. And yes, AI will be a major silent force behind successful retailing in the future.
Personalization will continue to grow. But consumers need to get personalized information and ads that REALLY are impactful. If they see through it as an automated message — instant delete.
BOPIS will definitely continue to grow. North American retailers have continued to take a long time rolling out in-store pickup. With online continuing to grow, BOPIS becomes the differentiator this year… while more than 60 percent of retailers DON’T have it.
Robotics – We should start seeing a few more pepper’s as interesting novelties – in-store. Great for some real-time in-store analytics. But this will NOT be mainstream yet.
Last-Mile Robotics – There will be more headlines, but we are still far from seeing these are mainstreet. Expect to see some more funny stories this year, from the tests (best of luck Pepsi…).
I think the overall economy, and the impact of politics on the economy, will be a major trend in 2019. Outside of that, though, I expect retailers to really focus on creating a great customer experience and more efficient and comfortable brick-and-mortar stores. Gimmicks don’t really work to attract shoppers, so that core experience must be incredibly strong to win business.
Self checkout is well on its way. It will happen in one way or another. But the developments will not be as startling as going from flip-phones to smart phones.
While AI is developing at a rapid place, the hurdle for a retailer will be how to use it. It will be like Big Data, or even how online has been integrated — slowly. AI will be used in many other applications before retail will be able to effectively implement it.
Tariffs are already starting to be a disrupted. Even if trade talks go well, the residual changes made in the supply chains will last for years.
I think that currently unexpected technology advances will dominate the news in 2019. We have already seen amazing developments with cashierless stores and drone deliveries that would have seemed crazy not too long ago. 2019 will likely bring more new ideas to make shopping easier and more efficient.
I also anticipate some customer backlash against the mechanical/technological approach to personalization and targeting and things like delivering offers when a customer is near a store. Customers will reject approaches that make them feel like they are being watched and then manipulated based on what they do. I envision a greater focus on emotional marketing and retailers using the data to understand and truly connect with their customers. As Shep Hyken said in his comment: Make people feel special and unique and you will earn their business.
I don’t know what will end up being the big retailing story. But I do know what stories would do the business the most good:
But maybe that’s just “running a good retail operation.” If so, then the story would be “retailers discover they should get back to business and ignore shiny tech baubles.”
The “tariffs” situation will work itself to resolution, or at least an end, in the near future. The more important longer-term (effect) stories will be more retail acquisitions by Amazon, an increase in same-day delivery services offered by traditional retailers and third-party services, and additional apples-oranges mergers and partnerships between retailers in different channels.
I wonder if chatbots will have reached their limit in 2019, and retailers will go back to human customer service reps en masse. At the same time, I see huge gains in AI capabilities, and that may actually continue to drive chatbot acceptance in the marketplace even further. Contradictory? Yep! Let’s see what happens!
The death of the high street seems to be past us and now predictions are more about the rebirth of the high street led by on line retailers opening stores or finally a realization that retailers can complete, if they get their offering and service right. Understanding customer behavior is undoubtedly one of the main factors that will help all retailers move forward, developing a closer relationship with your customers and surprise giving them what they want in a customer friendly manner will be high on the agenda for retailers. It was ever thus and hopefully retailers will understand that stopping all investment like deer in the headlights will not solve their competitive problems. They need to take charge of their business and create an interesting exciting and customer focused environment in which to shop.
Retail will begin to see the rise of new and consumer defined retailers. These companies will be better equipped to identify consumer needs and wants for product and/or services. Look for free shipping to give way to profit taking by means of delivery time increases and dates. Transportation and logistics will grow into much greater capabilities than ever expected. Much of this will be behind the scenes from the consumer view, but this is where retail will go — like it or not. Computers will demonstrate how dumb they really are as we will see billions of investment dollars go in the garbage like we did with talking end caps and shelves. Self check out will see the beginnings of fully automated tally and bag machines with live audio visual attendants running several lines at a time. This may be a fun year for all.