You can watch Deborah Weinswig, the executive director of the retail research agency, FBIC Group, give a quick summary on what trends to look out for in the video below.
We’ve also trawled through and plucked out a few key trends that we think are the most relevant to New Zealand market. Some of the trends are already well underway here.
- Sustainability and ethics – or the “caring economy”
This is the idea of “you are what you buy,” being driven by millennials. FBIC predicts more retailers will add sustainability practices to their businesses this year. Some businesses are already doing it to great success, like Warby Parker, which has a buy a pair of glasses, give a pair of glasses deal, or more locally, Eat My Lunch, which lets you buy a lunch and gift a lunch to a child in need for the same price. The latest data from Nielsen shows two in five Kiwis will pay more for a brand from a company boasting environmental or social sustainability credentials, and 22 percent bought a product or service from a company supporting a worthy cause in the last month even though it was slightly more expensive.
- The silver economy
While millennials are often the subject of endless retail and marketing analysis, statistics show the “silver economy” is not to be ignored. Consumer aged 60+ make up 23 percent of the world’s population and are becoming increasingly tech-savvy and health conscious. FBIC reports this group of consumers is growing two-and-a-half times as fast as the global population, so their shopping needs will need to be catered to as well. They also are healthier and longer living than previous populations, so care more for health-based products. FBIC predicts products like Fitbits will sell very well to this section of the market.
- Experience economy
We went into detail on this key trend in this feature and will continue to do so, as we believe this will be important in retail for years to come. Weinswig describes this as “buying fun, not stuff” and like the caring economy, it’s being driven by millennials. A Harris Poll survey has found 78 percent of millennials prefer to spend money on experiences rather than goods. This has led to traditional businesses adding experiential offerings to customers, like live events and dining options. Kiwi Property rolled out the Brickworks dining area last year at LynnMall, seeking to combine shopping and upmarket dining in one place.
Athleisure is a growing segment of the apparel industry that brings athletic wear into everyday wardrobes (you may know it better as activewear). Pieces by sports brands such as Nike, Adidas and Lululemon are no longer just being used by consumers when exercising – they’re making their way into everyday wear. This also plays into the aforementioned experience economy, as many consumers are focusing on buying more experiences and less things, so multiuse clothing is popular. This trend is being explored by New Zealand brand Icebreaker to great effect with its “be the adventure” phrase. Casualisation of workplaces has also been attributed as a factor.
- Online fashion resale
Ecommerce’s growth is behind a burgeoning trend for secondhand clothing to be sold online or rented out. The trend started on Facebook buy and sell groups, like Walk In Wardrobe, but as people were increasingly targeted by scammers, official websites popped up to cater to this demand. Designer Wardrobe, a New Zealand based secondhand shopping site for designer clothing is one example.
- Smart malls
Another prediction laid out is that pressure from ecommerce and oversupply of malls in some markets will make malls get smarter with technology. Globally, some shopping centres are rolling out one-stop shop apps that have store finders, restaurant queueing and parking and instore navigation. Others are compiling data from the shops, overall mall and search engines to analyse shoppers’ behaviour and personalise promotions. Westfield, which operates several malls in New Zealand, has a Silicon Valley-based part of its business called Westfield Labs to design and experiment with retail innovations. Kiwi Property has also been experimenting with its malls, opting for a virtual reality experience instead of the traditional Santa meet-and-greet last year.
- Social media influencers
Social media and the power of influencers and celebrities will play a huge part in what items are popular. Influencers with like New Zealand makeup guru Shaaanxo, who has millions of fans, wield a huge amount of influence over their followings and can cause products to sell out by so much as recommending them in a YouTube clip. Brands are increasingly picking up on this and using it to their advantage.
- Customer loyalty
Customer loyalty is becoming increasingly difficult to keep as online shopping has opened up a world of different options. Retailers are now experimenting with ways they can personalise their offers, like Walmart, which launched a service that discounts prices if they find the same item cheaper somewhere else. As well as this, Weinswig says plastic loyalty cards are becoming outdated in favour of smartphone-based options, like mobile wallets or apps. Apps in particular can help personalise offers and retain customers.
- Ecommerce players going offline
As we explored in this article and this article about Amazon opening bricks and mortar stores, pureplay retailers are increasingly adopting an omnichannel approach and opening stores. Birchbox, Bonobos, Warby Parker have all opened stores despite starting off as online-only. Warby Parker’s bricks and mortar stores make more than US$3000 per square metre, putting it in the same league as Tiffany and Apple. As well as this, more than 85 percent of its instore shoppers will later visit its website, driving further sales.