I don’t know about you, but as our team spent time in stores, at social events, in restaurants, attending industry events, and more during Q4 2019, the overall “vibe” was positive – in fact, very positive. The consumer feels good. The consumer is eating out. Shopping. Traveling. Investing. Smiling. Spending. Unemployment is low. Inflation is low. Trade agreements with China (and others) seem to be heading in a positive direction. The stock market is up (way up). There are many jobs – new and different kinds of jobs – in the market. Exciting, and yet this makes me wary given the last time it all felt “this good.”
Retailers have come a long way – no longer is it “all about Amazon” and in fact, many traditional brick and mortar retailers have made great strides in providing an “Amazon-like” shopping experience online, offering fast/free shipping to home or store, enabling pickup in store, and smoothing out what had been a disjointed channel connectivity problem in the past (many retailers developed their online channel separate from their store channel – different systems, data, platforms, etc.).
We did lose many retail stores in 2019, including Sears, Kmart, Payless Shoesource, Barneys, Party City, Gymboree, Dress Barn, Fred’s, Shopko, Charming Charlie, Avenue, LifeWay Christian Resources, A.C. Moore, and Charlotte Russe to name a few. Note that not all are out of business, but at a minimum, they significantly decreased their real estate footprint or number of doors. It has become such a common occurrence that to most – even those serving the industry – it’s no longer a shock or surprise for the next “formerly top-performing retailer” to announce store closings. What is interesting is that despite this trend, more and more commercial real estate is popping up with retail square footage availability – outdoor walking malls, new office buildings with first-floor retail, trendy/niche /high-end grocery, etc. This will be interesting to watch as more and more consumers shop online vs. walking the traditional (or non-traditional) malls and if the overall market cools and consumers pull back on spending.
What about trends in tech? Let’s start with data security. According to Business Insider, since the start of 2018, at least 19 retailers and consumer companies were hacked and likely had information stolen from them. Many of these breaches were caused by flaws in payment systems that were taken advantage of by hackers. Furthermore, according to a study by KPMG, 19% of consumers said they would completely stop shopping at a retailer after a breach, and 33% said they would take a break from shopping there for an extended period. Cyber security and privacy continues to be a focus for investment from a systems perspective.
And, in the world of data and analytics, the retail industry continues to move into artificial intelligence, machine learning, and intelligent automation (including robotic process automation (RPA)) solutions and capabilities in an effort to make better use of operational data and more flexible cloud platforms.
This year is poised to be an eventful one for retail. Below are a few key retail technology trends that will be of importance in 2020.