Retail 2019: Trends & Predictions

It has been a difficult year for retail in 2018, but the high street is not dead. It is simply changing and adapting to meet the needs and demands of today's connected consumer. Take the new Nike stores in LA and New York, for example, which are built on data and driven by digital. Each site seamlessly integrates digital and physical retail, offering spaces and experiences that are both personal and responsive. This, according to Nike, is the future of bricks-and-mortar retail and the experts, it seems, are inclined to agree.

Activating on Customer Need States
Emily Hamilton, director of brand marketing, FRCH

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Bricks-and-mortar retailers need to do a better job of anticipating their customer need states. A shopper with a return or an issue with a product is going to be in a very different mindset (and potentially frustration level) than someone just looking to browse. By identifying what those customer need states are sooner and giving each one a clear, dedicated destination in your space, brands can provide a more effective experience for both customer and retailer. Whether it’s a separate entrance for product support, dedicated spaces for returns, a drive-through BOPIS offering, or even an entire store dedicated solely to testing product, retailers need to create an experience that’s intuitive and efficient for all customer need states.

Retailers also don’t want to over promise and under deliver. These solutions must be supported by clear signage and wayfinding systems, dedicated staff, and a seamless online experience. Make it intuitive, make it simple, make it convenient. While these may seem like table stakes, if the space isn’t activated correctly it becomes a determent to the brand, as shoppers may not give you a second chance to get it right.

Brands who want to stand out in 2019 should be proactively offering these solutions to provide their customers with a more tailored experience and one that can optimise their operations to maximise both their square footage and their staff. Creating and delivering a flexible experience to meet the unique needs of each customer journey will be crucial in the future of retail.


Learn from Covent Garden
Howard Saunders, retail futurist, 22nd & 5th

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Oh, how I miss those halcyon days, when we would playfully explore next year’s retail trends in terms of form, colour and texture. More recently, we would toy with far fetched visions of a future populated by robots and drones built to cater to our every whimsy. But all this seems irrelevant now that a perfect storm has descended upon our town centres. 2018 was the year M&S announced its store closures and made it clear that our high streets are dying. It’s easier to stay home and browse through Amazon. Retail has been well and truly milked for revenue and this relentless squeeze has thwarted investment leaving most of our town centres with a few deluded, cookie-cutter stores hanging on in desperation.

But let’s end the year on a positive note. Covent Garden may be a silly, over-privileged, tourist must-do, but it is having its heyday right now, and there are lessons we can learn here. At its beating heart is a covered craft market and performance space for buskers that keep it alive and entertaining all year round. Watching all the fun from the stalls is an extraordinary mix of unique stores, bars and coffee shops. Further up the streets are the value fashion houses and the chain-stores, punctuated by vibrant new restaurants. Covent Garden has worked hard to ensure it always has unique designs from the best brands. It is a roll-out free zone. Exchange some of the high end excess for locally grown talent and there’s no reason every high street cannot follow this template.

So, 2019 won’t be the year we put things right, but it might well be the year we finally realise what we want from retail.


Smaller, Smarter Stores
Kate Ancketill, CEO and founder, GDR Creative Intelligence

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It's headline grabbing to be a doom-monger and suggest that 2018 will be remembered for store closures (up 17 per cent in the first 6 months), the decline of anchor department stores and severely challenged high streets. While there's no doubt retail is pivoting, with inevitable growing pains, I think with hindsight we'll see this period as indicative of the shift towards retail built around the smartphone, rather than the car.

Look at Nike’s By You store in LA. It’s stocked based on the interests and purchases of local NikePlus members. Each customer gets a personal welcome and recommendations, and digital integrations allow them to reserve shoes to try on, search the brand’s local inventory and complete purchase in-app.

In 2019 I expect to see more stores like this that are both physical and digital hubs, and that put customers in complete control; allowing them to start, pause and complete their shopping journeys whenever and wherever they want. Alibaba’s Jack Ma calls this 'new retail' – 'the integration of online, offline, logistics and data across a single value chain'.

Former Iceland and Wickes CEO and author of The Grimsey Review, Bill Grimsey, predicts community, rather than retail, will soon become the anchor of UK’s high streets. I fully agree. 21st century retail, because of e-commerce and new retail integration, doesn’t need as much space. Stores will be smaller, but they’ll be smarter, more experiential and micro-fragmented, like US department store Nordstrom’s Local stores. These hold no permanent stock but act more like upmarket click-and-collect changing rooms, with additional hybrid services like tailoring and beauty treatments.

