Here’s What’s in Store for Retail in 2020

What to expect from apparel and fashion to grocery and restaurants

Woman picking up a Walmart box, stacked burgers, fashionable man riding a bike
Among the trends to look for are click and collect, healthier menu options and fashion brand alliances.
Sources: Walmart, Denny's, Bonobos

Even before the recession of 2008, there were signs that the retail sector was in trouble. Many brands at the time didn’t view online as a threat, and when they began to feel the effects in the 2010s, it was too late for many.

Leveraged buyouts by private equity of the likes of J.Crew and Gymboree in late 2010, premised on growth overseas, soon faltered. Teen retailers such as Wet Seal and Delia’s, lacking loyal customer bases, filed for bankruptcy in early 2015 and late 2014, respectively.

Even Walmart and Target seemed in peril, before they realized that to compete with Amazon, they had to spend—and invest they did.

Retail today is a battleground, with cash-rich Amazon, Target and Walmart all fighting for market share, offering consumers ever-cheaper goods and more convenience, subsidized by their balance sheets.

This puts increasing pressure on their competitors to be more creative than ever, to excite shoppers to visit both their physical and online stores.

In December, Adweek outlined a number of broad trends across retail we’ll see this year, including more media networks, voice shopping, personalization, improvement in the customer experience and increased attention to consumer privacy.

But there are also important trends developing within specific segments. Here’s an overview.

Apparel

Bonobos

The apparel industry is likely to witness a marked decline in outlet centers, similar to the fallout in the suburban shopping-mall space, says Andrea Weiss, co-founder of The O Alliance, a retail consulting network.

Sucharita Kodali, a principal retail analyst at Forrester Research, agrees. “That seems like the next domino to fall. It’s too easy to get cheap merchandise online, and the brands aren’t putting good merchandise in the outlets to drive you there,” she says.

Outlets depend on the appeal of the wholesale brands sold in them, explains Weiss. If those brands lose relevancy, then department stores stop carrying them, and they cease to be a draw in the outlet centers. This challenge becomes particularly acute as department stores replace legacy brands with contemporary labels such as Bonobos, Madewell and Topshop.

“Only [outlet centers] that are well-placed and well-maintained will be successful,” notes Greg Portell, a lead partner of consulting firm Kearney.

Kodali, however, says that if outlet stores embraced a “drop” model similar to streetwear, they might have a chance of survival. “But the merchandise isn’t that compelling, and the marketers would need to be far more creative,” she says. “They are too tied up in Google search words now, and that keeps them from thinking outside the box.”

Restaurants

Denny's

In the restaurant space, look for chains to continue to increase healthier menu options, from plant-based protein to keto to Whole30.

Denny’s, for example, is one of the most recent mainstream restaurant chains to expand a plant-based burger offering made by Beyond Meat from an initial launch in 2019 at its Los Angeles locations to its sites nationwide.

But while plant-based proteins will increasingly be on the menu, the trend will be more akin to the current oat milk phenomenon, Kodali says. Oat milk, for one, is part of the larger milk alternative category, and two, even though the global alternative dairy category is rapidly growing, it is still a small segment when compared to dairy.

In 2018, the category was valued at nearly $18 billion worldwide, and that includes all alternative dairy products, not just beverage. At this stage, plant-based protein is about giving consumers more choices to drive traffic.

Restaurants offering options tied to lifestyle preferences is a trend that’s here to stay, says Sara Al-Tukhaim, a retail analyst at Kantar. “It’s about giving people the option.”

Grocery

Walmart

This story first appeared in the Feb. 10, 2020, issue of Adweek magazine. Click here to subscribe.

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