CRE’s retail sector has undergone massive changes in the last few years. Due to the ever-evolving consumer, the rising popularity of e-commerce and a wave of store closings, the future of brick and mortar retail has been unpredictable.
Besides these challenges, 2019’s retail sector has been on the rise. The first half of the year has paved the way for a new era of retail, and big changes are right around the corner. Here’s what the experts are expecting out of the year’s third quarter.
The Rise of Niche Retail
As a result of the large scale store closures, retailers are being forced to step up to the plate - or suffer the consequences. Today’s consumers favor specialty, meaning that the era of cookie-cutter retail is far gone. With that being said, small is the new big. Niche products are outshining traditional retailers, and big-named brands are eager to merge with these smaller and savvier companies.
Faster Delivery Services
Ready, set, ship! Q3 will see the great race for delivery, as retailers are fighting to fulfill orders faster than ever before. Amazon Prime’s famous 2-day shipping policy sparked the trend of immediate satisfaction, and the average consumer’s patience is dwindling.
Studies show that the maximum delivery time shoppers are willing to receive free shipping is 4.5-days, a full day less than the 5.5-day average recorded in 2012. This has sparked brands like Target and Walmart to begin new same-day delivery programs, all in an effort to one-up each other.
Subscriptions Taking Over E-Commerce
Modern consumers value convenience, speed, and automation. This created the perfect formula for Q3’s hottest retail trend - subscription-based online programs. Shoppers sign up for services that create specialized packages tailored around a key interest, which are delivered to their door at regular intervals.
Not only do these programs save shoppers money, but they also provide a sense of excitement and specialization that isn’t present in traditional online shopping. This sector of e-commerce has grown from $57 million in sales during 2010 to more than $2.6 billion by 2016, and it’s anticipated to expand even more.
Omnichannel as the New Norm
By now, almost every major retailer has both an online and physical presence. It’s imperative to be active in both platforms in order to meet shoppers’ expectations. The catchphrase ‘bricks drive clicks’ stands true, as a brand’s physical store actually increases website traffic by up to 27%. This builds a diverse sales strategy, and 2019’s retailers are taking advantage of both areas in order to sustain success.
AI in Stores
2019 was the year that technology took the forefront of brick and mortar stores. Augmented and virtual realities can be experienced at any Sephora store or Tilly’s, and consumers are absolutely loving it. Modern shoppers are so comfortable with AI in stores that the trend is expected to explode in the coming months and beyond.
2019’s Q3 has a lot in store (and online) for the world of retail. What are you looking out for? To learn more about the latest CRE news, visit our blog.