Expected retail trends for 2018

  • Opinion
  • December 7, 2017
  • Courtney Devereux
Expected retail trends for 2018

The retail industry is a fast-paced, uncertain minefield, where retailers must keep up with the latest trends and expectations to survive in the market. This year saw many trends come in and out, but what can retailers expect to face from 2018? 

The biggest retail industry trend for 2017, as decided by NZ Retail's 'Retail Yearbook' was digital buy-now pay-later systems, with co-location of retail and hospitality offerings coming in second. 

Examples from both these trends came in thick and fast as retailers worked to keep consumers engaged and interested. A danger for retailers is not changing as consumer expectation does, running the risk of becoming stagnant and falling off the map.

So, what trends do we expect to see grow in 2018?

Payment systems

One of the most prominent trends of 2017 saw a significant number of retailers offering buy-now pay-later payment systems. Four competing companies offering this service launched within months of each other this year.

It's expected more online and physical stores will start offering more diverse payment systems as consumers seek the convenience of split payments. The opportunity to buy and receive items and pay for them off in instalments is attractive to customers who eschew traditional credit paths but want goods instantly.

With retailers such as Glassons, Kathmandu, Trade Me, Cotton On, North Beach, Superette, Stirling Sports and Hallensteins (to name a few) jumping on the financial opportunity of split payments, it is expected that in 2018 more retailers will get involved to have some sort of same offer.

Same-day shipping

Even as online shipping grows ahead of bricks and mortar, customers still want the instant gratification of buying something in person and being able to have it immediately. Several retailers around New Zealand have tried to target this customer by offering same day or two-day shipping. Places such as Glassons, Hallensteins, The Warehouse, Onceit and The Iconic have been pushing out their tactics of consumer targeting by offering fast delivery.

It's expected in 2018 that as more shops develop strategies to target consumers, fast shipping will be one of the most important areas to focus on. Consumers are still likely to shop on impulse, even online, and the promise of same day shipping is likely to fuel that impulse. If consumers are shopping for a specific occasion, the promise that the item will be delivered on time will most likely be a deciding point for most buyers.

Enhancing the shopping experience as a whole

As the retail market becomes more and more saturated, independent retailers are starting to enhance the experience of their store to draw consumers in and sell products.

This year was a strong one for experimentation in retail - no longer is walking in, browsing, buying and leaving the norm. Customers this year were targeted with virtual reality, artificial intelligence, product interaction, and demonstrations.

Retailers battled to use what they had at their disposal to stick in consumers mind and stand out among others in the same market. As more competition settles in for 2018, including the new Australian Amazon, retailers will be honing their techniques of using experiences to get consumers in-store.

Enhancing the in-store experience can also include the store fit-out itself. As design trends come in and out, retailers are turning more towards professional shop designers to create a space that uses all aspects to gain the attention of shoppers. From the lighting to the flooring, no aspect is overlooked.

We expect to see more expertly designed shops in 2018, with each catering towards adding to the experience consumers have while they’re in store.

Enhancing the experience with hospitality

Another side of enhancing shopper experiences is through the use of hospitality offerings, either in-store or in surrounding areas. This year, the use of using a food and drink aspect to draw customers in was seen from retailers in almost every sector. Retailers included cafes in their stores, like Citta Design and Seletti, and also added whole dining areas to surrounding areas to increase foot traffic, like Sylvia Park and LynnMall.

According to Vicki Lee from Hospitality NZ, hospitality and retail will always have a certain pull to them, but “are more effective at tempting consumers in when working together.” More now than ever, there is more competition in each sector which results in retailers needing to tempt consumers inside.

The continued success of the retail and hospitality sectors in 2018 requires careful management and constant control of things such as costs, coupled with a detailed understanding of the market. That both industries have continued to do so well is a testament to the incredibly hard work retailers and members of the hospitality are putting in, and will most likely continue into 2018.

Social media marketing

According to the Standard Media Index New Zealand agency ad spend for 2016/2017, digital advertising was one of the highest growing media types, seeing a 20.8 percent growth ($363,768,282 million).

