The rapid advancement of technological innovation has brought a few interesting changes to traditional brick-and-mortar store-fronts over the past decade. These changes have brought shifts in attitudes, consumer preferences, and retail demographics; even though the market has been kind to retail in the past year, growth is dependent on how fast companies are willing to adapt to the changing landscape. The predictions are clear for 2019: the new market will be determined by a battle for e-commerce dominance, shifts in shopping culture and methods, and an evolving interaction between customer and brand.
Brands and Culture Will Be Synonymous
Brand identity has never been more important than now; by enmeshing themselves in popular culture, fashion, news, and entertainment, major companies can solidify themselves as a lifestyle brand. Take Red Bull for example: their tendency to sponsor extreme sporting events has made them much more than just an energy drink manufacturer. They are known for their event, music, and entertainment promotion just as much as they are known for their product. Engaging customers outside of traditional advertising methods and shopping parameters can help a brand solidify themselves as a cultural icon.
Due to the internet, Millennials have a highly developed social consciousness and sense of social responsibility. The takeaway? Customers are shopping with their emotions. Take the emphasis off of the wallet and into the heart of the consumer; a company should no longer sell a product, they should sell the culture behind it.
Faster Shipping for E-Commerce Stores
Amazon set the standard for shipping times; with Amazon Prime – a highly affordable service – customers can receive the majority of items on their store within 2 days of online purchase. To compete with Amazon, other companies are forced to drop their shipping times to stay in business. While drone delivery services may not be on the horizon (due to a host of air traffic control issues), you can expect faster shipping times from retailers in all industries.
Stores are turning more-and-more into elaborate showrooms. Samsung spent $43 million for a Manhattan “pop-up” of interactive art, coffee lounges, a recording studio, and a virtual reality experience. Red Bull spent over $65 million to drop a man out of a space balloon, which was livestreamed to millions of people on YouTube. The new generation values experiences over products, so retailers would be wise to quickly follow Millennials’ lead. Technology has changed consumer preferences, and online shopping has reduced the need for people to visit an actual brick-and-mortar. Think social media, online shopping applications, and mobile apps that have nothing to do with the purchase of products but rather the experience itself.
This sector of the retail industry – subscription services – has grown from $57 million in sales to more than $2.6 billion from 2010-2016. Over 15% of online consumers signed up for an online subscription service in 2018. What’s in it for the consumer? Subscription services offer convenience, a tangible benefit, and a personalized offering all without the consumer leaving their home. Trends like this have contributed to the slow decline of major brick-and-mortar retailers, such as Sports Authority. An online presence that sets a company apart from others is necessary in this malleable environment. As for subscription services, it’s Christmas every… month.
Multi-Channel is the New Norm
Different demographics have varying spending habits. Millennials love buying products on Snapchat and Instagram. Nearly a quarter of Baby Boomers shop on Facebook, and 12% of Gen-Z shops on the social media giant. The majority of baby boomers choose to spend their time in brick-and-mortar and Amazon. This means that companies need to cover their bases on all fronts: websites, social media platforms, TV advertising, physical advertisements, and radio. Marketing on multiple sales platforms can result in massive dividends if done correctly.
2019 Retail Industry Trends
The times, they’re… always changing. It’s up to companies to follow suit with their customers’ evolving demands and needs. This means multi-channel advertisement, growth of experiential commerce, an increased emphasis on ecommerce, shipping times, and brand culture. At the end of the day, things aren’t getting harder for brick-and-mortar, their challenges are simply fluctuating based on specific changes in technology and culture.