As the year winds down, it’s the perfect time to revisit my predictions of 7 Retail Trends That Will Dominate 2018 to evaluate whether they came true. This annual review gives retailers and suppliers proof of industry trends so they can adapt their 2019 business strategy accordingly. Here are my 2018 retail predictions, followed by evidence of each trend:

Predicted Trend #1: Voice
Verdict: In 2018, consumers and companies invested in conversational commerce.
Proof: Adobe Analytics found that as of this summer, 32% of U.S. consumers owned a smart speaker and that figure could balloon to nearly 50% by the end of the year. 1Kastrenakes, Jacob. Nearly half of all US homes could have a smart speaker this year, Adobe says. The Verge. September 11, 2018. Another study found 20% of consumers who use voice ordering apply the technology to buy groceries, and experts say voice ordering will skyrocket from $2 billion today to $40 billion by 2022. 2Thakker, Krishna. Kroger enables voice ordering for grocery pickup. Grocery Dive. November 8, 2018.

To deliver the convenience of voice shopping, Kroger launched voice-enabled ordering through the Google Assistant voice app, which consumers can access through their mobile phones and smart speakers. Walmart and Target also collaborate with Google, and voice leader Amazon offers consumers voice-activated shopping options with its Alexa voice assistant and Echo smart speakers.

Predicted Trend #2: E-grocery
Verdict: Whoo-whee! Retailers were ravenous for this trend in 2018.
Proof: Since 2013, U.S. online grocery sales have tripled and experts predict sales will quadruple in the next five years, as more consumers trust and embrace the convenience of online grocery shopping. Beyond tech-savvy Millennials and time-starved young parents, grocery retailers are targeting older consumers and those with mobility issues for online grocery services.3 Thakker, Krishna. Report: Online grocery sales set to quadruple by 2023. Grocery Dive. October 18, 2018. Last month, a survey found that 44% of Americans planned to purchase groceries online during the holiday season, more than double last year’s rate of 20%.4 Sweeney, Jennifer. Survey: E-commerce grocery demand this holiday season is twice as nice. Grocery Dive. November 16, 2018.

While Amazon leads in online grocery thanks to Amazon Fresh and Whole Foods, intense competition led the e-commerce giant’s market share to plunge from 74% to 38% year-over-year. 5 Thakker, Krishna. Report: Despite increased competition, Amazon will continue to lead online grocery. Retail Dive. December 11, 2018. Walmart, Instacart, Kroger, FreshDirect and Peapod represent all of the other major grocery chains. 6 Thakker, Krishna. Report: Online grocery sales set to quadruple by 2023. Grocery Dive. October 18, 2018. Albertsons recently launched its Digital Marketplace and Ahold Delhaize has integrated e-grocer Peapod into store fulfillment processes. E-grocery has become so strategically important that Walmart has even proposed a grocery pickup-only store as its first stand-alone, drive-up grocery facility. 7Redman, Russell. Walmart eyes pickup-only store in former Dominick’s. Supermarket News. September 26, 2018.

Predicted Trend #3: Private label
Verdict: Retailers view private labels as legitimate, lucrative, loyalty-building brands in their own right.
Proof: Private label sales continue to outpace national brand sales, with dollar sales of private label growing 5.8% compared to 1.5% for national brands over the past year. Research firm IRI notes demand for store brands remains high even in the strong economy, with eight  out of 10 consumers saying they buy these products at least occasionally.8Wells, Jeff. Private label sales soar, but grocers are off pace. Grocery Dive. November 14, 2018.

In response to consumer demand for private label, Target launched a new exclusive line of kitchenware called Cravings with celebrity and cookbook author Chrissy Teigen. The big-box retailer also rolled out its newest private label apparel brand, Prologue.9Ruff, Corinne. Target dishes up exclusive Chrissy Teigen kitchen line. Retail Dive. September 14, 2018.

Within the home décor category, Amazon launched two new private label lines to take on rivals Walmart and Target, as well as established home brands Wayfair and Pottery Barn.10Howland, Daphne. Amazon unveils more private label home decor lines. Retail Dive. October 30, 2018. Following Toys R Us’ departure, Amazon launched new private label toys under its own brand AmazonBasics.11 Amazon Boosts Private Label Initiatives With Own Brand Toys. Zacks Equity Research. December 11, 2018.

In consumer packaged goods (CPG), Walmart introduced Sam’s Choice Italia, a premium private label line including sauces and pastas, plus store brand wines in 1,100 stores.12Thakker, Krishna. Executive of the Year: Doug McMillon, Walmart. Grocery Dive. December 3, 2018.

