Predictions, Observations for 2018
• Expect returns from holiday 2017 to be a big challenge. With the short labor and logistics problems that have begun to emerge, trying to return items in-store — still the preferred method even if goods were purchased online — is likely turn nightmarish. Again, this is an area that retailers have lost sight of in light of having a sharper focus on outbound issues such as delivery and targeting with consumer data. Returns will be retailers’ first and most difficult challenge to address in 2018.
• Expect a burst of bankruptcies early in the year followed relative calm. Following that, retailer financials will have stabilized enough to be able to say we have passed through the storm. The next wave of distress will come from financial mistakes rather than failure to shift to the digital era.
• Store labor is already one of 2018’s biggest retail challenges. Between short sales staff even at some high end stores, and the need for more highly trained staff even at regular and mass retailers caused by the in-store experience imperative, labor looks to be one of the most sizeable cracks in retail’s infrastructure. This was much in evidence this holiday season.
• Logistics and tech breakdowns will be another area retailers will really need to focus on in 2018. With the focus on the in-store experience, some of these crucial back-end functions were overlooked, resulting in several costly crashes over the holidays. Retailers need to refocus on their online offerings as a digital store experience, as opposed to the current utilitarian view taken of websites.
• Expect a growing number of cross-segment, cross-industry mergers. We refer to these as neumarkets with CVS-Aetna as an example. Companies will move beyond traditional retail to blur markets and redefine consumer expectations. Adjacent industries such as entertainment, technology, hospitality and healthcare are potential players to get involved.
• Investments in supply chain – from origination to last mile – will accelerate as retailers try to get their physical assets on par with the investments they have made in digital data and customer insights.
• Reacting to a fear of being left behind, retailers will begin to experiment with cryptocurrencies in ways that will be clunky and potentially disastrous financially. Meanwhile, consumers will shy away from mainstream use of cryptocurrency in favor of the frictionless transaction enabled by mobile commerce.
• Expect a burst of bankruptcies early in the year followed relative calm. Following that, retailer financials will have stabilized enough to be able to say we have passed through the storm. The next wave of distress will come from financial mistakes rather than failure to shift to the digital era.
• Store labor is already one of 2018’s biggest retail challenges. Between short sales staff even at some high end stores, and the need for more highly trained staff even at regular and mass retailers caused by the in-store experience imperative, labor looks to be one of the most sizeable cracks in retail’s infrastructure. This was much in evidence this holiday season.
• Logistics and tech breakdowns will be another area retailers will really need to focus on in 2018. With the focus on the in-store experience, some of these crucial back-end functions were overlooked, resulting in several costly crashes over the holidays. Retailers need to refocus on their online offerings as a digital store experience, as opposed to the current utilitarian view taken of websites.
• Expect a growing number of cross-segment, cross-industry mergers. We refer to these as neumarkets with CVS-Aetna as an example. Companies will move beyond traditional retail to blur markets and redefine consumer expectations. Adjacent industries such as entertainment, technology, hospitality and healthcare are potential players to get involved.
• Investments in supply chain – from origination to last mile – will accelerate as retailers try to get their physical assets on par with the investments they have made in digital data and customer insights.
• Reacting to a fear of being left behind, retailers will begin to experiment with cryptocurrencies in ways that will be clunky and potentially disastrous financially. Meanwhile, consumers will shy away from mainstream use of cryptocurrency in favor of the frictionless transaction enabled by mobile commerce.