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2019 will require agility and a strong stomach from retailers



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OK, here’s a 2019 prediction that I’m feeling pretty good about: This won’t be the only story you read the sketches out key events that will unfold in the retail industry in the coming year.

The New Year’s prediction story is an old standby for 24/7 news outlets that need to make it through the dead time leading up to Christmas and lasting through the start of the new year. But it’s also in keeping with what is traditionally a time to reflect while simultaneously turning our attention to strategies for the coming 12 months.

So, I’ll dive in with the help of others who have been brave enough to go before me.

Not to be a buzz kill, but I think the biggest retail story of 2019 will the be the deceleration of consumers’ retail spending. We’re coming off an incredible holiday shopping season in the United States, even if it was lackluster elsewhere. It was a time to forget about the retail apocalypse and a time for investors to bolster retail stocks.

Where is consumer confidence headed?

But consumer confidence is faltering. The energizing effects of tax cuts in the United States have faded. Volatility in the stock markets has some on edge. Ongoing trade skirmishes are unsettling and the unpredictable political spectacle in Washington D.C. is reason for pessimism. In the United Kingdom, shoppers seem bogged down by uncertainty over the terms and effects of Brexit, while other European countries are suffering their own political uncertainty.

That said, ecommerce will continue to grow at double-digit rates. Consumers will embrace mobile commerce even more strongly. Buy online, pick up in store, which saw a nearly 50 percent increase in sales over the holiday period, will continue to grow as retailers recognize its popularity and consumers adjust to the possibilities. And new retail success stories will appear to come out of nowhere, as the digitally native retailers continue their rise.

So what will the retail world that all this plays out in look like? For that, I turn to the experts.

McKinsey & Company says 2019 will be the year that fashion brands go all-in on the idea that consumers are looking for a different breed of retailer, one that is nimble, thinks digital first, strives for speed to market, is incredibly transparent and stands for something. It is the recipe that digitally native retailers have been differentiating themselves with for years.

The National Retail Federation says we should keep an eye out for the emergence of “storefront as a service.” The idea, already a business by direct-to-consumer handbag seller Selene Cruz, is to help online-only brands dip their toes into the brick-and-mortar world. In short, this new retail SaaS provides the stuff that is a store — a place to display products, inventory services etc. — in return for a fee and commission.

Absolunet’s 2019 view

Ecommerce agency Absolunet is out with its annual look at coming ecommerce trends. Among the most interesting prognostications in its “10 Ecommerce Trends 2019” are:

The rise of the ethical consumer

To McKinsey’s point, Absolunet says shoppers are going to want to know how products were made, how big an environmental footprint it has and whether the brand pushing it is socially responsible in general.

The end of free returns

No doubt the cost of returns is a crusher for retailers. Absolunet said the cost of returns was $400 billion in 2018, a 53 percent increase from 2015. Consumers’ embrace of ecommerce has created a whole different buying ethic. Shoppers think nothing of ordering two or three similar items in different colors or sizes, fully intending to return one or two of them. Some will even go so far as buying apparel, wearing the item to an event and then returning it. Still, in the age of Amazon, eliminating free returns is going to be a difficult proposition. Consumers have said repeatedly that return policies play a big role in where they shop online.

Retailers will hire their first AI employee

Well, maybe not their first, as artificial intelligence is already a key to retail functions from in-store robots to online personalization systems to fraud prevention. But what Absolunet is talking about is AI-powered content producers. (Hey! Wait a minute.) Retailers are struggling to produce the volume of product content that is needed in a world in which merchants are carrying up to 10 times more SKUs than they did a decade ago. AI agents will take a bigger role in creating, optimizing and managing everything from product descriptions to photos and videos.

Whether the raft of retail predictions floating around as we start the year are right or wrong, there is no doubt that 2019 will be an exciting year for retail. And if it’s anything like years past, some of the most stunning events will be the ones that no one saw coming.

Happy New Year.

Mike Cassidy

Mike Cassidy

Mike is the head of storytelling at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at [email protected].