Dec 15, 2019

2020 Forecast for Retail: 5 Trends to Watch

Amid cries of a “retail apocalypse” for the past several years, new trends have emerged that make it clear that retail isn’t disappearing. Rather, it’s changing—drastically—and retailers that can’t keep up are shuttering their doors.

Business Insider reported on the “retail apocalypse” recently, listing over 8,600 stores that are closing in 2019. Big names include Sears, JCPenney, Abercrombie & Fitch, Party City, Payless, Charlotte Russe, Walgreens, Kmart, Barneys, Gymboree, Gap, Charming Charlie, Victoria’s Secret, and Forever 21. 

Yet the National Retail Federation reports that retail sales have been on the rise since 2015, with the month of August 2019 producing record numbers. Clearly, something is being left out of the picture when we talk about a retail apocalypse, and it’s this: for every company shutting down stores, 5.2 are opening new stores.

What sets these companies apart from those on the decline is an ability to adapt to trends, whether that’s incorporating mobile technology, catering to modern lifestyles, or listening to the demands of customers from younger demographics. In 2020, these are the top trends that will help retailers expand into the future.

1. Same-Day Delivery Is the New Express Shipping

The rise of Amazon ushered in an era where fast delivery is the norm rather than the exception. While 2-day delivery used to be the holy grail of e-commerce, the bar is now set even higher, with more than half of retailers now offering same-day delivery, including giants Amazon, Target, and Bed, Bath, & Beyond.

Part of this perpetual push for faster shipping services can be chalked up to the rapid increase in “instant delivery” services, such as Uber Eats and Postmates for food, Instacart for groceries, Drizly for liquor, goPuff for snacks and home essentials, and even Cleanly, a laundry pick-up and delivery service. Consumers expect their online orders, whether it’s food, laundry soap, or clothes for tomorrow’s work event, to arrive almost instantly.

However, small businesses can still compete against the likes of Amazon by offering personal experiences in place of hyper-convenience.

2. Style That Prioritizes Comfort

Whether you credit a few exhausting years in politics or juggling a long list of side hustles, one thing is clear: Americans are tired, and they’re prioritizing comfort now more than ever. This shift doesn’t mean that design takes a backseat, but it does mean that style has shifted to conform to ideals that are both cute and comfy, whether it’s clothing, shoes, or furniture.

Athleisure has been trending for several years, and in 2020, it’s poised to dominate the clothing market. Popular brands like Nike and Lululemon are still growing at staggering rates, while newcomers like Outdoor Voices and Girlfriend are taking the market by storm. A new trend—pajamas you can wear out in public as regular clothing—has emerged as the peak of fashion and comfort combined. Some of this year’s most buzzed-about shoe companies sell flats, including Rothy’s, which Forbes called one of the “next billion-dollar startups,” and Birdies, marketed as “the stylish flat that’s secretly a slipper.”

3. Goods That Are Sustainable and Ethical

Organic food and linen clothing is no longer a niche market. More than ever, consumers are looking to put their money where their mouths are by purchasing goods that are ethically-sourced and sustainably-made.

For retailers, this move means more than slapping a seal on your product. Straw bans are only the beginning. Excess packaging and the use of microplastics will come under fire in 2020, as will companies that produce large amounts of waste and fail to recycle. Fast fashion has already been a hot button issue in 2019 for the amount of waste it produces and for the use of sweatshop labor, with giants like Zara and Forever 21 closing stores and filing for bankruptcy.

In 2020, consumers will increasingly look toward purchasing locally-made, recycled goods, but they’re also interested in consuming less altogether. Quality will trump quantity going forward, allowing consumers to buy less because their goods last longer. Rental-based companies such as Rent the Runway and second-hand facilitators like Poshmark will continue to grow, with sales in the resale industry expected to double by 2023.

4. Experiential Shopping

Brick-and-mortar isn’t going anywhere in 2020. In fact, an ICSC report shows that opening up brick-and-mortar stores can increase traffic to a retailer’s website by 37%—known as the “halo effect.” To achieve this, though, companies need to turn shopping into an entire experience. Shopping should feel like entertainment, not an errand. The more personal the experience, the more you’ll build customer loyalty with your brand.

The Apple Store, which took the retail world by storm earlier in the decade, is the perfect example. They started several notable trends that made their stores a fun destination, even for folks with no intention of making a purchase. First, the floor plan was designed to highlight sample products rather than inventory, with one of every product out on the display for customers to play around with. They also allowed customers to take photos with the webcams on their computers, add fun effects, and then text the photos to themselves. 

IKEA became a popular destination store much in the same way, by putting the spotlight on their sample products, furniture that’s staged to feel like you’re walking through someone’s home. Sephora made a name for itself by allowing customers to sample every single makeup and hair product on the floor and even hiring makeup artists to show you how it’s done. Nike recently launched “Nike Live,” a members-only store that won Store Concept of the Year last year on Retail Dive for its innovative integration of mobile and local events.

Glossier, a hugely popular online makeup retailer, opened its flagship brick-and-mortar in New York, which now has lines wrapped around the block every day of the week. The “showroom” carries no inventory and instead showcases sample products for customers to try. They can then place an order with a sales clerk on an iPad and wait for their order to be filled in the waiting room. The interior of the store, covered in fun floral arrangements and its trademark millennial pink, has also become a hotspot for Instagram influencers to snap and post photos.

5. Customers Expect Real Inclusivity and Diversity, Not Meaningless Gestures

In every industry, consumers expect diversity, and not just for show. They want to see themselves—their gender, race, size, age, ability, and more—represented in a brand’s advertisements, but they also want to see products that cater to their individual needs.

Plus-size fashion is one area that’s experienced a huge renaissance in recent years, with an outpouring of new companies that focus on plus-size or offer inclusive sizing. Universal Standard, a trendy new clothing company offering elevated basics, takes it a step further: they want to usher in the end to the “sizing binary” in which companies offer separate and different plus-size sections—when they offer them at all. Instead, Universal Standard offers all of their clothing in sizes ranging from 00 to 40. 

However, some fashion retailers have come under fire for using plus-size models without actually offering plus-size clothing. Companies that promote unrealistic beauty and body standards have been under attack for several years. Moving forward, brands will be called upon to not just speak about diversity and inclusivity but to actually do the work of making their product, and boardrooms, more diverse and inclusive.

About the author

Elizabeth Aldrich
Elizabeth Aldrich
Elizabeth is a freelance writer covering personal finance, business, and travel. Her writing has appeared in The Motley Fool, Business Insider, Yahoo! Finance, LendingTree, Student Loan Hero, FOX Business, and more.

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