In January I went out on a limb with my 14 Predictions For Retail in 2019. So how are things looking so far?
- Apocalypse? No. The retail apocalypse narrative continues to be part of the zeitgeist, and it looks like we could see a record number of store closingsthis year. Yet thousands of stores will open, dozens of primarily brick & mortar retailers with remarkable business models are killing it, physical retail will still show positive growth, while accounting for more incremental growth than e-commerce. I guess it’s a matter of perspective. And my perspective continues to be physical retail isn’t dead; boring retail is.
- The collapse of the middle continues apace. I wrote about how it’s “death in the middle” in 2011 and started writing and speaking about retail’s great bifurcation in 2015. When we look at the retailers that are closing vast amounts of stores or going away completely most often they’ve gotten stuck in the mediocre middle. We’ll see more of the same the balance of the year.
- The stores strike back. I followed this prediction up with a focused piece in February as Walmart, Target and a host of other traditional retailers that were starting to see their stores as assets, instead of liabilities posted materially improved results. We continue to witness many more retailers roll-out of buy online pick up in-store (BOPIS), curbside pick-up, accelerated delivery times and other attempts to neutralize Amazon. The big issue now is avoiding a race to the bottom.
- Isn’t ironic? For DNVB’s now it’s mostly about brick & mortar. Just about every day it seems that another disruptive brand announces a store opening. Investor money is piling into concepts like Neighborhood Goods to help digitally-native brands get into physical retail, despite the prior insistence that stores were dead. And DNVB founders keep talking about how a physical store actually helps their online business—as if this weren’t obvious.
- Better is still not the same as good for Macy’s, et al. Macy’s gets a lot of positive press about its various transformational initiatives. Kohl’s gets props for its Amazon partnership and their CEO will get the NRF “Visionary 2020” award. Yet they continue to lose market share and post anemic profits. So there’s that to consider.
- It’s do or die time for JC Penney. The good news is the company apparently is not facing any short-term liquidity issues and is working to restructure its debt. The bad news is its business remains a colossal mess and the problem is they think they have time.
- An Amazon and Walmart showdown. This prediction looks pretty solid as both sides are upping the ante on delivery times and duking it out on Prime Day. Unfortunately for Walmart—at least so far—Amazon may be getting the better of them. This will only get uglier.
- The emerging BOPIS crunch. The core of this prediction was that buy-online-pick-up in store (as well as ship from store) was going to continue to grow dramatically, but that many retailers would start to run into execution problems. As it turn out, stores aren’t always the best fulfillment centers.
- Stores as theater. Way too many people go on and on about “experiential” retail being the next big thing. Some even say the most important measure is “return on experience.” Please. One issue is we don’t have a consistent definition of what we mean when we talk about experience. It is clear however, that many retailers are continuing to turn up the drama and interaction, from Nike’s House of Innovation to Lululemon’s new Chicago store to Starbuck’s Roastery concept.
- Micro-markets start to shine. I would rate this one a solid incomplete. Yes, brands that are focused on niche segments continue to grow, but this definitely hasn’t really hit the radar screen yet.
- It’s the end of the mall as we know it, and I feel fine. Same story, different day. Plenty of malls are dead or dying. A lot are doing incredibly well. Stories are written about the malls that are closing or getting massively repurposed. Breathless stories are written about new malls like Hudson Yards and the American Dream, as well as the big expansion of Bal Harbour Shops. Shift happens. The future will not be evenly distributed.
- Wayfair crashes back to earth. Well so far I am very wrong. The stock is actually up nicely so far this year. Whether this is an example of the greater fool theory or confirms a suspicion that I don’t know what I am talking about remains to be seen. In the meantime, I’m doubling down.
- Voice shopping remains a yawn (for now). The growth in smart devices remains impressive. The penetration of voice shopping remains tiny. I am sticking by my prediction that there will be a big breakout year this technology. It just won’t be 2019.
- Better metrics start to emerge, albeit too slowly. Nearly a year ago Brent Franson and I wrote a piece that argued that “The Reinvention Of Retail Demands New Metrics.” Admittedly progress here remains slow, but studies like the ICSC’s “Halo effect” are helping more folks understand that channel-centric metrics are quite misleading. The customer is the channel.
Clearly some of these are more hopes that predictions. But with five months left in the year, there is still time for movement, good and bad, on the accuracy of these (mostly) educated guesses.
A version of this story appeared at Forbes, where I am a retail contributor. You can check out more of my posts here.
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