Predicted Trend #4: Marketing personalization
Verdict: It pays to get personal.
Proof: Customizing marketing campaigns and content helps retail companies create relevant communications that consumers are more willing to act on. That’s why arts and crafts retailer Michaels is unifying consumer data across channels to support an integrated shopping experience and deliver real-time, personalized communications to shoppers. 13O’Shea, Dan. Michaels deploys personalized shopping tech. Retail Dive. December 5, 2018. 

Suppliers are actively adapting to this trend, too. For instance, beauty brands are collaborating with tech company Perfect Corp. and its makeup app Beauty 3.0, which combines artificial intelligence (AI) and augmented reality (AR) to provide a personalized, virtual try-on experience. The company has attracted 700 million user downloads and 200 beauty brands, including Estée Lauder, MAC Cosmetics, YSL and Target.14 Alaimo, Dan. YouCam Makeup combines AI, AR for Beauty 3.0. Retail Dive. November 19, 2018.

Predicted Trend #5: In-store tech
Verdict: Retailers are blurring the lines between online and offline retail by adding more technology to physical stores.
Proof: To make shopping more efficient in time for holiday shopping, many retailers merged their brick-and-mortar and online service to maximize sales. Walmart launched its Check Out With Me service, which allows consumers to buy items in-store using employees’ handheld devices rather than waiting in the checkout line.15O’Shea, Dan. Walmart arms store associates with online shopping app. Retail Dive. December 5, 2018.

Target also introduced a similar technology called Skip the Line to accelerate the checkout process in its busiest departments.16Garcia, Tonya. Target launching ‘Skip-the-Line’ checkout technology, will open at 5 p.m. on Thanksgiving. MarketWatch. November 5, 2018. Meanwhile, Walmart announced plans to bring a fleet of autonomous robotic floor scrubbers to its stores to free associates from repetitive tasks so they can focus on serving customers.17Walmart Employing Robotic Floor Cleaners. Winsight Grocery Business. December 3, 2018.

Predicted Trend #6: Last-mile innovation
Verdict: Retailers no longer expect consumers to come to them; now retail supply chains extend to shoppers’ doorsteps.
Proof: As e-commerce grows in popularity, retail trading partners are getting creative with how they deliver online orders. Notably, Retail Dive bestowed its Disruptor of the Year award to Nuro, an autonomous delivery startup that partnered with Kroger to deliver online grocery orders to consumers’ homes. Similarly, Walmart is working with Ford to deliver merchandise, including groceries, using autonomous vehicles. Some companies – including Amazon – have even started using tents and empty parking garages to deliver holiday packages during the critical end-of-year sales campaign.18Phillips, Erica E. E-Commerce Companies Get Creative in Quest for ‘Last Mile’ Space. The Wall Street Journal. December 9, 2018.

Predicted Trend #7: Artificial Intelligence
Verdict: AI is all around, whether we realize it or not.
Proof: What’s fascinating about AI is how this technology underpins most of this year’s hottest trends, including:

  • Voice shopping: Amazon’s voice assistant Alexa uses AI to serve consumers with conversational commerce and it continues to mature by accurately distinguishing what consumers want 19Wiggers, Kyle. Alexa can now better determine if you’re talking about a book, movie, or soundtrack. VentureBeat. December 11, 2018.
  • Marketing personalization: Sephora offers an AI-based app to help consumers find specific shades of cosmetics by simply uploading a photo20Azfar, Rakin. Sephora wields AI for new wave shopping experiences, innovating in personalization. Retail Dive. 2018.
  • E-grocery and last-mile innovation: Kroger partnered with Nuro, whose autonomous vehicles operate with AI while delivering online grocery orders
  • In-store technology: Walmart’s floor-scrubbing, in-store robots use AI. And to serve hungry shoppers fast, Amazon is considering expanding its AI-drive AmazonGo cashierless store model to up to 3000 stores in the next few years. This expansion could threaten convenience stores, quick-service restaurants and food trucks by using technology like AI and mobile pay to eliminate checkout lines and maximize efficiency.21Soper, Spencer. Amazon Will Consider Opening Up to 3,000 Cashierless Stores by 2021. Bloomberg. September 19, 2018.

2018 retail review
Time to buy a Powerball lottery ticket! As predicted, 2018 retail trends reflect how diverse technologies help retail evolve from the traditional model of selling to a mass market through brick and mortar stores to selling to individual shoppers wherever they are located by making retail more convenient, relevant and efficient. Gaining deeper consumer insights, and delivering superior service and variety are underlying themes common among this year’s retail trends.

To prepare for the year ahead, stay tuned for my 2019 retail trends post, coming in January. Happy holidays!

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