Leading trends of the retail industry - February 2019 - Qindle

 
Leading trends of the retail industry - February 2019 - Qindle
Retail in 2019
   - Leading trends of the retail industry -
                 February 2019
Leading trends of the retail industry - February 2019 - Qindle
Retail in 2019
As a logical follow up of the CES in   shift in consumers’ spending habits
Las Vegas, the NRF (National Retail    from material to spiritual (going out
Federation) recently ran its new       for dinner, traveling, etc.).
edition in New York City and it
didn’t disappoint our inspiration-     Thus, we have reached a new point,
hungry innovators’ souls. The NRF,     where retail’s purpose and function
another exhilarating show with         have changed. Simply put, it is what
nearly 40.000 attendees and 700        shops can do for the consumer that
exhibitors felt like the perfect       has shifted. Today, consumers
starting point to dive into what the   expect convenience, availability and
future of the retail industry holds.   flexibility from retailers who should
                                       adapt to their hectic lives. They
While many spoke of a Retail           look for excitement and status,
Apocalypse a few years back, when      authenticity and social connection.
a large number of North American       The line between each notion is
retail stores went bankrupt, it is     thin. In sum, today’s consumer
becoming clearer and clearer that      looks for a memorable experience.
we now rather are in a “Retail         It is the relentless quest of meeting
Renaissance”. Some, amusingly,         consumers’ needs that drives the
even call it a “Restaurant             craze in the retail arena.
Renaissance” as we are witnessing a

                                                                 — make it real   Retail
                                                                                  RetailTrends
                                                                                         Trends2019
                                                                                                2019—
                                                                                                    — 2
                                                                                                     CES 2019
Leading trends of the retail industry - February 2019 - Qindle
RETAIL IN 2019

1. Technology-based
experience.
2019 seems to be the year where every pole will start integrating
better, not only with each together but also into consumers’ lives.
Deployment and adoption will be smoother, and we will start
gathering strong case studies where technology proves to genuinely
support and enhance consumers everyday life, in and out of home.

                                                                      Retail
                                                                      RetailTrends
                                                                             Trends2019
                                                                                    2019—
                                                                                        — 3
Leading trends of the retail industry - February 2019 - Qindle
1. TECHNOLOGY-BASED EXPERIENCE

Artificial Intelligence
Artificial Intelligence (AI) has   We can expect such “deep
been once more a topic of          retail” to be not only a new
much discussion this year at       driving force, but also a solid                 EXAMPLE
the NRF. But the real chatter      connector with consumers. We      EATYOURFEED
                                                                                   A few examples of companies
was focused on the                 could easily say that retail                                                              Eatyourfeed

                                                                                   embracing AI in interesting
incorporation of the Big Data      brands know consumers better
                                                                                   ways: EatYourFeed helps
with the power of AI. For years    than they know themselves!                      customers discover new meals
retailers have been collecting     Even more so through the new                    based on their Instagram posts;
precious insights through a        forms of data collection                        Wasteless offers a dynamic
myriad of sources (purchases,      retailers put to work, such as                  pricing technology that adapts
subscriptions, social media                                                        real-time according to in-store
                                   DNA testing (Nestlé Wellness
                                                                                   and market conditions;
likes and shares, impressions,     Ambassador in Japan, for                        Bloomingdale’s latest flagship
GPS locations, etc.), but the      instance).                                      store uses AI to “provide
real value comes down to the                                                       personnel on the shop floor
use companies make of it in                                                        with instant information to
order to create higher in-store                                                    better serve and advise
engagement.                                                                        customers”1 Glynn Davis,
                                                                                   Founder of Retail Insider.

