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The National Retail Federation‘s annual Big Show is the pulse of where retail is today and where it is going tomorrow. Here are key takeaways from the 2019 event and insights regarding what it all means for retailers and brands in the coming year and beyond:

Retail was never dead. Now it’s reawakened.

Retail has a new definition that encompasses physical and digital worlds and we’re undergoing a retail transformation. The industry has moved past the point of apocalyptic panic that was heightened by the press and is sitting in a position of strength. While 2018 closed with retail sales having grown 4.6%, the NRF predicts sales in 2019 to grow up to 4.4%, with a slowdown expected due to unknowns surrounding tariffs, the Fed’s next moves and the government shutdown.

What we think

Retailers and malls will seek new uses for spaces that include showrooms, pop-ups, fulfillment and returns centers. In the case of malls, new tenants will appear as grocery stores, food halls and community gathering areas. Although sales are shifting online, consumers still crave the tangible experience of in-person shopping and many are seeking opportunities to see products in person before buying. The influx of digitally native retailers that are expanding into brick and mortar speaks volumes as to the value of physicality and getting closer to the consumer to foster interaction.

Stores of the future will go beyond transaction.

As Lee Peterson from WD Partners said, “people don’t have to go to stores anymore, people have to WANT to go to stores.” Retailers need to envision and repurpose what the role of the store is in a digital age. Shopping should be fun and engaging but also fulfilling. Ultimately, consumers on a shopping mission want to be able to walk out with what they went in to buy. In the meantime, physical retail will evolve beyond just physical spaces to places where we can eat, work, play or learn. Agility and responsiveness to change will be paramount for retailers to embrace.

What we think

Today’s consumers are looking to do, see and explore more. Challenging shoppers to do more with their purchase maintains interest and engagement with a brand and retailers should embrace ways for their customers to interact in person. Activewear retailer Outdoor Voices, challenges customers to embrace the brand mission of “doing things” by offering activities to participate in, both in stores and through pop-up events, such as roller skating parties or dog-walking groups. Customers are encouraged to share photos of ‘doing things’ in OV gear on social media. Not only does this give customers motivation to shop, it gets them excited to interact with the brand and share their experiences with others.

What a brand does is much more meaningful than what it says. Having a keen sense of inclusion and embracing diversity are important considerations for not only a brand’s consumer base, but its employees.

Lead with conviction to win loyalty in the long run.

Consumers shop with their values. What a brand does is much more meaningful than what it says. Having a keen sense of inclusion and embracing diversity are important considerations for not only a brand’s consumer base, but its employees.

What we think

Successful retailers will be those that can find and define their purpose, and then have it be embraced by consumers. Mintel’s research finds that two-thirds of consumers think it’s very important that companies act morally or ethically and 55% expect brands to be a force for positive change. Notably, they’re more likely to align with a brand that embodies their own beliefs and morals. Everlane’s mission of promoting sustainability and transparency is echoed in how it produce its products, including a collection made from recycled materials, and how it communicates with customers, going so far as to hold a weekly “Transparency Tuesday” Instagram story series addressing customer questions and concerns. Warby Parker stands for “vision for all” while Brandless attempts to align any company initiatives with its customers’ passions. Although low prices can feed the wallets and drive sales short-term, conviction feeds the heartstrings and can lead to lifetime loyalty.

It really is all about the consumer.

“Consumer-centric” and “customer first” were heavily discussed themes at the show. The pressure to deliver topline growth can impede the focus on the customer to a degree causing some analysts to advocate for different retail performance metrics that focus more on driving profitable growth. Driving profitable growth will require a deep understanding and usage of customer data to determine the optimal mix of core customers, products and channel strategies. Retailers have consumer data that is better, more precise, robust and personal. Artificial intelligence (AI) is no longer an “emerging trend,” but rather embedded in everything we do from a marketing standpoint. Machine learning and predictive analytics will increasingly be leveraged to make product recommendations more customized and tailored. This individualized approach will be what wins in the long run.

What we think

While privacy and security concerns linger, digital shopping basically necessitates that some degree of personal information be shared with merchants. Younger generations are the most likely to see AI as useful and to share their personal preferences and other information, but fully expect to receive recommendations or customized offers in return.

Final thought

This will be a year of continued stabilization for the retail industry. Successful retailers are focused less on wholescale reinvention and catching up to consumers’ changing shopping preferences, and more on how to optimize current systems to take customer relationships to the next level. It’s likely we’ll see more big acquisitions or unique partnerships formed, as retailers look outside their core competencies to expand expertise, capabilities and product/service offerings.

Alexis DeSalva is a Senior Research Analyst at Mintel. Alexis focuses on US Retail and eCommerce reports.
Diana Smith is Associate Director for Mintel’s US Retail and Apparel Reports.