In May of this year, StopPress reported the Advertising Standards Authority annual ad spend figures. The figured showed that digital lead the way with a growth from $801 million to $891 million in 2016, which was 34.6 percent of New Zealand’s advertising revenue.

This digital advertising can correlate directly towards the success of social media marketing. A significant proportion of digital spend is made direct from publishers such as Google or Facebook. These social media platforms are used for a higher level of direct targeting, using data and analytics to target a retailer’s demographic, improving the reach for the money spent.

As influencers continue to pop up in quick succession (more on that next), social media is becoming the go-to place for brands to promote their pieces.

Harry Carew, SMB accounts manager for Facebook (Singapore), told The Register back in May that Facebook pages are the best ways for companies to reach a large audience.

“100 million hours of video are being consumed every day on our feeds. The average attention span is 1.7 seconds.”

There is a whole generation on social media, and that's a whole lot of possible consumers retailers are missing if they aren’t using their platforms to the fullest extent. As 2018 comes around, it is likely retailers have already planned a bulk of their advertising. With more brands now having their own social media pages, it is expected that they will use them to their advantage when it comes to reaching millions of potential consumers on social media.

Influencer marketing 

The rise of influencer marketing was one of the most rapid trends of 2016 and 2017. Both macro and micro influencers quickly became the face of brands as retailers got involved with the billion-dollar industry. All this year it was impossible to go on any social media without seeing a sponsored post by seemingly-regular people. Everything from apparel to accommodation and everything in between was seen promoted across our accounts as a way of advertising.

Influencer marketing can be a great way for a label to increase its brand loyalty if done correctly. Pairing the right content with the right person, as well as making sure the partnership is clearly stated is a key part of continuing the trend. It is expected that in 2018 influencer marketing will continue to grow as even PR companies get involved with connecting brands and people.

Fuse content and brand experience director Holly Lindsey told StopPress in March that developing this strategy into 2018 comes from understanding the audience.

“To be successful in this space it is crucial to understand the audience, what content and conversation they are currently engaging in and most importantly who influences them. With this insight, you can identify the right influencers, content angles and themes that will engage your target audience and deliver real results to the business,” she says.

There are still a few grey areas when it comes to the rules around influencer marketing, but as public relations companies get involved, more guidelines will be laid out as to the relationship between brand and influencer and how it is handled.

2018 will probably see influencer marketing continue to grow, although it is likely it will shift into a more structured, regulated way as stricter rules arise. Yet brands must still work to invest in quality rather than quantity, and the market's saturation will still bring competition.

Collaborative pop-ups

2016 saw a wave of collaborations in the apparel market, but this year collaborations moved past just clothing into more of the retail sector. Coffee brands partnered with home décor, cakeries partnered with bookstores and clothing partnered with cars.

Working with another company means those involved can further expand their audience, potentially doubling their target base. The main purpose, besides driving profit, is to create brand awareness. A collaboration can be used for an event, such as an opening, a collection or even to introduce a new brand to the country. These collaborations are usually in pop-up form or for a limited time, meaning that the limited supply can create a stronger demand.

As more successful collaborations come and go it is expected further that in 2018 brands will join forces to target a larger demographic, while also increasing their own brand awareness. There are no rules surrounding who a brand can partner with, some do well to stay within their own demographic, well others do better to expand out when they usually wouldn’t. A successful brand collaboration comes from each partner gaining something from the experience they wouldn’t have been able to do individually.

Social enterprise involvement 

This year a lot of New Zealand’s largest retailers joined social enterprise movements. The Warehouse Group, Countdown, Lonely and Barkers, among others, have been working towards making their business model more socially conscious. Whether that be through charity donations, support programmes, environmentally-friendly practices or updated training guides, most retailers are becoming more aware that they must look after the community that supports them.

As consumers become more socially conscious about what they buy and the places they buy from, retailers will most likely increase their social enterprise work in 2018 to meet these consumer demands. 

Retail is fast, trends change quickly as do consumer expectations. By analysing the trends that have become popular in 2017, retailers can predict what will continue its growth into 2018. But trends can die as quickly as they were created, so importance must be placed on keeping ahead and researching what will fit best into your business model.

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