                                                                     WASTELESS                             Retail
                                                                                                           RetailTrends
                                                                                                                  Trends2019
                                                                                                                         2019—
                                                                                                                             — 4
Leading trends of the retail industry - February 2019 - Qindle
1. TECHNOLOGY-BASED EXPERIENCE

            Internet of things
            The IoT is moving beyond the       lifestyle and routine – it goes
            hype. As the connector             without saying that the shop
            between data, AI and               itself, through a presence of its
            technological apparatuses, the     own, should create a full,
            Internet of Things is essential    unique, customer experience.
            to improving both supply           A textbook example of this is
            chain and customer                 Amazon Go, who back in 2017
            experience. As we will see later   gave us a glimpse of the retail
            on in this report, efforts are     of the future – read: retail of
            made towards the                   today – with its cashierless
            implementation of                  supermarkets that are both
            technologies with a genuine        minimalistic and packed with
            purpose of making the              tech. A sophisticated blend
            shopping process easy,             which Microsoft made sure to
            smooth and enjoyable; even         compete with, thanks to recent
            natural. The store is not meant    partnerships with Walmart as
            as a destination per se
                                               well as with Kroger.
            anymore, rather it is part of a

AMAZON GO                                                        Retail Trends 2019 — 5
Leading trends of the retail industry - February 2019 - Qindle
As more and more people use         For instance, while the holy
connected technologies, the         grail of online retailing was
use (need?) of voice command        ranking first on Google, there is
increases as well. According to     now a whole new dimension to
a survey by Adobe last year         it through voice assistants, as
already 30% of voice activities     the customer can simply
are related with online             summon Alexa with one word
purchases. This number alone        and ask it to “repurchase”.
is huge, because as we get                                              AMAZON GO
                                    There are of course many
more and more comfortable,          different valuable data that can
this way of shopping is             be turned into success                     EXAMPLE >
completely reshaping not only       measurement depending on
consumers’ behavior, but also                                                  Retailers are consistently
                                    the retailer’s goals. A few
                                                                               warned against
business revenue models2.           interesting ones could be: in-             introducing technology
                                    store display engagement,                  with no added value. We
With that in mind, retailers will   movement patterns or even the              expect voice assistants to
consequently need to start                                                     offer more individualized
                                    time spent looking at a
                                                                               experiences through
rethinking the way they gauge       product. One thing is for sure:            behavioral and contextual
success. The good old sales per     there is big potential here!               data.
square foot won’t fit our
modern retail world anymore.

                                                                                                            Retail
                                                                                                            RetailTrends
                                                                                                                   Trends2019
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                                                                                                                              — 6
Leading trends of the retail industry - February 2019 - Qindle
1. TECHNOLOGY-BASED EXPERIENCE

Virtual Reality
& Augmented
Reality
#confusedreality. The terms are often
mixed up. It is important to make the
distinction between the two however,
as their primary uses and therefore
use-cases will be different: Virtual is
mostly used recreationally, for its
complete immersiveness (thus mostly
for confirmed gamers) and
Augmented currently mostly
professionally (supporting industrial     EXAMPLE
or medical trainings, which require       Hololens by Microsoft: More recently we also started talking
heavy decision-making, for instance)      about Mixed Reality (MR), which uses projected graphical
until further mainstream adoption.        visualizations that appear to interact with the real world.
                                          Although the latter is for now more of a concept really, we could
Because of the more real-life/social
                                          expect it to gain momentum once the gap between virtual and
nature of the AR experience, we           real translates into a relevant solution for the consumer.
would await to hear primarily about
AR developments this year.
                                                                                            Retail
                                                                                            RetailTrends
                                                                                                   Trends2019
                                                                                                          2019—
                                                                                                              — 7
Leading trends of the retail industry - February 2019 - Qindle
The Trendwatching team defines      stream: think display,
new-tech’s new dimensional          promotional opportunities and
shopping space as a “Magic Point    product placement strategies (it
of Sale”, where “the admittedly     would not be surprising to see a
later than expected arrival of      new type of shelf war to strike
meaningful AR experiences are       soon...!).
all reframing expectations when
it comes to how, where and when     Finally, with the always stronger
customers can engage with your      merge between the off- and
brand”3. One of the categories we   online world, stores are likely to
are the most excited to see grow    reduce in size – as a result of
into this are grocery stores,       logistics and digital efficiency. VR    < EXAMPLE
where competition will obviously    and AR will then play a great role,    The world’s first invisible
be fierce. We already referenced    as they offer the opportunity to       pop-up store by Airwalk: by
game-changer Amazon, but the        “enhance customer experiences          simply using a smartphone,
competition is coming on all        and create value without massive       geolocation and VR, the
fronts. It is likely that we see    physical investments in spaces         brand virtually showcased
                                                                           an ephemeral store for its
more and more AR-powered apps       [which] is definitely something
                                                                           limited edition relaunch of
popping into consumers’             that retailers and their               one of their iconic Airwalk
smartphones to advice and           customers can get excited              sneakers.
escort them in their shopping       about”4.

