Report: Technology & Spoiled Shoppers Will Drive Further Splintering in 2018 Consumer Spending
NEW YORK — Spoiled shoppers will want more, want it their way and want it now in 2018, according to think tank FGRT's new report, 18 Retail Trends for '18.
This will likely further splinter consumer spending and favor retailers who have strong identities, as well as nontraditional channels and nonretail categories, FGRT found.
"We see no letup in the splintering of consumer spending in 2018, as specialist retailers offering ever-more choice will continue to peel dollars away from midmarket behemoths," said FGRT Managing Director Deborah Weinswig.
She predicted that internet-only retailers will capture an additional $45 billion in sales in the United States this year. Those e-commerce sales, along with increased consumer spending on apparel rental, beauty subscriptions, meal kit services and apparel resale, will draw an additional $47 billion away from traditional U.S. retailers compared to 2017.
Additionally, as technology continues to remake the shopping experience, adopting technology earlier is one method traditional, large-store retailers can fight back against specialized upstarts, according to Weinswig. Artificial intelligence in particular will help retailers offer individual consumers tailored interactions, including shopping recommendations, along with personalized mobile-commerce portals and promotions.
"Such personalization can drive growth at specialized retailers by enabling them to create deeper connections with their customers. But it will be imperative for hard-hit generalist retailers, including US department stores, which can deploy AI to surface highly relevant products and services from what may be an unwieldy inventory," Weinswig said.
The report identified multiple consumer and retailer demands that will drive change in 2018. Consumers will demand to shop on their own terms using new and alternative formats and to be provided with life-improving services, new experiences and new rewards from retailers, brands and tech firms. Retailers will collaborate with companies ranging from services providers to technology giants and speed up their supply chains.
Another notable trend is consumers shopping for groceries at unstaffed, high-tech c-stores. This already occurs in certain cities in China, and the format is likely to expand further in the U.S. through vending concept Bodega and the launch of Amazon Go. Grocery brands such as Nestlé are also likely to experiment with direct-to-consumer sales. More partnerships between brick and mortar retailers and tools such as Amazon Echo and Google Home are also likely to rise.