It’s been another tough old year for the retail sector. Store closures and rationalisation have hit the headlines on a monthly basis, while the ONS has reported one of the most troubling years on record. To put this into perspective, over 140,000 jobs were lost and over 9,000 stores closed their doors. Online and ecommerce continues to disrupt the way shopping is done and changing buyer behaviours make it harder than ever to predict how to hold on to the share of spend.
However, it’s also potentially an exciting time for those retailers who are prepared to embrace the fluidity of the sector and try things a little differently. Technology is already influencing the purchasing process in a huge way; from AI and VR to cash-free payments. Architects and designers are adopting a more playful approach to store design and there are some very clever brand partnerships appearing to make the most of precious retail space and increase the level of footfall.
In a new and perhaps unexpected movement for retail, activism and ethical shopping is emerging as a key priority, largely driven by millennials and Gen Z shoppers who want better for the planet and who are demanding their voice is heard.
So, what does 2020 hold for this troubled sector. Here’s our top five predictions at Sigma.
Sustainability
This is a huge area for retail that covers a whole breadth of issue. As a sector, retail is one of the largest contributors to global carbon emissions largely due to the amount of import/export that takes place. It is also a heavy user of plastics across a multitude of packaging. Last year, a high number of brands across fashion, beauty and food retailing (amongst others) committed to reducing their packaging and being more environmentally friendly in the packaging they do need to use. This is set to continue at pace in 2020.
Supply chain management will remain in focus as retailers look to ensure that the source materials that are used in the products they manufacture or sell are ethical and sustainable in their origins. For example, high-street stalwart Debenhams has unveiled its new sustainability programme to highlight new benchmarks for UK department store retailing in the 2020s. Its new commitments include sustainably sourcing 100 per cent of its cotton by 2022, and all own-brand products sold in store will have at least one sustainable attribute by September 2020.
The focus on food waste is likely to continue as consumers become more aware and eco-conscious, placing increased pressure not just within the home and personal waste but on food retailers to be as responsible as possible. There will be increasing pressure on retailers to forecast their food waste as accurately as possible and where it does occur, to partner with local food-donation programmes so that true waste is minimised as much as possible. As a result, retailers are likely to invest in understanding consumer behaviour and events that affect demand – from traditional factors such as the weather or payday to more emerging indicators like basket size or purchase behaviours.
Driven as much by customer demand as by retail corporate social responsibility, the pressure will continue into 2020 to ensure that the sector is taking care of the planet as well as the bottom line.