                                                                                      Retail
                                                                                      RetailTrends
                                                                                             Trends2019
                                                                                                    2019—
                                                                                                        — 8
Leading trends of the retail industry - February 2019 - Qindle
1. TECHNOLOGY-BASED EXPERIENCE

Phygital
Ecommerce and brick-and-          omnichannel approach has got
mortar are no longer battling     its own name, by retail doctor
against each other. In fact,      Bob Phibbs: Phygital.
according to a Deloitte retail
                                                                               INTEL
industry audit, both are          Innovative perhaps, but this
growing at similar rates, with    doesn’t come without its
stores contributing to almost     challenges. Besides supply
half of retail’s whole growth –   chain planning, retailers will
similar ratios have been          face the challenge of figuring
projected for the upcoming        out how to properly infuse all
years (2017-2022)5.               afore mentioned technologies,
                                  so that the store “doesn’t feel
The rightfully demanding          like a lagging piece of
consumer of today expects a       technology”6 nor like a
smooth blend between the          disturbing data hoover7 (cf.
convenience of digital and the    privacy policies).
tactility of physical. This

                                                                    PHIGITAL           Retail
                                                                                       RetailTrends
                                                                                              Trends2019
                                                                                                     2019—
                                                                                                         — 9
Leading trends of the retail industry - February 2019 - Qindle
It is clear to see that the entire industry is looking at
transformative and scalable new technologies to
improve the experience of shopping and thus satisfy
consumers’ not-so-new needs. As we will see in the
second part of this report, some retailers have decided
to adopt another approach to accommodate these
needs: Augmented Humanity . This term used by Glynn
                             8

Davis, founder of Retail Insider, depicts well this new
wave of retail as a service.

                                                            Retail Trends 2019 — 10
RETAIL IN 2019

2. Human-based
experience.
As retailers are reinventing themselves to stay relevant, it is noticeable too
that consumers have themselves experienced some kind of shift. Millennials
(born between 1981 and 1996) are the generation of consumers that currently
has the highest purchasing power and for that reason, it is also a common
retailers’ focus-target population. It is to be noted, however, that Gen-Z is
slowly coming on the radar as their first members are now over 18 years-old.

                                                                                 Retail
                                                                                 RetailTrends
                                                                                        Trends2019
                                                                                               2019—
                                                                                                   — 11
WEWORK

