Editor's View

Mid-Year Temperature Taking

As the mid-point of 2019 has just passed, there is still time to act on retail experts’ trends and predictions for the year. Greg Petro offered pearls of wisdom in “10 Predictions For Retail In 2019,” posted on forbes.com, Jan. 4, 2019, couched in the belief that every challenge presents opportunities for action that can lead to success. Here are highlights:
• It’s time to fully embrace the science of retail to satisfy customer wants.
2019 will see the science of retail becoming a major driver in what to sell. Intuition, gut feelings and third-party marketing data will be left in the dust in favor of “zero-party data” as well as analytical tools.
Petro defines zero-party data as information intentionally provided by consumers. A demand for personalization among consumers has been accompanied by concerns about invasion of privacy. Petro cites a survey that reports “64 percent of consumers are fine with retailers saving purchase history and personal preferences if more personalization is offered.” This type of consumer-sanctioned data collection enables personalization and a sense of privacy to co-exist.
Analytical tools are increasingly in vogue to create sellable assortments. Petro notes “Amazon’s assortment decisions are made using data and ‘bots’.”
Petro also states that customer-centricity will be mainstream. Monitoring social media isn’t sufficient. Retailers need to establish a complete picture of their customers and act on it using analytical tools. Acccording to Kalypso’s 2019 Digital Innovation Research, competing only on price or product is a “losing proposition.”
• “Small” is the new big thing.
According to Petro, at a time when traditional large retailers are closing stores, niche and digitally native brands are poised for growth. A study by Retail Dive reports tradtional brick-and-mortar retailers are closing approximately 7,000 stores and opening only about 3,000 stores (most in the value category) in 2019, while digitally native brands will open more than 850 stores over the next five years. The good news for traditional retailers is that through creative partnerships, they can work together with online brands to establish win-win selling relationships.
• Retailers need to satisfy both younger and older generations.
In 2019, Millennials outnumber Baby Boomers by one million. Though the spending of retired Boomer consumers is expected to decline by more than 35 percent, that generation still makes up a significant portion of the purchasing public. Since the younger and older generations think and purchase differently, the challenge for retailers is to develop assortments that satisfy the wants and needs of both.
Petro writes, “By 2025, Bain & Co. forecasts Millennials and Generation Z will represent 45 percent of the global personal luxury goods market.” The brand marketing to attract Millennials has to break with traditional concepts that worked for Boomers, such as shifts “from celebrating their own heritage to celebrating consumers’ passions; from looking obsessively into their past to providing futuristic aesthetic visions; from ‘shouting their name’ to enabling consumers’ self-expressions.”