Despite last year’s good results, the 2020 outlook for the retail sector is less favorable, especially in the USA. Experts say that uneven performances are to be expected from companies this year, due to intense competition, especially in the mature western markets. One of the key factors for disruption in retail is the growing market share of e-commerce, currently at 10.7% in the US–the equivalent of $586.92 billion. Continuous changes in consumer preferences and new market entrants lead to new store formats, proposals, changes ib price and product mixes, and the emergence of niche brands. But is that all that 2020 has in store for the retail market?
The short answer is no. New competitors and technologies are going to take the retail market by storm, and businesses have no alternative but to try and stay ahead of the game. But this shouldn’t come as a surprise, as companies around the world have experienced these challenges before. Global economic turmoil is also expected to prompt some changes, but this is not a new factor either. When talking about new key aspects in retail, we may need to look deeper than ever before. That means talking about international trends that impact multiple industries.
UK Might Set the Trend for Vegan Fashion
2020 finds people everywhere looking for cruelty-free products, and it seems that they are willing to pay more for products that make the world a safer place tomorrow. But how can they be certain that a “cruelty-free” label is not just a price tag? When it comes to ethical, eco-conscious fashion, it is the UK that made the first step by establishing numerous guidelines on vegan fashion. The rules have been established to keep businesses from claiming that their products are “sustainable” merely on the basis that they do not contain animal products. These guidelines couldn’t have come at a better time, as the demand for vegan fashion and ethical products continues to rise.
Retail Will Provide Marketers with New Channels for Brand Building
People everywhere have already started to look at brick and mortar stores as a thing of the past, yet the digital age is more about development than dissolution. Those who adapt to new challenges will survive and thrive, which is why companies have already started to exploit certain opportunities. Brands know that stores are a great way to reach consumers in more ways than one, which is why they have started to use them as marketing channels for brand building.
China and the Recent Outbreak of Coronavirus May Offer Cause for Concern
Retailers may think that the new coronavirus outbreak is relevant only to the fields of medicine and tourism, but the truth is far more complicated. With many American companies having factories and retail stores in China, the crisis may lead to some disruption. Let’s not forget that China is now the biggest worldwide supplier of US apparel and footwear on the market. To make matters even more complicated, present circumstances may create the perfect conditions for excess demand that can, in turn, lead to rising prices and plunging sales.
Multichannel Retail: A Big Challenge or the Next Opportunity?
As brick-and-mortar sales lose ground to e-commerce, retailers might be tempted to think that all they have to do in order to regain success is to go digital. But the reality of retail may prove to be once again more complex, and retailers may have to reinforce both their online and their offline channels. Research company GlobalData shows that “retailers need to find the optimum balance between the physical and digital elements to maintain a profitable business and sustain growth–which is extremely difficult in a sector where growth is limited”.
New challenges rarely come without opportunities, but it may take some time for retailers everywhere to adapt and respond accordingly. With predictions of uneven performance and worldwide changes in retail and beyond, maintaining balance might be the best way for retailers to react.
By contrast, ignoring the challenges that the new decade has in store might very well mean accepting defeat in the fact of those who saw the possibilities earlier. Businesses that can analyze future challenges and find a way to transform them into opportunities will surely have a bright future. After all, fortune always favors the brave.