2. HUMAN-BASED EXPERIENCE

A complex consumer target
Millennials are sentimental         “wellness is the new luxury”10.     has moved towards well-being,
shoppers: they are the ones         The recent arrival of the sharing   technology will have to take a
who are willing to pay more if it   economy such as Blockchain          more adapted and supportive
is for a cause, the ones who        and other Bitcoins, emphasizes      role. This shift has completely
want to feel close to the brand     this trend of experiential          changed the rules of marketing.
and co-create products, the         commerce, where consumers           Retailers will have to pay always
tech-savvy and tech early           own more with less. The modern      more attention to consumers for
adopters – but only for tech        consumer, indeed, now shares        who they are, but this time,
with a purpose, the ones who        home (Airbnb), office (WeWork),     individually. The time of
feel responsible to share                                               clustering shoppers by type,
                                    car (Car2Go), even parking
feedback and who rely more on                                           generation or even gender is
                                    space (Parkatmyhouse).
peers than ads: “between                                                over. In that sense, we have
75-80% of people up to their                                            seen a lot of progress last year
                                    Millennials are a very unique
30’s, will make a purchase based                                        in the beauty industry, when
                                    generation for they have grown
on recommendation”9.                                                    Chanel democratized makeup
                                    up in both the analogue and
                                                                        for men with its new line Boy de
                                    digital world. As Yihyun Lin
Millennials aren’t as                                                   Chanel. This feeling of pride and
                                    greatly put into words: “They are
materialistic as previous                                               need of presence and self-
                                    […] making efforts to detox but
generations, as they value me-                                          expression will become more
                                    wanting the full efficiency and
time, and sharable (unique)                                             pronounced this year and
                                    convenience of technology”11. In
memories that will last in time:                                        ahead.                              AIRBNB
                                    other words, as the generation
                                                                                                                         Retail
                                                                                                                         RetailTrends
                                                                                                                                Trends2019
                                                                                                                                       2019—
                                                                                                                                           — 12
2. HUMAN-BASED EXPERIENCE

        The glass box effect
        It doesn’t end there… Retailers will   interactions are “rooted in
        also have to work on themselves –      empathy, genuine engagement,
        perhaps even first. From this          and emotional intelligence”12.
LOOP    pursuit of balance between the         Training and professional self-
        tech and non-tech world, lies a        development plans will allow
               INTEL
        desire to simply address reality.      companies to exceed consumers
        Consumers will value companies         expectations.
        that genuinely aspire to do good
        with or through their business.        As such, as mentalities evolve
                                               towards purer synergies, turning
        As we become always more               transparency and long-term vision
        conscious of fast and mass             into an advantage will ensure
        consumption’s secondary effects        retailers long-lasting profits,
        (intolerance towards wasteful          commercially and more
        practices will keep growing), it is    importantly, with their own
        necessary that retailers work on       audience. Whole food protein bars
        their structure as much as they        brand RXBAR, does this
        would on their brands. Inside their    particularly well, employing a very
        stores, this means having humanly      straight to the point tone of voice.
RXBAR
        empowered employees whose
                                                                  Retail Trends 2019 — 13
Here are some examples of              alternative solutions than to
copies you would find on their         create consumer change. Tom
official website: “This is our         Szaki understood that well when
product.” or “1 Egg White, 27          launching Loop, a zero-waste
Peanuts, ½ Date, No B.S.” or           platform partnering with A-
“Customer service – real               brands to offer reusable
customer service – is one of our       containers for everyday products
core values”. Although this might      ranging from ice-cream to
seem risky, this “no filter”           shampoo. Loop’s packaging and
approach really creates a special      service makes sustainability
and trustworthy bond with the          accessible to all by being as
consumer. This is a clear turning      convenient AND as affordable as
point in retailer’s responsibilities   standard plastic packaging.
and consumers will rely on such        Sustainability is becoming
                                                                               FOR DAYS
companies that help them make          mainstream, however, long-term
better and more responsible            adoption and purposeful impact
choices.                               will come only if retailers        EXAMPLE
                                       operationally think with the       For Days: battling for
It is critical that companies hold     consumer being at the core of      responsible consumerism and
on to such inspirational role,         operations.                        social change. This is the kind
                                                                          of level of commitment
because it is easier for retailers
                                                                          consumers will want to see from
to propose new eco-conscious                                              now on.
                                                                                                            Retail
                                                                                                            RetailTrends
                                                                                                                   Trends2019
                                                                                                                          2019—
                                                                                                                              — 14
2. HUMAN-BASED EXPERIENCE

