For all the trends to watch out for in 2019, it’s fair to say it will be the economy that will have the greatest impact on trading.
Of primary concern is the continuing uncertainty surrounding Brexit. Of course, Brexit has been a worry for many shoppers since the referendum, and we’ve seen that reflected in our research. However, previously the concern had not percolated through into mass purchasing behaviour. With the Brexit deadline now approaching rapidly and no deal agreed by parliament, shoppers and businesses are showing signs of nervousness, delaying expenditure and tightening their purse strings where they can.
While Brexit presents major challenges for retailers and brands, it would be unwise to blame Brexit for all the problems. Even without Brexit, 2019 would be tricky to navigate.
Shoppers are becoming more mindful of how much they buy, with sustainability considerations meaning we might be reaching ‘peak stuff’ in terms of consumption.
Woes on the high street were well documented in 2018. Going into 2019 we expect a significant deterioration in the prospects. As well as weaker spending overall, the migration of retail expenditure online is bound to continue, placing further pressure on physical retailers. We have seen how businesses like Debenhams and House of Fraser are really struggling, while M&S is closing 100 of its stores. The result is that many high streets are losing their big anchor department stores, with some high streets facing the reality of losing more than one of these big retailers.
As the high street crisis intensifies, we expect central government intervention will increase. Issues such as taxation of online retailers and the fairness of rates on physical retailers warrant further discussion and require urgent action.
Despite the clear challenges, it’s important not to miss out on the opportunities too. Technological development in particular is opening new exciting channels to speak to and engage with shoppers, and increasingly savvy shoppers are more willing to try new things than ever before. The growing importance of experiences, not only in their own right but as part of buying and using products, also present exciting opportunities.
Without doubt 2019 will be a tough and unpredictable year but, like in 2018, retailers that understand their shoppers, innovate and are able to adapt will prosper.