2018 was a year of growth for the retail industry as several brands saw accelerated growth rates due to tax cuts and low unemployment. According to the retail industry analysis by experts at Infiniti Research, 2019 will be a precarious year for players in the retail sector. As the stock market is in flux, the future of retail is expected to be dominated by steepening tariffs. Furthermore, another intriguing retail market trend is emerging markets are taking on a greater share of global growth. However, these challenges could also present several opportunities for savvy retailers who are willing to face the winds heads on. Here’s our take on the key predictions for the future of retail in 2019 and also how retailers can stay prepared for the upheavals in the market.
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Top predictions defining the future of retail
Consumer centricity to go mainstream
Putting customers at the center has been one of the key factors of focus for most companies in the retail industry today. But most companies have realized that holding a strong market position involves more than merely monitoring and connecting with customers on social media. The future of retail will revolve largely around the use of advanced technologies like Voice of Consumer (Voc) analytics. Such retail industry trends will allow retailers to determine what their customers want and deliver it with speed and at scale. Data will play an integral role in the future of retail to meet customer needs and expectations.
Impact of increasing tariffs
The retail industry will begin to see the real impact of the Trump administration’s tariffs on the Chinese exports which will increase steadily this year. A major portion of the burden of these rising tariffs will ultimately fall on U.S. shoppers. A detailed retail market analysis undertaken by our experts also reveals that companies will be soon be faced with making decisions to determine the categories and products where they raise prices and push the cost increases onto the customers, and where they need to absorb the cost increases themselves. This may result in retailers evaluating whether it makes sense to exit certain categories which they are not able to sell profitably. The future of retail in the UK and EU will also face similar challenges.
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Algorithms will take control
As the future of retail is now largely being driven by innovative tools to leverage consumer data, 2019 will be a year where retailers increasingly leverage data to make decisions relating to what to offer to the customers. While data has long been available to retailers, its true potential wasn’t realized until the retail industry learned the hard lessons from some popular e-commerce websites, whose assortment decisions are made exclusively using data and bots. The data available can be used to build tailored assortments and target customers effectively to drive conversions.
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