                                                     Experiential retail
                                                     We have now established that we       cannot explain this better: a 56,000
                                                     are facing a somewhat                 square-foot store worth $43 million
                                                     sophisticated consumer. To            where “the only thing you can buy
                                                     accommodate these ever-evolving       […] is coffee”13. The sole point of the
                                                     requirements retailers went from a    pop-up store was to [impressively]
                                                     sales mentality to a service          display the brand’s latest soft- and
                                                     mentality, pushing themselves to      hardware. The takeover of
ADIDAS WOMEN’S SOUL SISTERS                          have a more layered offer. The        experience in retail is depicting
                                                     experience the customer feels while   quite a futuristic image of what
                                                     shopping and while interacting with   shops might look like in the not-so-
                                                     the brand and its representatives     far-ahead years: we could easily see
                                                     becomes priority, because the         physical stores transformed into
                                                     memory of it will be a long-lasting   cured showrooms, with the simple
                                                     one and therefore more valuable.      function of product introduction &
                                                     Shopping for now and with             testing and market presence. This
                                                     emotions rather than wallets is       example clearly shows how brick
                                                     characteristic from Millennials.      and mortar and ecommerce
                                                                                           complete each other rather than
                                                     Last year, Samsung revealed a pop-    compete with one another.
                                                     up store in Manhattan that just
                              SAMSUNG POP UP STORE                                                             Retail Trends 2019 — 15
2. HUMAN-BASED EXPERIENCE

Hyper-Accommodating
retailers
As retailers roll out seamless        and speed – without that, the
business models that embrace          consumer will simply shop
on- and offline technologies,         elsewhere. Thus, new forms of
radical consumer expectations         payment will gain traction this
emerge. According to PSFK, 54%        year, such as the forementioned
of consumers expect brands to         cashierless check-out of Amazon
implement change within 6             Go’s stores, but also mobile
months and 29% expect the             payment (and other wearable
change to happen within one           accessories: bracelets, rings,
month!14                              etc.), Buy Online Pick In-Store
                                      (BOPIS) or “Buy now, pay later”.
In that sense, two services that      Adopting these services can have
have had a strong development         a boosting effect on sales and
and that have become a given          basket values as well.
today are: payment and delivery.
It is all about choice, flexibility

                                                                         HELLO GOODNESS   Retail
                                                                                          RetailTrends
                                                                                                 Trends2019
                                                                                                        2019—
                                                                                                            — 16
< EXAMPLE

                                                                                                   These brands recently brought this to
Billy Harry from Afterpay says “Giving                                                             the next level: Stella McCartney and
your customers the option to pay for                                                               its London flagship store which has
their purchase over time means they                                                                the “cleanest air of London” thanks to
can buy more of what they want                                                                     its air purifiers removing airborne
                                                                                                   pollutants and traffic fumes;
while being able to budget”15. On the
                                                                                                   Morrisons’ “Quieter Hour” put in place
delivery topic, the craze is real: we                                                              for autistic shoppers in many stores
are now talking about super-express                                                                across UK where music is turned off,
30-minute delivery with Alibaba’s                                                                  sounds are reduced and lights are
Hema supermarkets, or automated                                                                    dimmed for an easier shopping
                                                                                                   experience; Microsoft’s Xbox Adaptive
delivery vehicles like PepsiCo’s Hello                                                             Controller where both product AND
Goodness snackbot, an automated          XBOX ADAPTIVE CONTROLLER
                                                                                                   packaging are especially designed for
outdoor and self-driving robot                                                                     people with disabilities.
(tracked via app) bringing you a
selection of food and beverages.                                                                                  ALIBABA SILICONE SCREEN OVERLAY
                                                       EXAMPLE >
Strengthening the relationship on all                  Alibaba’s silicone smart screen overlay
channels is vital to keep consumers                    helping visually impaired people to shop.
                                                       With the world’s population aging, caring
captivated and engaged with the                        and adapting the brand’s offer to
brand, no matter how, when or                          dependent people and elderly is going to
where, as long as processes are                        be a necessary qualitative step to take.
homogeneous.

