With consumer confidence reaching its highest point since 2000 and the NRF projecting holiday sales to increase between 4.3% and 4.8%, 2018 has been a good year for retail. The concept of the “retail apocalypse” is finally being put to bed and replaced with the much more apt “retail renaissance.”
While there were several closures of traditional mainstays who failed to fully adapt to changing consumer needs and expectations, brick and mortar is finding new life through deeply integrated and personalized shopping experiences. Brands that toe the line between the convenience of ecommerce and unique, standout in-store displays are setting new standards around what successful retail looks like.
But as the technology shaping modern retail matures and consumer preferences evolve, we can expect another year of transformation ahead of us. For example, artificial intelligence, social commerce and the role of trust in the purchasing decision will all develop in new ways in 2019.
As the new year approaches, here are a few things we can expect to see from the retail industry:
The Rise of “Smart Personal Shoppers” in 2019
From productivity enablement to voice-search functionality, the practical applications of AI are extending to every aspect of our lives. Within retail and apparel, brands are already integrating AI into their web presence through chatbots to handle customer service inquiries. From a more consumer-facing perspective, Amazon Alexa and Apple’s Siri are spurring familiarity and trust in these applications as a way to create deeply personalized experiences. Setting up recurring, automated orders is a good example.
AI’s ability to drive the types of personalized experiences customers expect will expand in 2019, through the development of “smart personal shoppers.” Startups like Stitch Fix and others have already been experimenting with this, matching AI with human expertise to create fully-tailored recommendations based on style preferences and past purchases. This marriage of AI technology and humanity has significant potential in creating delightful and surprising retail experiences, so expect to see it spread and become more mainstream.
Retailers Will Further Embrace Social Commerce
Earlier this year, Instagram announced it was launching a standalone app for online shopping. While not the first social platform to make the move into ecommerce (think Pinterest or Snapchat), the line between social media and ecommerce is becoming increasingly blurred. The visual nature of these platforms makes them a natural fit for brands’ mobile engagement strategy. The convenience of seeing a product in their feeds and having checkout only a few clicks away is a major draw for consumers.
In 2019, we’ll see more strategic investment in merging traditional advertising and product placement with consumer-generated content (pictures, video, ratings and reviews) on these social platforms. AI will have an impact in successfully deploying this as well, as it enables instant item recognition and recommendations based on posts that are “liked” and matched with specific products. Ultimately, this makes social commerce, as a whole, a more effective and viable sales-driving channel.
Integrated Physical/Digital Storefronts Will Be a Standard
Over the last few years, digitally-native brands have proven you can start a business online and then grow into a physical footprint. The accessibility of ecommerce and social media has eased the process of building a community of advocates around a brand without the need to start with a real estate investment. Look at Away, Everlane or Amazon. These brands are taking lessons learned from their digital roots and applying them to traditional in-store experiences in a way that’s setting a new benchmark for consumer expectations.
2019 will be the year of the fully-integrated physical/digital storefront. Mirroring the convenience of online shopping, brands and retailers will invest in purchase pickup options or smarter in-store product recommendations. Consider an intelligent dressing room – you try on a shirt, and the interface in the mirror identifies what other apparel options match well with that item.
This won’t be isolated to just retail. Cashierless supermarkets, self-driving cars and even banks with tellerless branches will become more commonplace. Fundamentally, it comes down to matching strengths of both online and in store to create a more engaging shopping experience.
Give Consumers the Reins
The modern shopper is more empowered than ever, forcing brands and retailers to work harder to secure and maintain their loyalty. They won’t hesitate to call out those who fail to meet their expectations through social or online reviews.
The latest advancements in intelligent technologies have enabled retailers to further satisfy core needs for convenience and personalization. By putting shoppers first in 2019 and underpinning these experiences with the right set of solutions, organizations will be primed to foster long-term relationships with a diverse audience of customers.
Fritz Hesse is Chief Technology Officer of Bazaarvoice