Innovations That Matter

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9 Retail Trends to Look For in 2020

Innovation Snapshot

Expect to see brand touchpoints diversify whilst digital and physical worlds continue to overlap.

The influence of generation Z is causing consumer expectations to become limitless — gaming is being incorporated into mainstream entertainment and 24-hours-deliveries now lead to impatience. These individuals (ages 13 to 22 years old) are hyper-connected, opinionated and deeply concerned about social and environmental rights. This is a cohort that has driven marriage equality, body positivity and gender-fluidity, and retail is evolving likewise.

From sonic-branding and virtual-shopping to nomadic retail, here are 10 retail trends to expect in 2020.

1. Beyond Digital Frontiers Into Transcendent Retail 

Photo source: Yoal Desurmont on Unsplash

Virtual, augmented, personalised and embedded in the human, retail is surpassing traditional shops and screens. The traditional online experience is no longer enough. Advances in technology are allowing retail to jump off the screen and become a fully immersive sensory experience.

The Danish Lego Group demonstrated the potential of augmented reality (AR) shopping last February with its London pop-up shop. The store was completely empty, except for a large Snapcode. Shoppers snapped a photo of the Snapcode to unveil the “real” shopping experience through AR. They then walked around the empty space, viewing a virtual shop via their phones.

CoverGirl recently opened a high-tech 10,000-square-foot “experiential makeup playground” in New York City’s Times Square. Customers are greeted by Olivia, a hologram powered by Google’s artificial intelligence technology. Olivia directs customers to products, shares in-store promotions and answers questions.

Customers are increasingly expecting retailers to link the online and offline worlds. Not only does this allow experiences to be more enjoyable, but it also harnesses the customer’s eco-friendly values. Lush’s all-naked concept store in Shinjuku, Japan, has replaced all signage, ingredient lists and price tags with digital packaging. Shoppers can use the Lush Labs app to access the icons and videos that are used in place of the traditional elements. Best of all for visitors stopping by at any time of day or night is the interactive window. Using the app, customers can learn about and buy the products in the store’s windows. 

2. Sonic-Branding #ASMR

Photo source: Elice Moore on Unsplash

Having a unique and bespoke sound is becoming an important part of brand image. Recent years have seen a phenomenal rise of ASMR-based marketing (autonomous sensory meridian response): the body-tingling, peaceful and calming sensation caused by hearing certain sounds.

Until now, ASMR has mostly bee exploited by the food industry. Bacardi’s current “Sound of Rum” is a classic example: a music track that captures clinking bottles, ice shaking, and cocktail pouring. However, the awareness of ASMR has also influenced retailers to shift away from loud, frenetic and overstimulating ads to ones that are quieter and more relaxing.

Cosmetics brand Lush collaborated with Youtube-influencer ASMR Darling to produce a sponsored video that goes through an evening skincare routine featuring Lush products. In the video, the Youtuber whispers softly whilst she describing each product, taps, scratches the containers and drops bath bombs into fizzling water. 

Gucci also gave an ASMR twist to its #24HourAce campaign. The campaign sponsored multiple artists such as motion designer Esteban Diacono and Oh Jia Hao, to create ASMR videos inspired by their Ace sneaker. The latter’s video is currently Gucci’s most viewed and liked Instagram video this year and has over 2 million views.

3. Civic Marketing

Photo by Levi Saunders on Unsplash

Civic marketing is the ultimate customer-centric strategy, it can humanize a brand and enhance its credibility. “Customer is at the heart of product development, customer is at the heart of strategy and customer is at the heart of the sale,” Glossier’s president and chief operating officer Henry Davis told Marketing Week.

