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Predictions 2020 : Retail


2019 was one of the most challenging and disruptive years for retail, with IMRG Capgemini Online Retail Index reporting the lowest online growth seen since the index began in 2000 (+6.7%). There were record store closures on the high street and well-known retailers such as Debenhams, Mothercare, Karen Millen and Coast going into administration.  Following such a turbulent year, I caught up with the experts from the retail team to understand and share predictions on what trends we expect will lie ahead in 2020.  Below we have captured what we anticipate will be the key retail trends.

“Retailtainment” to better leverage store-space

In the past decade, physical locations have been a huge liability for retailers where we’ve seen consumers shopping less in-store.  With retailers such as Tesco having floorspace of up to 180,000 sq ft, yet rationalising their ranges, utilising physical space has become especially important. “Retailtainment” (meaning to provide the combination of both shopping and entertainment), has started to offer customers a fun, unique experience to help enhance the shopping experience in-store.   Although some retailers have been doing this for a while (as seen with Sweaty Betty using their storage space to offer free fitness classes), we’re expecting this trend to grow this year.  This follows a recent increase in retailers doing this, such as:

  • JD Sports’ in-store DJ sets
  • Pets at Home hosting children’s parties
  • Farfetch’s Store of the Future
  • House of Vans’ ramps and street course
  • Tiffany’s ‘Style Studio’ in Covent Garden

The growth of “retailtainment” proves that bricks and mortar stores can have a vibrant future if they adapt and serve as entertainment spaces too.

Efficient sustainability

Sustainability is by no means a new trend, but it continues to be top of mind for consumers, who are becoming increasingly concerned about issues such as climate change.  Retailers need to be able to react very quickly otherwise they will lose out.  Some retailers are already starting to recognise the opportunity that the shop floor presents when it comes to conveying their effort for the environment, such as providing in-store recycling schemes and sustainably sourcing shop fixtures and fittings.  Some retailer examples include:

  • Luxury Fashion: Stella McCartney has replaced traditional high-end materials for handmade, organic and sustainably sourced elements (e.g. an air purifier system that cleans the air using nanocarbon technology).
  • High-Street Fashion: H&M’s programme “Take Care” provides tips on how to repair and remake clothes to make them last longer and Marks & Spencer’s Shwop scheme continues to encourage clothes recycling.

To make this approach work, however, sustainable methods will have to be business efficient otherwise they will not be adopted.  For example, Primark is one of the only retailers to be expanding, yet widely criticised for being unsustainable.

A decline in the dreaded “serial returner” and the impact on the environment

Last year we saw retailers such as online giant Asos begin to blacklist so-called “serial returners”, but aside from the huge cost to retailers, consumers need to be made aware of the environmental impact of returning productsRecent studies have found that half of Brits are concerned about the environmental impact of over-ordering and returning goods, but despite this, over a quarter of retailers (26 per cent) have seen an increase in the volume of goods being returned in the last two years To overcome this, new technologies are on the way to help reduce returns through determining exact body size to ensure fit, with examples such as AI building 3D models to show how the clothes look on the individual.  In the next year, we expect to see major fashion retailers implementing these technologies.  Asos, for example, already offers a virtual catwalk function on their mobile app.

The explosion of data

In the past decade, we’ve seen retailers move from a reliance on experience and instinct to make decisions, to leveraging technology like ML (machine learning) to make data-driven decisions.  Using these technologies, retailers can provide consumers with exactly what they need – providing the right products and service at the right time – enabling them to gain a competitive edge.  We’re seeing a trend in consumers becoming more savvy with the use and exploitation of their data, however, and they’re now expecting something in return for this. As a result, this year we’re expecting to see a better value exchange between the retailer and consumer, with data becoming a source of currency. In some places in East London already, for instance, you can now purchase food and drinks by paying with your data.

Expanding the capability of voice assistants for retail assistance

Last year, we saw voice assistants expanding their reach, with a study reporting that up to 74% of consumers already use voice assistants for researching or buying products.  In 2020 we’re expecting this to grow even higher, and the capability of this technology to expand further:

  • Driving customers into the store: We’re expecting to see the rise of voice technology used to drive shoppers into their physical stores, using voice assistants such as Alexa and Siri to provide customers with key information e.g. store hours and locations.
  • Supporting in-store operations: Retailers will start to use voice assistants to support staff with retail operations management, such as providing information like a product’s location in-store to help guide customers (and staff), and to help improve inventory accuracy and availability in-store.
  • Search and buy: Already a rising trend, we’re expecting to continue to see the rise in consumers using voice assistants to search and buy products through voice-led conversations.

Live stream shopping through social media

Social Media has been used as a marketing tool by companies for a while via apps like Instagram, but the latest trend in social media buying is live stream shopping. Live stream shopping acts as a digital shop floor as it allows viewers to purchase goods instantaneously.  In 2019, Amazon launched their own live video shopping platform, so that when a customer views a particular video, a series of product links appear below the screen, enabling them to purchase the product directly or learn more about it.   As retail becomes increasingly focused on technology and about creating immersive experiences for consumers, we will likely see more retailers creating live video experiences for their consumers.  Doing this not only helps them engage with their audiences through a new medium and increase sales, but also helps them extend their customer base by attracting new shoppers they otherwise might not have reached.

Aside from these key predictions, we are also expecting other key trends to take off in 2020.  These include the re-emergence of blockchain, agile factories, and unstaffed stores to name but a few, which we’ll also be tracking closely throughout the year along with major online shopping trends.  If last year is anything to go by, 2020 promises to be a very eventful year for the industry!

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Gabby Thomlinson