When 2019 ended, we asked retail industry experts for their 2020 predictions. At the time, they cited innovations like retailer media networks, voice shopping and data portability.
No one foresaw the global pandemic that has upended consumers and brands alike, so just about one-third of the way through the year, those predictions are already (arguably) outdated. That’s why we went back and asked: Knowing what you know now, what do you think is in store for retail in 2020?
Here’s what they said:
Expect to see more contactless transactions.
It’s probably music to Jeff Bezos’ ears as he attempts to sell Go technology elsewhere: Anindya Ghose, professor of business at New York University’s Stern School of Business, said cashless transactions are going to get a boost now.
“Because of the pandemic, retailers will quickly adopt mobile payments and other forms of electronic payments,” he said. “Contactless payments will now be the norm for retailers in many countries around the world.”
In addition, Michael Mothner, CEO of digital marketing agency Wpromote, said new retail models like Trunk Club will surge because it’s personalized contactless shopping in which subscribers receive orders at home and return what they don’t want.
The total addressable ecommerce market will grow.
Pointing to China, Ghose said data shows the number of consumers who shop online will remain inflated even after the crisis as more people are exposed to the ease and fun of online shopping.
Mothner agreed, noting the households that previously took weekly trips to the store have been forced to try new things, and those habits will remain even after the pandemic subsides.
Fulfillment models will change.
As foot traffic at brick-and-mortar locations falls and retailers seek to maximize online purchase options, Ghose said they may have to adjust their order fulfillment models.
“The logistics involved in delivering goods and services could prove overwhelming for many retailers,” he said. “They may have to … [increase] the workforce in charge of ecommerce operations. They need to meet unpredictable surges in demand.”
Promotions and experiences will abound.
Mitchell Yoo, global chief client officer at digital marketing agency iCrossing, on the other hand, anticipates what he calls a “retail resurgence” when stir-crazy consumers can finally leave their homes and stores lure them in with “a variety of offers and sales when they are safe to open their doors.”
“Because entire populations are sharing in these desires to connect, to gather, to return to old rituals, businesses may find the market quite crowded with promotions,” he said. “Further, many people will find a simple walk in the park or visiting a loved one to be novel and exciting, so brands will have to try new and creative ways to capture their attention. One thing is for certain: This period of retail resurgence will bring with it an overload of experiences.”
(Mothner said malls “are even more dead than before,” but agreed shopping experiences will thrive.)
Online pickup, particularly grocery, will be light-years (OK … five) ahead of where it would have been otherwise.
According to figures from Jeff Malmad, executive director of media agency Mindshare’s data-focused unit Shop+, online grocery saw five years of trial and adoption in four weeks.
“The retail shopping experience based on the area of the country you live in can be surreal, so the adoption and deployment of what grocery retailers are doing now with online pickup and delivery is critical not just for the consumer experience, but how well those brands will be perceived when we come out of this pandemic,” he said. “Moving forward, this is a retail category that in many ways has changed for the long term.
Simon Poulton, vice president of digital intelligence at WPromote, agreed the retail industry is likely to see a much faster, larger-scale adoption of offline pickup options but noted retailers will have to make it easier for consumers to pick up online orders wherever they want to offline.
Big brands will move into DTC.
While Mothner expects to see digital natives shutter their retail experiments and return to their online roots, others expect to see new entrants to the direct-to-consumer space.
According to Marissa Allen, managing director at WPromote, that includes large manufacturers, who will invest in their own DTC channels to be less reliant on third-party retailers like, oh, I don’t know, Amazon?
“There was already a trend in large manufacturers like Nike and Whirlpool to sell more [DTC], but this will expedite progress,” she said.
This, said Janine Flaccavento, senior vice president of media solutions, new stream media and eretail at performance marketing agency Merkle, reflects the sometimes tense relationship between retailers and brands in which retailers have owned customer data and the shopping experience while brands were at their mercy.
“Manufacturers are being asked to play by the retailer’s rules with little access to data about the consumers and shoppers. I think that this is going to shift in 2020,” she said. “We’ll see more CPG and brand manufacturers developing their own database so they can start to reach their consumer directly, quite possibly kick-starting or accelerating direct-to-consumer brands.”
The results will be a more equal relationship as both retailers and brands find ways to improve the shopping and loyalty experience and become more relevant in the lives of consumers, Flaccavento added.
Livestreaming and social commerce are here to stay.
Videoconferencing has certainly gotten a big shot in the arm lately, and Poulton expects to see more integrated communication and livestreaming functions from retailers to continue as they seek to facilitate more human interaction during the sales process.
“Historically, live chat features have fallen short of expectations due to resource limitations, and/or a poor AI experience, but the focus for many consumers will now be online, and these websites need to work for all types of consumers, not just the most digitally savvy,” he said.
Allen, too, expects to see new ways to connect with consumers, like enhanced chat and messaging functionality.
In addition, Poulton said, we’ll see an increased focus on selling through messaging platforms, which also follows what we have seen in Asia as consumers “ultimately [turn] to social platforms [as] showrooms and initiate purchases directly within the same app.”
Retail will—or, then again, maybe won’t—become more convenient.
Allen said retailers will have to identify ways to lighten the load on customers and make purchases easier, like extending return policies.
“Moving into remaining 2020 and beyond, these enhancements are no longer optional, they are mandatory for survival,” she added.
Deborah Weinswig, CEO of advisory firm Coresight Research, however, said she expects to see retailers move to a zero-return policy: “You buy it, you own it.”
Store closures will continue.
Weinswig also anticipates continued mall vacancy rates—and 45,000 permanent store closures.
Tyler Higgins, leader of the retail practice at management consultancy AArete, called this the continuation of the “famine or feast environment where Walmart, Target and Amazon continue to expand their footprint and market share, while mall-centric retailers will continue to decline or disappear.”
“I expect the rest of 2020 to be a combination of store closures, bankruptcies and a hesitation of consumers to respond,” he said.
Tech offerings will follow.
Finally, Poulton said, we’ll likely see an influx of technology offerings aimed at helping retailers quickly scale up or down during times of turbulence.
“The nature of agility here is not limited to products created. Rather, all aspects of a business need to be able to pivot quickly,” he said. “The ones that make these adjustments will certainly show the greatest resilience moving forward.”