                                                                                                                           Retail
                                                                                                                           RetailTrends
                                                                                                                                  Trends2019
                                                                                                                                         2019—
                                                                                                                                             — 17
Retail in 2019
Understanding what drives         really start to pay off this year
consumers and how to target       with traction and engagement
them efficiently is primordial    with the consumers. […] We
before going into any digital     were maybe a little ahead in the
tech-development. Technology      curve in starting to talk about
is meant to be used as an         that, we’ve really seen it this
optimizer of internal processes   year”16. Thus, 2019 will mark a
and with the goal of adding a     turning point, where we won’t
real benefit to the consumer.     be only talking about testing
                                  anymore, but doing.
2019 will be an exciting year,
where we will see all these       Here at Qindle, we will
different and yet compatible      definitely be on the hunt for
forces come together to form an   those case-studies showing off
organic and empowering offer      proper tech immersion
to the consumer. As president     launches and meaningful
and CEO of the NRF Matthew        hyper-personalization – both of
Shay says: “We’ve seen many       them with a strongly infused
investments that retailers made   eco-conscious mindset.
over the past several years

                                                          — make it real   Retail
                                                                           RetailTrends
                                                                                  Trends2019
                                                                                         2019—
                                                                                             — 18
                                                                                              CES 2019
References
1.    https://www.forbes.com/sites/pamdanziger/2019/01/13/6-global-consumer-trends-and-brands-that-are-out-in-front-of-them-in-2019/#2e97fd054fe4
2.    https://www.forbes.com/sites/johnkoetsier/2018/09/10/48-of-consumers-will-own-an-echo-google-home-or-homepod-by-years-end-adobe-says/#510a99677e76
3.    https://trendwatching.com/quarterly/2018-05/the-future-of-retail/
4.    https://www.forbes.com/sites/danielnewman/2019/01/14/top-five-digital-transformation-trends-at-nrf-2019/#41bbe83239c3
5.    https://www2.deloitte.com/content/dam/insights/us/articles/4365_The-great-retail-bifurcation/DI_The-great-retail-bifurcation.pdf
6.    https://www.adweek.com/digital/3-surprising-retail-trends-that-emerged-from-nrfs-big-show/
7.    https://venturebeat.com/2017/08/09/walmart-will-scan-for-unhappy-shoppers-using-facial-recognition-cue-the-apocalypse/
8.    https://www.slideshare.net/canvas8/consumer-trends-in-2019-42-expert-perspectives-canvas8
9.    https://www.businesscornwall.co.uk/featured-posts/2019/01/guest-blog-retail-trends-in-2019/
10.   https://techcrunch.com/2018/03/17/the-rise-of-experiential-commerce/
11.   https://www.jwtintelligence.com/2019/01/yihyun-lim-director-mit-design-lab/
12.   https://www.shopify.com/retail/retail-trends-2019
13.   https://techcrunch.com/2018/03/17/the-rise-of-experiential-commerce/
14.   https://www.psfk.com/report/future-of-retail-2019-report
15.   https://www.vendhq.com/retail-trends-and-predictions
16.   https://nrf.com/blog/state-retail-heading-2019

                                                                                                                                            Retail Trends 2019 — 19
Qindle — Growing business
through innovation & design
Qindle® is a Dutch innovation and design company
that operates globally within FMCG, Consumer
technology and Health industries. We are a team of
strategists, designers, and engineers with decades
of experience in enabling ambitious companies to
deliver product and brand experiences that matter
to people, build business and mind the
environment.

By combining the strength of expertise and
personality together with an effective think and
can-do mentality we always deliver on our
straightforward brand promise:

Make it Real.

                                                     — make it real   Retail Trends 2019 —
Thank you!

   — design and innovation

    Joan Muyskenweg 22
     1096CJ Amsterdam

        www.qindle.nl
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