As the holiday shopping rush settles, many retailers are ready to look forward and see what retail trends and innovations may be on the horizon for the year ahead.
The National Retail Federation Weighs In
Matthew Shay, president and CEO of the National Retail Federation, says 2018 was a historic year for retailing, but 2019 still presents many new opportunities for retailers to capture.
In an article posted to LinkedIn, Shay says retail sales grew 4.8 percent in the first half of 2018 versus the same levels a year previously. He says the retail market has expanded for nearly a decade, starting in November 2009.
“While the overall economy has supercharged gains,” Shay writes,” make no mistake: Retail’s success is the result of investment, innovation, hard work and vision.”
Shay believes 2018’s strong retail momentum will carry into 2019. He outlines a few challenges all companies will face in the new year—possible trading obstacles with China and the threat of rising interest rates—but says there will be plenty of opportunities to succeed in 2019.
He cites data from a Wall Street Journal survey in which economists forecast economic growth between 2 percent in 2019 and 2020. The survey also says unemployment will remain low, “supporting continued consumer confidence and retail sales,” Shay writes.
“In short, the markets will do what they do, but retailers will do what they do: Stay laser-focused on delivering results for their customers, employees and investors.”
Monitoring Tech and Shifting Consumer Preferences
An article posted to Dallas News, a website powered by The Dallas Morning News, outlines how tech innovation and changing consumer habits are influencing the overall retail sector.
According to the article, online sales totaled $526 billion in 2018. That figure is expected to grow to $893 billion by 2022, and represent roughly 15 percent of all retail sales.
New technology like smart speakers enabled with e-commerce capabilities are also changing how consumers shop. Though the overall percentage of online sales made through these devices remains small (just 2.1 billion in 2018), the article expects more consumers to make purchases via smart speakers in the years ahead.
2018 saw lots of movement in retail store openings and closings.
Discount retailers saw new opportunities in 2018. Dollar General opened roughly 900 stores in 2018 and Dollar Tree opened roughly 276 new locations, according to the article.
On the other hand, Toys R Us closed 881 locations, while Walgreens closed about 600. Nearly 500 Sears and Kmart locations closed in 2018, the article states.
“Great retailers have always been focused on the customer, but now with technology, there’s been a rapid shift of what’s possible,” says Sarah Engel, chief marketing officer of DynamicAction, a retail analytics company. “We’ve given brands information about us and now they need to use it in ways that reflect a better level of customer understanding. Customers want a highly differentiated experience they can’t get anywhere else.”