While 2018’s retail trends focused on technologies helping retail companies stay competitive, 2019 retail trends focus on giving consumers more of what they want (and less of what they don’t). This year’s retail strategies also reflect key regulatory, economic and social factors affecting consumption.
Here are eight 2019 retail predictions that will impact retail companies of all sizes as they strive to keep up with market trends to stay competitive.
1. Purpose-led brands
Many retail companies are winning consumers’ trust and sales by prioritizing people and purpose ahead of profit. These companies infuse the retail experience with meaning by committing to values like corporate social responsibility (CSR), sustainability and transparency. As Accenture found, more than 60% of younger consumers closely consider a company’s ethical values before buying their products.1Schaverien, Anna. Consumers Do Care About Retailers’ Ethics And Brand Purpose, Accenture Research Finds. Forbes. December 12, 2018. The study also notes 63% of respondents prefer companies that stand for a purpose that reflects their own values and beliefs, and will avoid companies that don’t.2Adams, Peter. 63% of consumers prefer to purchase from purpose-driven brands, study finds. Marketing Dive. December 6, 2018. For instance, Nike’s marketing campaign featuring NFL star and political activist Colin Kaepernick sparked controversy yet it resonated among its young audience. Popular consumer packaged goods (CPG) brand KIND Snacks gives back to communities through volunteering and product donations. In addition, apparel retailer ASOS earned praise for its inclusive marketing, which reflects diverse ethnicities and body sizes so all shoppers feel like they belong.
2. Cannabis/CBD
As more jurisdictions legalize cannabis, the stigma surrounding this substance continues to fade and cannabis evolves into a revolutionary retail ingredient. Currently, cannabis is legal for medical purposes in 32 states and for recreational purposes in 10 states.3Lopez, German. Marijuana is legal for medical purposes in 32 states. Vox. November 14, 2018. 4Berke, Jeremy and Skye Gould. Michigan is the 10th state to legalize recreational marijuana. This map shows every state where pot is legal. Business Insider. November 7, 2018. Cannabis compound cannabidiol (CBD) is increasingly popular as a natural option for health, beauty, personal care, food and beverage products. Since CBD is not psychoactive, it doesn’t get consumers high. But research shows it can reduce inflammation, and improve mood and sleep, among other therapeutic applications. Now companies are adding CBD to products ranging from chocolate to coffee beans, beverages, lip balms, bath bombs, and even pet products.5Hochman, Jessica. CBD: Three Letters Driving Triple-Digit Growth. Retail Leader. November 21, 2018. Big brands are paying attention, as Corona beer maker Constellation Brands plans to add cannabis-infused beer to its assortment and Coca-Cola initially considered doing the same for its soft drinks.
3. Less sugar
Famous rock lyrics may need to change to “Pour Some Splenda on Me.” As more consumers embrace a health and wellness lifestyle, and reduce their sugar consumption, food suppliers face pressure to reformulate their recipes and develop low-sugar innovations. Nestlé Confectionery found 92% of households are trying to manage or reduce the amount of sugars in the food they buy, and 53% of sweet buyers would buy a reduced-sugar alternative if it was available.6 2018 Food trends: Sugar confectionery sales decreasing due to health trends. NovoTaste. June 15, 2018. In response, members of the Food and Drink Federation, including brands like Mondelēz International, have reduced the amount of sugar per basket by 12% over the past five years.7Ibid. Meanwhile, better-for-you options like low-sugar Halo Top ice cream earned more than $340 million in sales, and Mars Wrigley Confectionery will release low-sugar, high-protein versions of Mars and Snickers chocolate bars in 2019 to adapt to changing consumer tastes.8Bronner, Stephen J. Before Halo Top became one of America’s fastest-growing ice cream brands, it was on the verge of death. Business Insider. July 2, 2018.9Tatum, Megan. Mars & Snickers bars to get less sugar and more protein. The Grocer. September 28, 2018.
4. Less plastic
The media increasingly reports alarming stories of marine animals harmed by plastic packaging discarded in the world’s oceans. Social media posts admonish consumers for using plastic bags, which take an entire millennium to decompose in landfill sites. As a result of increased awareness of the social harms of plastic, consumers want retail companies to reduce the amount of plastic they use in their operations. While younger consumers are vocal advocates for sustainability, Accenture also discovered that Baby Boomers find companies that reduce plastics more appealing.10Schaverien, Anna. Consumers Do Care About Retailers’ Ethics And Brand Purpose, Accenture Research Finds. Forbes. December 12, 2018. In response, Starbucks is banning plastic straws and replacing them with “adult sippy cup” lids and grocery retailer Lidl will phase out black plastic packaging, which cannot be recycled.11Nace, Trevor. Starbucks To Ditch Plastic Straws — Will It Actually Help The Environment? Forbes. July 10, 2018. 12Siddique, Haroon. Lidl to stop using black plastic fruit and vegetable packaging. The Guardian. September 21, 2018. Suppliers also demonstrate leadership in this area, as CPG giant Procter & Gamble (P&G) launched a new bottle for its Head & Shoulders shampoo made of up to 25% plastic collected from beaches.13Procter & Gamble’s push to recycle ocean plastic. The Weather Network. February 23, 2018.
