When online shopping first became viable in the mid-1990s, everyone had predictions of what would happen to the retail industry. But with innovations in technology and demographic shifts, we now see that no one could’ve foreseen the current landscape.
Here are the major retail trends – the good and not-so good:
Shop online, get it at the store
Not too long ago, it was a foregone conclusion that the Internet would kill off most brick and mortar stores. Physical stores would shift to 100% percent online selling. But it turns out consumers didn’t want to be as virtual as predicted. Now more and more people like to browse online but pick up their buys at the actual store. They get their purchases in hours instead of days, and businesses benefit by saving on shipping costs
Here come the robots
The future is now. Every day sees an increase in online shopping, which means more hands are needed to select and pack products. The problem is that companies can’t keep up with the demand to do so. It’s likely that by 2025, about 1/3 of retail jobs will disappear. In fact, robot workers may eliminate up to 6 million jobs. The good news is that consumer costs may drop, but unemployment may increase.
On that note, we’re seeing a shift where full-time jobs are increasingly becoming part-time jobs. White retailers cut costs associated with providing benefits, they can hurt the business in the long run by not having the type of loyalty that only full-time employees can provide.
A new type of subscriptions
Subscriptions used to be for newspapers or magazines. It was convenient to get your favorite monthly in the mail. It was a nice surprise to open the mailbox and find the latest issue. That level of convenience has extended to everyday products like razors, food, cosmetics, clothes, and other household items. This is one trend that may benefit the consumer much more than the retailer. Subscriptions can have a high churn rate, so retailers must assess if profits can outrun the long-term costs of these programs.
In addition to subscriptions, rentals have increased in popularity as well. Rent camping equipment, rent a designer gown – the list of possibilities goes on and on. This trend has been driven by younger consumers, who don’t care to own items as much as prior generations.
Buy it used
Millennials and Generation Z don’t just like to rent, they also liked to buy used items. Like clothes. That’s why consignment, thrift, and “vintage” stores are a favored shopping destination for young people. In fact, buying used is so popular that industry experts predict growth to go from $28 billion today to $51 billion by 2023.
Eat while you shop
Many of us remember being kids, going to department stores with our parents and eating there during the shopping trip. In-store restaurants faded away a few decades ago, but they’re making a comeback, as retailers see the benefits of providing another reason to stay for longer.
As we can see, you can never know exactly where the retail industry will go. The key is to keep a pulse on the changes and be ready to adapt accordingly.