By Larisa Dumitru, eCommerce Lead at Ogilvy UK
The roaring 20s are here again and with them inboxes have been filled with ‘The Future of…’ reports and articles. True to my geeky spirit, I’ve spent more time reading them than I’d like to admit – some of them are pertinent and logical, some pure gimmick and others wishful thinking.
I have distilled the many insights and trends into my top five favourite and least favourite retail trends for the year ahead.
Starting with the favourite trends:
1. The circular economy expands.
Rental services, preloved goods and recycled materials have been around for a while, but 2020 might be the year the circular economy really takes off.The preloved market is expected to reach $51 billion by 2023 (55% coming from thrift and donations and the rest of 45% from resale) and to grow nearly 1.5 times that of fast fashion ($64 billion vs $44 billion) by 2028.
We are also witnessing a shift in mentality, with shoppers becoming more conscious of their consumption and the impact of their shopping habits. Brands and retailers will quickly need to adapt, be it new business models (renting vs buying), more aggressive sustainability targets or innovation in packaging.
2. Social commerce is finally taking off.
It’s fair to say the projections of social commerce purchases have been overly optimistic over the past few years. But in 2019, we finally saw true evidence of this growing trend - in the US, the percentage of Internet users who bought a product directly through social media grew from 13% in Q4 2018 to 21% in Q3 2019.
We do hope that 2020 will bring the Instagram Checkout feature to Europe as well, whist also keeping an eye out for what other social media platforms have in store for us (pun intended).
3. Brands will be more AND less important
Private labels are nothing new and used to be seen as the cheap (and often low quality) alternative to well established brands. Not anymore – especially across commoditized categories, many now perceive brandless brands just as good as household names, whilst providing better value for price.
In the US, Target quickly jumped on the bandwagon and launched Good & Gather, a food and beverage private label brand playing on simple, high quality ingredients. Brandless took things to a new level and has already become one of the online retail darlings. In the UK, the perception is slowly changing as well – just look at M&S’s SW11 shop in Clapham – private label has never looked so tempting.
And now on to my least favourite trends…
4. Faster delivery times
In the age of instant gratification, having retailers competing for faster delivery times seems like a given. But whilst getting your parcel in front of your door in less than 24 hours might be satisfying, there are wider implications of these fast and furious delivery times.
For non-food items, next day or same day delivery means always having available stock, which then requires more space to keep it and more energy to store it and move it. From a food perspective, constant availably might results in increased levels of food waste. Not to mention all the additional vehicles required to guarantee speedy delivery, often in vans that are only partially loaded.
5. Voice commerce
They said that by 2020, almost 50% of Internet searches will be done via voice. But it seems like we might have missed the boat on this one already. Voice is felt to be still in its infancy and I do believe it will only get more sophisticated over time, but the success lies in integrating voice experiences within the already existing shopping behaviours, not forcing new ones. Only time will tell…