It’s a new year and a new decade, bringing inevitable changes to the retail industry. In the past decade, we’ve seen change regarding how and where consumers shop and what they seek in a shopping experience, but if history has taught us anything, the future isn’t completely unpredictable. So, what can we expect in the kickoff to a new decade of retail?
Here, we take a look at emerging and established brands and retailers to watch in 2020.
Rent the Runway: what’s next
Despite some hiccups with delivery and customer service in the fall of 2019, Rent the Runway had a notable year. In March 2019, the company reached the coveted “unicorn status” of surpassing $1 billion in valuation and was also listed by CNBC as the fifth on a list of top 50 disruptor companies. In the past year, the fashion rental service has expanded its offerings to include kids’ clothing, ski apparel and home furnishings through a partnership with West Elm. To close out the year, the brand announced its collaboration with W Hotels to offer rentals to hotel guests in select cities, bringing consumers one step closer to a virtual, flexible closet. What’s on the horizon for Rent the Runway will mirror what’s valuable to shoppers. In 2020, Mintel predicts launches into menswear, footwear and collaborations with fitness studios in order for Rent the Runway to resonate with more consumers.
Nordstrom: remaining relevant with today’s consumer
Nordstrom has been around for more than 100 years and the department store continues to evolve in a way that’s relevant to consumers – existing and new. In October 2019, the department store chain opened its first full-scale flagship in New York City, with a focus on luxury. The NYC space brings trendy brands to life, such as Schutz (see below), providing an opportunity for consumers to shop this brand and other emerging or digitally native brands in person. Customers can shop for shoes while sipping martinis or cap off their shopping trip with a sit-down meal, thanks to numerous dining destinations. Other perks include a personalization studio, 24/7 pickup and delivery, denim alterations and stylist consultations. While some perks have been a part of Nordstrom’s business for years, others are new or unique to the area. Nordstrom’s approach to service and products demonstrates the retailer knows that consumers want different things, but they all see value in quality and convenience. Expect to see the department store introduce more region-specific stores in 2020 and beyond.
Schutz: embracing the new age of social commerce
Brazilian footwear brand Schutz has been around since the mid-90s, but has gained traction with U.S. consumers in recent years, thanks to a social media strategy that’s instructional and inspirational. With the appointment of Marina Larroude (former Barney’s New York Fashion Director), the brand’s focus includes content and storytelling, recognizing that consumers seek style inspiration but also want to know what to wear and how to wear it. Larroude also recognizes that social media is the gateway to product discovery for many consumers, especially younger generations, and plans to use it as a tool to increase brand exposure to a larger audience. Schutz already utilizes shoppable links on Instagram, but expect to see this brand experiment with more features as social shopping enhancements evolve. In 2020, social media will likely become a significant destination for Schutz to fulfill transactions.
In 2020, Mintel predicts a continued focus on experiential retail and elevating the in-store experience, along with social media becoming a bigger destination for shopping, not just discovery.
Lululemon: evidence that physical retail isn’t dead
In a time that many believe to be a “retail apocalypse,” activewear brand Lululemon is demonstrating that physical retail is not dead. As many retailers close their doors, Lululemon is opening them, but it’s important to note the types of stores emerging in the competitive landscape. A pioneer in the world of experiential retail, the retailer offered in-store events and free classes before such events were common. The brand recognized their communities of customers weren’t just buying products; they were living and being in them. According to Mintel Trend, ‘Challenge Accepted,’ today’s consumers want to do more than just transact with brands and retailers. Lululemon took an innovative approach to the in-store experience and created an environment for customers to eat, exercise, work and shop, but the focus is not on the latter. Sales are an ultimate necessity for any retailer, but Lululemon has shifted the focus beyond the transaction to the customer interaction. Offering the opportunity to test out Lululemon gear during a preferred workout or while grabbing a post-workout smoothie without ever having to leave the store gives shoppers a reason to visit in person, and a reason to return.
The approach is paying off. In December 2019, Lululemon reported positive third quarter growth over last year and broke company records during the Thanksgiving through Cyber Monday weekend. The retailer’s new experiential stores are currently only in Chicago and the Mall of America (Minnesota), but in 2020, Mintel predicts more such stores will open.
What we think
Retail is alive and well. Inevitably, stores will close and more retailers will meet their demise in 2020, but many will stay alive and thrive, as long as they understand how to meet changing expectations in a relevant and brand-authentic way. Mintel predicts a continued focus on experiential retail and elevating the in-store experience, along with social media becoming a bigger destination for shopping, not just discovery, in 2020.
