5 key consumer trends for 2019

Kate King is the Founder of The Transformation Catalysts, with over 20 years’ experience of leading change in the retail sector, here she explores the 5 key consumer trends for 2019 and what they mean for retail leaders.

2018 has been another difficult year for the high street, yet some retailers are delivering market-bucking returns. In fact, the latest McKinsey report - The State of Fashion 2019 - found that just 20 of the 500 companies they looked at were making 97% of the total profits, with Zara, Nike and LVMH being placed as the top 3. What are these businesses doing to generate these stellar results? Scale, brand investment and operational efficiency obviously play their part, but so too does a highly-tuned responsiveness to consumer interests.

Chatting to a partner at that bastion of the legal establishment Mishcon de Reya this week really evoked the retail zeitgeist for me. Lawyers aren’t known for being avant-garde, but this guy has given up going to physical stores completely and instead extols the virtues of the regular box sent to him by online gentlemen’s outfitter The Chapar. Sign up, give them your size and style preferences and one of their stylists pulls together a personal trunk from over 65 brands. Keep what you like and send the rest back. Why would anyone bother going shopping anymore?

This perfectly illustrates some of the key trends - around convenience, curation and personalisation - being driven by consumers in a landscape that is evolving at a rate of knots. Here is my summary of the top 5 evolving consumer trends retail leaders need to pay attention to in 2019.

People are increasingly done with meaningless consumption, instead favouring meaningful connection with brands which stand for something. Nike’s sales surged 31% in the days after unveiling their brave Colin Kaepernick advert –

Rimowa, the LVMH luggage brand being stewarded by Arnault Junior, perfectly captures the zeitgeist with its first-ever global campaign based around 5 diverse icons and the idea that ‘no-one builds a legacy by standing still’. Watching it, does one aspire more to a purpose or a suitcase – ‘purposeful ambitions demand resilient companions.’ Inspiring.

Rimowa Campaign

What does this mean for retail leaders?
Get clear on the ‘why’ of your business beyond profit, communicate this clearly and often, setting direction even if a final destination isn’t yet visible. Look for ways to bring everyone into the conversation, customers and employees alike, through engaging with issues that your customers care about. The recent missteps of Dolce and Gabbana in China and Victoria’s Secret in #MeToo times underline the perils of being tone deaf to an activist, Gen Z audience.

The idea of creating an engaging customer experience is nothing new in retail – Selfridges was living this 15 years ago with an awareness that the competition for consumers’ time and money was with other leisure activities rather than other retailers. Come see the guy suspended from the ceiling by meat hooks and buy a pair of socks as a souvenir.

This shift to experiences coincides with the shift away from buying ‘stuff’. Now that the traditional activity of ‘going shopping’ has been replaced by an always on, always looking interaction with brands through social media, retailers have to create a genuinely engaging customer experience as a means of differentiation beyond price.

And so 2018 has been the year of the Instagram activation. We can’t move for the hordes queuing outside Peggy Porschen’s cake shop to take a selfie in her gloriously elaborated doorway. But 2019 will likely see the desire grow for new products, experiences and services that add real value as well as looking good on Instagram. Retailers will have to think about what they are selling as the experience becomes the product.

What does this mean for retail leaders?
Creating a culture of customer experience is all about people – investing in them in a way that has them be able to engage the customer to bring alive a brand’s promise – in a one-on-one, personal way. This means getting analytical about customer journeys, breaking down every element of the customer interaction with the environment to create seamless, satisfying and special moments that are brand differentiators.

John Lewis have recognised this by rebranding to ‘& Partners’, underlining the importance of their team to their offer. ‘While others are investing in drones, we are investing in our partners’ says Paula Nickolds, John Lewis & Partners MD. The more customers interact with staff, the more they spend. Fact.

Millennials are increasingly expecting brands to offer them convenience and curation, with more and more creative takes on what this looks like.

The start-up Threads Styling embodies both in a service that allows users to shop what they see on social media – via chat. Their CEO Sophie Hill says, ‘our mission is ‘inspire, acquire, deliver’. So if you see something on Instagram, you would then swipe up through a Story, start chatting to one of our sales team and then all payments and invoicing would happen within that conversation.’ It’s a service that facilitates the purchase of luxury goods in a way that is more personalised than e-commerce and logistically easier than bricks-and-mortar.

What does this mean for retail leaders?
Retailers need to look at where buying decisions are now made – it may not be in store. Investment is needed in talking to customers at the right moment, in the right way – investing in social media skills and paying attention to creating the service experience through social interactions.

This may also involve a willingness and ability to try things out, through ‘fail fast’ test and learn activities that enable high-speed, low-risk experimentation.

Retailers are getting more attuned to knowing who their customers really are and personalising experiences to suit them. From using AI to create optimised wardrobes, to Nike’s state-of-the-art Data ID Stores that personalise and streamline the shopping process, data is a key driver for retailers in 2019.

What does this mean for retail leaders?
The increasing importance of creating personalised journeys that seamlessly connect the on-line and off-line experience mean that leaders have to be both digitally and data savvy. A truly digital business is a joined-up business requiring leaders who can unite across functional silos, seeing the whole from the customer’s point of view, rather than through the lens of a traditional departmental perspective.

‘We are holding brands to account more than ever before. A responsible business is not a ‘nice to have’ and how brands behave and act is crucial.’ Rebecca Robins, Interbrand

The entry of Gen Z consumers into the marketplace is driving an interest in acting in a way that does good in the world, or at least doesn’t harm it. Fashion is increasingly being recognised for the polluting, exploiting industry that it has been. Ownership is no longer an essential factor for younger consumers, and the backlash against the disposable nature of ‘fast fashion’ is seeing an explosion in resale websites like Vestiaire Collective and Depop.

Creating a brand that consumers trust, in a world where there is a massive questioning of all institutions, is critical for brand equity as well as enabling the kind of data sharing that allows for personalisation. Two pioneering examples of brands taking a stand are Patagonia, which has just given away the $10m dollars it gained in tax cuts under the Trump regime to conservation charities, and Stella McCartney, who is leading the way in the development of truly sustainable materials.

What does this mean for retail leaders?
Developing brand loyalty now means businesses being loyal to their customers and doing right by them and the world, not the other way around. Retail leaders need to be asking themselves, ‘What can we do to show our customers they can trust us?’ It starts with transparency, always doing what we say we are going to do and saying what we are doing. This practice needs to start with internal teams, who are also consumers and opinion formers, and make up the backbone of a brand’s reputation and integrity. Authenticity is the watchword for 2019 - if your people don’t trust you absolutely, how can your customers?

Being a successful retail leader in 2019 means being responsive to change, and equipping teams to flex to customers’ needs as the landscape continues to evolve. The days of leading from the front with all the answers are over. Now, what are the questions we need to answer together?

Kate King is the Founder of The Transformation Catalysts, a specialist consultancy partnering with luxury, fashion and retail leaders to create agile, purpose-driven organisations which are fit for the future. To continue the conversation or if you wish to use Kate’s services, please contact Samia Ahdal: [email protected] | +44(0)20 7734 9779