Experts reveal their biggest predictions for how retail will change in 2020

2019 was a tumultuous year for the retail industry.


If 2019 was any indication , the retail industry is likely to have seismic shifts coming its way in 2020 and beyond.

The past year provided a reckoning for several traditional retailers who were forced to seek out innovative ways to appeal to the ever-changing whims of the modern consumer or else face the chopping block. Looking to the coming decade, experts say they will continue to identify strategies to stay relevant in the age of e-commerce, while also experimenting with fresh brick-and-mortar concepts and fully embracing sustainability.

Here's a closer look at what experts had to say about what's in store for the retail industry in 2020.

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While the notion of the "store of the future" was originally synonymous with features like smart mirrors and AI technology, retail analytics firm Edited wrote in a forecast report this week that these advancements are "still yet to integrate fully within the retail landscape at the dawn of 2020."

Instead, Edited said, the real store of the future will be popup and concept stores.

"The efficiency of online shopping forced brick-and-mortar businesses to be fresh and innovative to survive in today's challenging climate," wrote Edited analyst Kayla Marci. "The pop-up model then emerged as the store of the future, and it's not going anywhere in 2020."


Charudatta Ganpule head of the retail research desk at Tata Consultancy Services, a global IT consulting firm said one of the largest trends for 2020 will be a continued shift to experiential store formats, as traditional department stores like Macy's and Nordstrom test popup shops and trendy retail marketplaces like Neighborhood Goods crop up across the country.

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"Major retailers are transitioning from their original business model into non-traditional, typically smaller store formats that are varied to match the shifts in what, when, and where consumers want to shop," Ganpule said. "These non-traditional formats are temporary in nature, such as popup stores, mobile retail trucks, or flash websites existing for finite periods of time."

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According to its new owner Authentic Brands Group which bought the company after it filed for bankruptcy earlier this year it will include "eclectic curation of boutiques, art and cultural installations and exhibits, and entertainment."

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Ganpule, the head of the retail research desk Tata Consultancy Services, said to anticipate a continued merging of the physical and digital retail realms in the coming years. Specifically, he said to anticipate the growth of buy-online-pickup-in-store offerings, as well as online-only brands dabbing in brick-and-mortar.

"A hybrid form of commerce where shoppers can move seamlessly between physical and digital worlds of retail as they research products and make purchases is on the rise," he said. "This trend is driving traditional brick-and-mortar retailers like Walmart, Target, and Best Buy to enhance their online functionality and offerings, while also pushing e-commerce retailers from Bonobos to Amazon to open brick-and-mortar stores."

AP Photo/Matt York

2019 was a banner year for the resale market, with companies like The RealReal becoming the first resale brand to file for an initial public offering and ThredUp teaming with Macy's and JCPenney to sell secondhand goods in select stores. Moving into 2020, experts say the momentum around resale will continue, especially as consumer sentiment around sustainability grows stronger.

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Scott Cutler CEO of the popular sneaker resale marketplace StockX told Business Insider that he has continued to witness the merging of "primary and secondary markets" as consumer demand for secondhand luxury goods continues to skyrocket.

"That convergence is really exciting because the overall size of this market in the resale part of it has been growing so rapidly," Cutler said. "It's so sizeable that it now has significant influence on the market overall."

Courtesy of Adidas

According to Edited's 2020 forecast report, heading into the new year it is "expected that sustainable innovation is a top priority for retailers in 2020." Edited analyst Marci wrote that technology will play a vital role in developing more environmentally friendly forms of manufacturing and production, through tools that better track inventory to curb overproduction as well as identify more sustainable materials.

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Cutler said moving into the next decade, we can expect to see retailers continuing to make concerted efforts around sustainability, driven in large part by demand from eco-conscious millennial and gen Z consumers.

"They're looking at sustainable methods of consumption and they're very comfortable with marketplaces as a place to buy and a place to sell," Cutler said. "This new type of consumer has a different set of expectations and a different set of places where they're going."

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Moving into the next decade, physical and digital retail will be even more inextricably linked as shoppers continue to vary their purchasing journeys, according to Jonathan Cherki, CEO of digital platform company Contentsquare.

"Consumers research products on their smartphones, consult their wishlist on desktop, head to a store to try on or for good old-fashioned window-shopping then may go back to the website to activate an exclusive online discount," he said. "The intricacies of a buyer's journey are endless and it's crucial to have the right digital signals to provide customers with the information they need in context."

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SEE ALSO: The 2010s were a devastating decade for the retail industry. Here's how the retail apocalypse began.


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