5. More value and premium products
As income disparity reallocates America’s middle class toward opposite ends of the economic spectrum, retail is responding to new consumption requirements. A growing number of retailers have introduced three-tier private label assortments that include value, everyday and premium lines. As research firm IRI notes, grocery stores will need to expand the value and premium ends of those offerings.14Wells, Jeff. Private label sales soar, but grocers are off pace. Grocery Dive. November 14, 2018. According to the National Retail Foundation, 89% percent of consumers say they shop at bargain retailers. One in three Millennials are value-driven shoppers, and 93% of Gen Z shoppers shop bargain retail.15Spector, Nicole. Millennials Are Doing Their Shopping at Dollar Stores and Discount Racks. NBC News. March 7, 2017. In 2018, Amazon devoted an entire section of its e-commerce site to products priced $10 or less and threw in free shipping.16Estrada, Maren. Amazon has an entire section just for products under $10 with free shipping. BGR.com. July 23, 2018. Conversely, Amazon also expanded its beauty offerings to include luxury products for consumers with more disposable income.
6. Experiential retail
Retailers are getting more creative with how they entice shoppers to visit their brick-and-mortar stores and linger longer. To attract cosmetics shoppers, Sephora combines a traditional retail experience with mobile apps and activities unrelated to making a purchase, simply to engage and connect with the consumer without a pushy hard sell.17Wertz, Jia. 5 Trends That Will Redefine Retail In 2019. Forbes. November 28, 2018. Experiential retail also brings wellness to retail by delivering self-care opportunities to transform shoppers from stressed out to blissed out. Mattress company Casper opened The Dreamery, a quiet in-store space where customers can schedule a 45-minute nap in a nap pod. Shoe retailer DSW pampers in-store shoppers with manicures and pedicures for luxurious multitasking, and yoga apparel giant Lululemon helps shoppers relax by offering yoga classes and meditation spaces in select stores.18Morgan, Blake. The Top 10 Experiential Retail Trends For The 2018 Holiday Season. Forbes. November 5, 2018.
7. Augmented reality (AR)
Digital transformation will certainly continue in retail this year, particularly with expanded use of AR. Adidas partnered with social media platform Snapchat for a lens that lets mobile users virtually try on a new running shoe using AR. The technology aligns with Adidas’ objective to engage younger, digitally native mobile users with rich, immersive marketing.19Williams, Robert. Adidas pairs with Snapchat for AR sneaker try-on. Mobile Marketer. December 13, 2018. Direct-to-consumer beauty brand Madison Reed uses AR to allow consumers to see how they look in different shades of hair color.20Williams, Robert. DTC beauty brand Madison Reed brings AR try-ons to hair coloring. Mobile Marketer. October 26, 2018. Ahead of the holidays, Target added its inventory of artificial Christmas trees to a mobile AR feature called See It In Your Space so shoppers can try before they buy, attracting hundreds of thousands of guests and doubling tree sales.21O’Shea, Dan. Target taps AR to sell more Christmas trees. Retail Dive. December 10, 2018.
8. Strategic partnerships
Since retail upheaval can overwhelm even successful market leaders, more retailers, suppliers and their supply chain partners are working together to serve consumers better. For instance, Kroger announced it will sell groceries in branded sections of Walgreens stores in 2019 to give consumers more variety and convenience.22Haddon, Heather. Kroger to Sell Groceries in Walgreens Stores. The Wall Street Journal. December 4, 2018. Although Amazon and Instacart recently parted ways, Instacart signed new partnership deals with Kroger, Aldi and Sam’s Club to deliver online grocery orders to consumers’ homes as the e-grocery channel heats up.23Morning Brew, December 14, 2018. Meanwhile, Walmart partnered with Microsoft to accelerate its digital transformation, including artificial intelligence (AI) and Internet of Things (IoT) innovations to gain deeper shopper insights and improve the customer experience.24Johnson, Khari. Microsoft and Walmart strike 5-year AI and cloud partnership. VentureBeat. July 17, 2018.
Retail companies whose business plans include these trends can look forward to a busy 2019, as their strategies reflect in-demand consumer trends across retail channels and categories. As we look at the year ahead, which emerging retail trends would you add to this list?