Let’s turn the conversation to retail.
How did it fare in 2018? Where is it heading this year and next? Is brick and mortar really dead?
I sat down with Somraj Choudhary, a Practice Partner at Wipro, who is directly responsible for leading key retail consulting practices, nurturing customer relationships and driving innovation-led sales. We talked about the latest developments and hot trends in retail, and he shared his predictions for 2019 and beyond. To learn more about Somraj's experience and expertise in Retail, visit his LinkedIn page.
Retail is undergoing a radical transformation as Millenial and Gen Z shopping behaviors continue to evolve. These generational buyers have unprecedented purchasing power and present high-impact opportunities to retailers who are able to reach them.
So whether you’re looking to invest in your associates or really know your customers, here are a couple of trends that are set to dominate 2019:
1. Digital Convergence
The thing about retail is that it's constantly changing - evolving customer identities and the increasing retail power of Gen Z shoppers will continue to inspire retailers to experiment with their customer journeys. You can expect to see more and more retailers adopting a digital mindset when crafting customer journeys within an omnichannel setting. As more journeys begin at home and have multiple store touchpoints, we’ll start to see the rise of experiential shopping and connected ecosystems bridging the gap between physical and virtual spaces.
2. Growth in Smaller Format Specialty Stores
Smaller format convenience stores are a driving force of growth for big-box retailers, enabling them to enter new markets. Additionally, the store-within-a-store format continues to be popular among beauty and health retailers. Smaller store formats will continue to grow as convenience becomes a key battleground from big-name players in retail.
3. Associates as Key Differentiators
Most big-box retailers have refocused in-store associates time and energy on customer engagement. From merchandise delivery to helping customers find products they’re looking for and offering relevant suggestions, associate enablement through technology is increasingly becoming a swipe or voice command away in 2019.
4. Really Knowing Your Customers
Customer behavior continues to be elusive, but technologies and data exist to better predict shopper behavior across multiple context and channels with high probability. With shoppers willing to share data in exchange for personalized recommendations, convenience, and lifestyle guidance, 2019 will see more investments in CRM and customer-focused analytics.
5. Narrower Assortments, More Private Labels
Whether it’s "Simple Truth" by Kroger or "Craftsman" by Lowe’s, retailers have discovered the allure of private labels. They give them more control, higher margins, and more leverage over consumer goods companies. As retailers focus more on private labels and look for ways to cut costs, you can look forward to narrower assortments, a lot more private labels, and aggressive marketing around ‘friendly neighborhood brands.’
6. Smart Supply Chains
Retailers have invested a lot in making supply chains more responsive, intelligent, and adaptable as they continue to struggle to fulfill the front end digital promises. These investments will continue to increase and become even more transparent and efficient with the integration of artificial intelligence.
7. Hyper-efficient Operations
Retail operations are becoming smarter, more predictable, and structured. However, retailers are struggling to contain costs of omnichannel operations which aren’t always profitable and ever-changing. Picking in stores, deciding the best mode of last mile delivery, providing the “perfect order,” and handling returns continue to be hurdles. In 2019, you can expect retailers to spend much more on building long-term assets to solve these problems. Areas like demand and channel forecasting, process automation, and route optimization will become the big next challenges for AI platforms.
Customers are moving towards healthy sustainable choices that are cost-effective and easily available. But there is a looming threat of cyber attacks, dissuading people from sharing their identities. As retailers look at ways to engage customers in 2019, trust is absolutely essential. Whether it’s protecting customer data, providing better quality products, or greater transparency in event of a breach, you’ll see retailers becoming more proactive about in-store and online security.
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