In 2019 we'll see more optimisation of local inventories based on the online behaviours of local shoppers, more fragmentation of formats according to time and location, and more hybridisation.


The Hyper-Relevance of Physical Retail
Oliver Michell, chief creative officer, FutureBrand UXUS

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Physical retail in 2018 is transforming its purpose to answer new consumer shifts. Key trends include fast vs. slow retail, inclusivity vs exclusivity, and empowering the local community. Fast vs. slow retailing combats online commerce, ‘fast’ by offering the same level of immediacy as online vs. ‘slow’, a hospitality-driven approach that immerses consumers in a physical environment. Inclusivity has become aspirational, empowering consumers through a greater diversity of experiences and products in-store. Large brands are also empowering the local community through one-off cultural destinations; bringing unique experiences and services, local design influences, and culturally relevant communications to support the area.

Retail in 2018 is further addressing the issue of locality through data-driven stores, restructuring how brands tailor the appropriate products to local audiences. Local consumer data gathered through digital channels is now able to customise needs to each individual location, creating a seamless omnichannel approach.

In 2019 (and beyond), on-demand flexibility within the store environment will reach new heights to meet the consumers’ needs in the moment. Data-driven formats will go beyond tailoring products to a local audience. A flexible merchandising approach and hyper-customisation activities will tailor the experience to whatever the customer wants. Flexible merchandising enables brands to localise and quickly change visual merchandising of products by understanding what is relevant to the consumer in real time. Product customisation will enable the store to work as a local factory, empowering consumers to actively become involved in the process of creation and curation of their perfect product.


A Renaissance of Place-Making and Commitment to Micro Culture
Stefanie Dorfer, retail editor, Stylus

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2018 shaped up to be the year brands recognised the value of retail grounded in ‘un-consumption’, as part of a wider understanding that physical spaces are touch-papers for brand experiences but don’t necessarily need to be a brand’s transactional backbone.

As part of the advent of softer selling engagement strategies, we started to see retailers using physical spaces as a way to establish micro relationships between brand and consumer. Matches Fashion’s townhouse 5 Carlos Place in Mayfair – the luxury epitome of the soft selling trend – emphasises socialising as much as shopping, and hosts a year-round calendar of events including panels and workshops. We’re seeing this trend play out in the US too with The Phluid Project – a gender-free clothing store – seeing itself as a space for exploring identities, echoing the increasingly non-binary vision of the world.

We expect to see a renaissance of place-making and commitment to micro culture in 2019. London’s Coal Drops Yard, a new, barely-branded breed of mall where space is dedicated to non-product concepts and emerging artisans as well as iconic retailers, is a great example of a destination created with these needs in mind.

2018 was also a year that retailers more tightly embraced gamified entertainment, pushing for an ‘earn’ not ‘buy’ mentality – one of retail’s incoming differentiators in a culture of instant gratification. We saw this brought to life this year through more gamified experiences, including Outdoor Voices encouraging a level of effort via a digital-led scavenger hunt, giving fans virtual access to exclusive pieces along a 5k running route.

Both trends tie into the growing unease regarding the crassness of straight-up consumption, indicating that 2019 will be the year successful brands prove they have an eye on more than just a financial prize.


Store-based data profiling
Rhiannon McGregor, foresight writer, The Future Laboratory

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While the much-vaunted retail Armageddon may still feel very real, in 2019 physical stores that use both design and technology to inspire their customers will not only survive but also thrive. We are seeing forward-thinking retailers like the South Korean eyewear brand Gentle Monster using their floor space to create thought-provoking cultural experiences where brand comes first and product takes a back seat, providing shoppers with a memorable sensory experience.

Future-facing bricks-and-mortar brands will also increasingly personalise the store experience through the use of consumer data profiles. One brand doing this particularly well is Nike, which is using local data to stock shelves and offer smart, seamless shopping across an entire floor of its New York flagship store. Staff stock the shop floor based on what items are selling best online in the local area and shoppers can reserve items through the Nike app in advance of their visit, which are held for them in lockers to streamline the in-store experience.

The opportunity to present customers with bespoke discounts and deals is another advantage of investing in store-based data profiling. Already, consumers want retailers to integrate such systems, with 50 per cent of consumers in the US expressing interest in in-the-moment, location-based discounts and coupons via their mobile device while shopping in-store. These are just some of the trends that we have identified as part of our Future Forecast 2019 where we explore the 50 major cultural shifts that will affect consumer consumption habits over the coming year.

Main image: Nike Live, Melrose

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