How will retail change and develop in 2019? We hear from industry insiders and share their predictions for the year ahead. This is the final instalment in this Predictions 2019 series that has run throughout January. Today we’re looking ahead to new approaches to selling, from a focus on services, to social commerce and payments
Move to services – and collaboration
David Nicholls, retail and hospitality CTO at technology business Fujitsu UK
Driven by the need to deepen customer relationships and foster growth against a backdrop of retailers struggling to differentiate themselves from one another, in the coming months we will see retailers evolve to offer services alongside their product offerings. The move to services will provide retailers with both higher margin and revenue growth opportunities and deliver an improved, more tailored customer experience for the increasingly time starved consumer.
In 2018, collaboration between retailers grew as we saw the likes of Sainsbury’s and Asda, Tesco and Carrefour begin to forge partnerships. Over the course of the next year, we will see an acceleration of retailers partnering to deliver a more curated customer experience to make big box retailers a shopping destination once again. Retailers will combine operations for shared beneficial services to deliver lower operating costs and allow these savings to be passed onto the consumer.
New, flexible, business models
Alan Treadgold, retail expert at innovation and transformation consultancy PA Consulting
Expect the continued strong emergence of new, innovative businesses that challenge the status-quo with more flexible approaches and deeper customer engagement. I expect to see a lot of activity focused on getting closer to the customer through personalisation initiatives and delivering products and services much closer to the point of need. I think that by the end of 2019 it’ll be even less clear what the distinction is between many retail, consumer products and technology companies as they all seek to occupy much of the same space.
The trend towards social engagement
Rachit Khare, VP, client solutions (analytics) at procurement, analytics and research specialist The Smart Cube
Increased usage of Facebook, Snapchat, Pinterest and Instagram to make purchases has been of keen interest to many retailers. With YouTube and Twitter being actively used to influence, engagement on these channels has become more important than advertising. 2019 could also see increased use of chatbots on apps, websites and messengers to provide a differentiated experience to consumers. With an understanding that consumers are likely to spend more on the brand they interact with on social media, retailers are likely to see an increase in share of sales coming from social commerce.
…and social selling
Andy Burton, chief executive at digital commerce consultancy Tryzens
Finding products and shopping from social media platforms like Facebook and Instagram will become more popular in 2019, supported by the kind of innovations that Instagram launched in March 2018, a feature which allows brands to tag up to five products in a post, displaying product information like price and purchase links. Recent research from PwC has underlined this trend, revealing that social networks are the number one choice of online media that survey respondents used to find inspiration for their purchases.
Expanding premium and discount retailers
Andrew Westbrook, head of retail at business advisors RSM
We anticipate premium retailers and discounters will continue to expand and take market share from established mid-range players in 2019. Consumers will trade up to affordable luxuries with a focus on lifestyle and beauty brands such as Gymshark and Birchbox, whilst continuing the love affair with the discounters such as Aldi, Lidl and Matalan. In the current environment, those businesses that focus on their core offering and technology will win out. We believe this will be at the expense of established mainstream brands.
DNA is the future
Angus Burrell, general manager, UK, omnichannel solutions at international payment solutions company Valitor
Contactless payments are reported to exceed all other forms of payment this year, a trend that is set to accelerate in 2019 with contactless being available on more and more devices. But retailers need to have their eye on the next trend so that they won’t be left behind when it becomes mainstream. With consumers becoming increasingly comfortable with fingerprint and now facial authentication, customers are now much more open to using biometrics to authenticate transactions. Forget PINs and passcodes, DNA will be the future of payments and it will happen sooner than we think.
Customers will be more concerned about security
Alan Treadgold, retail expert, PA Consulting
Following some very high profile data breaches and at best inappropriate use of customer data, I think retailers should expect their customers to be far more aware of and concerned about how their data is being collected, stored and ‘harvested’. More thoughtful retailers will see this as an opportunity to gain competitive advantage by positioning themselves as custodians of their customers’ interests and backing that up with secure systems and processes.