It’s not just about banning “unhealthy, thin-models” — that’s so 2018. Most people don’t look like models. That was the idea behind startup Sozie, an app that pays people to try on clothes to help online shoppers. Individuals can sign up through the app to be a “model” by uploading their measurements. Whenever a retailer needs someone with those measurements to try on a garment, the app alerts lookalikes near to a store selling that item. The lookalike tries on the piece in question in-store, then uploads pictures of herself in the garment and answers some questions about how she felt about the product.  Online shoppers with similar measurements can then use this information to judge whether the clothing will fit before they order. 

Likewise, research by Ipsos Mori has shown that only 2/3 of Generation Z identify as “exclusively heterosexual.” In October, the Phluid Project launched the first gender-free retail store. Founded by Rob Smith, whose 30 years of experience in the retail industry includes stints with Levi’s and Macy’s, the Manhattan store aims to go beyond retail to challenge binary constraints. Among the store’s unique aspects are gender-neutral mannequins with no distinguishable features. It also has its own sizing system to help ensure its clothes fit all customers.

4. Shopping By Values

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Value-driven shopping is increasingly part of the retail equation. When deciding between brands, 83 per cent of consumers report picking the one with the most sustainable profile. Likewise, 70 per cent of customers are willing to pay more for brands that help protect the environment or support fair working conditions. 

In September 2019, Procter & Gamble — the multinational consumer goods corporation — announced an exciting new partnership with National Geographic. The project is a six-part documentary focused on inspiring global activism. The documentary isn’t tied to retail or brands, rather, its aim is to simply upgrade the company’s ethos.

Elsewhere, outdoor clothing company Patagonia opened a pop-up café in central London, offering visitors the opportunity to “learn how to make a positive difference”. The pop-up, called Action Works Café, curated climate activist training courses, workshops on topics such as carbon literacy, habitat conservation and non-violent protest. 

Consumers care just as much about the impact of brands as they do about the actual product. However, it’s not just about elevating ethics. It’s about adapting to make it easy to shop purposefully. For example, Brandless, a popular retail platform, now categorizes its products by value. Customers can filter their search to products that are cruelty-free, tree-tree or biodegradable. 

5. Social “Me-tail”

Photo source Maddi Bazzocco on Unsplash

With nearly 40 per cent of the world’s population engaging in some form of social media, it’s no surprise that social media has revolutionised consumer behaviour. According to Retail Dive, 80 per cent of Generation Z and 74 per cent of millennials report that social media influences their purchases. 

American beauty brand Glossier harnessed the power of user-generated content as part of a successful social media marketing strategy. By reposting images, videos and product takes from their social media followers and offering other incentives like free product giveaways to brand loyalists, it has created an army of what are known as “Glossier Girls.”

In November, Chinese e-commerce platform Tmall hosted a live stream chat with influencers Viya Huang and Kim Kardashian, viewed by over 13 million and selling 15,000 bottles of Kardashian’s perfume. 

Platforms like Instagram and Snapchat are merging the line between discovery and purchase. In 2018, Instagram eased the path to purchase with a tag-feature that allows users to tap and navigate directly to the brand’s website. Instagram also released an in-app payment option for users to link a credit or debit card to their account.

Now, with platforms like Beautystack, if a viewer likes a post featuring someone’s latest look, they can connect with the professional behind it. On the other hand, Snapchat has embraced shoppable augmented reality (AR). The app now hosts advertisement with AR lenses for users to virtually try on products. 

6. Anti-Excess Consumerism – The New Norm

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By 2022, the second-hand clothing market is expected to become bigger than the luxury market. According to BCG, second-hand luxury sales are: “predicted to grow at an average yearly rate of 12 per cent, compared to a 3 per cent average for the traditional luxury market”.

Amidst product fatigue, Millennials and gen Zers are craving antidotes to our excessive consumeristic culture. Over 70 per cent report placing greater importance on the social and environmental impact of their purchases.  

This anti-excess movement is illustrated by the growing trend that sees Japanese millennials buying second-hand make-up. The Business of Fashion reported in August 2019 that Japanese millennials are buying used make-up products by brands from RMS to Chanel, primarily through the peer-to-peer marketplace Mercari. 

