6 Retail Trends to Watch in 2018

clothing in retail space

Today’s connected consumers (particularly Gen Z) expect instant gratification, new experiences, and personalization in retail. As a result, they’re driving a massive shakeup in the traditional retail landscape. Savvy businesses are now quickly pioneering changes, forcing others to adapt or be left behind.

Below are 2018’s top retail trends, and some of the most innovative companies that are helping to usher them in.

Reimagined brick-and-mortar businesses

Brands are redefining what it means to have a physical location. Instead of simply opening a retail store in the mold of their other flagships, they’re exploring new real estate strategies and investing in brick-and-mortar businesses that focus on unique experiential moments.

Nordstrom, for example, just opened the first prototype of a new store concept called Nordstrom Local in Los Angeles. It carries no merchandise. Instead, the store offers styling, tailoring, manicures, returns for online purchases, and a beverage bar. In a similar vein, Sephora recently launched Sephora Studio, a new small-format neighborhood concept that features custom makeover services, facials, sampling opportunities, and same-day pickup of online orders.

These types of next-generation real estate strategies give customers a reason to visit storefronts beyond just the products, and help forge a more emotional connection with brands.

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Visual search technology uses machine learning to find and recommend products online based on matching attributes like shape, color, pattern, or even texture. Rather than a word-based search query, a shopper just has to snap a photo of the desired product to generate relevant search results.

The result is a faster discovery of relevant products the customer is expressly interested in. Imagine, for example, searching for a little black dress with a specific hemline. If the keywords aren’t within the product description or metadata (or a customer doesn’t know how to describe the hemline), it’s likely going to be a nightmare to find. But visual search can use a photo to quickly narrow down products, removing tons of friction from the intent to buy to the final sale.

Visual search is particularly suited for retailers with large inventories or search results. Target, ASOS, and Neiman Marcus have already invested in creating visual search technologies, and Pinterest Lens allows you to capture an image and find related pins.

Customer-controlled delivery and returns

Today’s consumers want instant gratification. They’re looking for products that are available exactly how, when, and where they want them. Smart brands are adapting by putting control in the customers’ hands.

Target, for example, plans to grow its college campus focused TargetExpress concept to over 130 stores by 2019. These nimble smaller-format stores will all feature buy- online-pick-up-in-store (BOPIS) services.

Office Depot now offers same-day delivery for online orders (in addition to its in-store pickup program). And PetSmart lets its online customers choose their own delivery window — anywhere from a few hours to a few days. The ability to control delivery and fulfillment will soon become a perk consumers expect.

Augmented reality

Augmented reality has been on trend lists for a while, but brands are finding new, innovative ways to infuse the technology into the shopping experience across all channels.

Online furniture retailer Wayfair recently launched a new augmented reality mobile app that lets customers see products in 3D. Users can look at how a couch or lamp would look within their space, and then make purchases straight from the app.

Lowes has integrated augmented reality into its mobile app as well, but as a way to help customers quickly find products in its massive brick-and-mortar business through turn-by-turn directions.

Saks Fifth Avenue is rolling out a new augmented reality concept called the Salon Project, which allows clients to “try on” different hairstyles and cosmetics with the help of augmented reality programs installed in mirrors and on iPads. In the new year, expect to see more augmented reality experiences like these to satisfy and delight the connected shopper.

Deeply personalized and predictive experiences

Salesforce’s 2017 State of Marketing report found that 50 percent of consumers are likely to switch brands if a company doesn’t anticipate their needs. Innovative companies are starting to use predictive modeling, machine learning, and artificial intelligence to predict customer behavior and generate right-on-target messaging and product recommendations.

Luxury online retailer YOOX NET-A-PORTER, for example, is using artificial intelligence and machine learning to hyper-personalize a customer’s mobile shopping experience. The tool selects clothing items based on a shopper’s future plans — whether it’s a wedding, a vacation, a party, or starting a new job. It even goes so far as to consider the weather when making selections.

Curated subscription services

Customers now expect tailored experiences — which explains why personalized subscription boxes like Stitch Fix are so popular. Now, traditional retailers are even jumping in on the trend, providing a new avenue for product discovery and gaining invaluable insights on consumer appetite for certain products in the process.

Gap recently launched babyGap OutfitBox, a new subscription service for baby clothes, making styling little ones easy for busy parents. Hasbro’s new direct-to-consumer subscription service Hasbro Party Crate will send customers a selection of three hot-off-the-presses board games every three months. And Fender is launching a new subscription-based digital lesson service, Fender Play, where students interact with short video lessons that respond in real time to their progress.

With increasingly connected customers and Gen Z driving seismic shifts in shopping behavior, 2018 should be a very interesting year in retail.

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