Everyone's looking ahead to 2018, and fashion retail data and analytics firm EDITED is no exception. Here's what the company foresees as influencing the world of apparel retail in the year to come.
1. Retail will provide greater pricing transparency
While some discounting is healthy and necessary, retailers have found that a long-term dependence on markdowns dilutes a brand’s value and erodes confidence. In 2018, brands will experiment with ways to use prices to attract customers. This includes giving customers a discount if they remove the “free returns” option or buy multiple items, or are transparent about supply chain costs, such as Everlane, to align with consumer values.
2. The AI avalanche will continue for retailer survival
The continued expansion of Amazon into groceries, apparel and other consumer goods mean artificial intelligence (AI) will be essential for retailers’ survival. In 2018, new AI applications — including more chatbots, voice-activated devices, real-time analytics and systems to detect payment fraud will flood the industry. Savvy retailers will recognize which apps to use for greater personalization, customer service and inventory management.
3. Experience-driven retail will prevail
In a year punctuated by a record-breaking number of bankruptcies and store closures, selling products is no longer “good enough.” In 2018, the onus on retailers is to educate shoppers on the value they deliver beyond their wares, helping to build an emotional connection and sense of community. From Story’s thematic retail concept store to Snowe’s magazine, by understanding the brand’s backstory, there’s a greater opportunity to spark conversations, and affiliate shoppers to the retailer.
4. Luxury retail will continue to gain ground
From the growing middle class in China to Millennials spending their disposable income on experiences, the average cost of luxury items is up 15.4 percent compared to three years ago, according to EDITED — and this growth rate will continue in 2018. And with Gen Z having a broader number of diverse backgrounds and preferences than any other generation, the luxury retail market continues to grow more than any other category.
5. Store shutdowns shift to delivery & distribution
As demand dwindles for in-store retail staff, the demand is shifting from the shop floor to delivery. Consumers will expect quicker (even same-day) delivery, the convenience of scheduling a time, and easy return policies, which retailers will need to support without sacrificing margins.