The emerging anti-excess movement is even disrupting high-end department stores. Selfridges in London hosted a pop-up concession for Depop, the peer-to-peer second-hand marketplace. In June it also launched a Project Ocean Beauty Booth highlighting ways to reduce and recycle bathroom products. 

7. Nomadic Retail

Photo source Turnbull & Asser

Worth over €45 billion, “Nomadic Retail” is on the rise. Pop-ups have already demonstrated how this flexible model can offer millions of possibilities.

According to Leslie Maunsbach, Co-Founder at xNomad (a marketplace for short-term retail space connecting brands and e-commerce stores) “pop-up shops allow you to test your products, try new locations, and reach new consumers while boosting brand recognition and awareness”. 

For three days in November, the London boutique Browns Nomad turned an abandoned supermarket in Berlin into a high-concept retail store bringing together music, fashion, and art. Described as a ‘unique retail roaming experience’, the pop-up hosted palm readings by Truth And/Or Consequences, tattooing by Louis Loveless, and panel talks with Vogue Germany. 

Pop-ups also allow for interesting coalitions. During Christmas, six British brands and crafts businesses partnered with the traditional shirtmaker, Turnbull & Asser, to open a refugee-led gift shop aiming to raise charitable funds.

True & Co. even took their mobile retail store on the road for custom bra fittings. Inspired by the tiny house movement, think Bento box/Origami on wheels.

8. Gal-to-Gal: Your Branded best Friend

Photo source Freeda

According to JWT’s “Female Tribes” research:  77 per cent of women claim to make the majority of household purchasing decisions, and 85 per cent are not happy with how they are depicted and addressed to by brands and businesses.

The research also revealed that women feel businesses don’t really “get them”, with 64 per cent of women preferring female-designed products because “they better understand our needs”. Therefore, it’s no surprise that women are becoming more likely to start a business than men, according to the SCORE Women Entrepreneurship report

Through intimate social-media connections and female empowerment, female-founded companies are becoming branded girlfriends. The movement goes beyond retail in that women become more than customers, they are part of a community. It’s no longer about the product, it’s also about supporting the story of the CEO and female entrepreneurship.

For example, Freeda, the female-focused media powerhouse already in Italy, Spain, and South America, is expanding into the UK and will offer retail goods in 2020. Freeda says its content engages with 5 million women visitors every day. It targets Gen Z – and Millennial-aged women, publishing female success stories, branded content and campaigns for partner companies.

9. Hyper-Personalized Products

Photo source P&G

One of the latest trends in retail experience is allowing customers to design their own products. This could influence the industry more broadly, with customers willing to share intimate data for a more bespoke experience.

According to a report by Deloitte, 34 per cent of consumers would like personalized products or services, and 48 per cent are happy to wait longer for them. 

German startup Skinmade illustrated this when it launched Skinmade in April 2019, promising bespoke face cream in just seven minutes. The entire operation is handled by a computer and self-learning algorithms, which measures the hydration and elasticity of each customer’s skin type. It then adds specific amounts of ingredients to the face cream based on the client’s individual needs.

Likewise, L’Oréal, through its skincare brand, La-Roche Posay, is piloting a patch-like sensor called My Skin Track pH. The tiny device reveals your skin’s health in minutes and helps identify suitable skincare products.

However, as customers become comfortable with exchanging personal data for solutions, the move towards highly-personalized services is spreading from health to more general retail.

UK’s Metail platform uses AI to find clothes that truly fit. MeModel takes a few measurements from customers and uses its machine-learning algorithm to suggest accurate and personalised style and size recommendations.

In a similar fashion, San Francisco and Hong Kong-based company Unspun uses a 3D infrared scanner to measure clients for their jeans. The scan, taken by Fit3D scanners, takes 20 seconds and collects 100,000 data points. That data is then used to tailor jeans based on the customer’s exact measurements, reducing waste. 

Written by Katrina Lane