In early 2020, the retail industry was off to a very strong start. Through February USA retail sales grew 7.5%. Then March came in as a pandemic lion with a substantial part of the world hitting the pause button. We all very quickly learned the difference between essential and non-essential retailers. The financial pain for the global retail industry for all of 2020 will total over $1.6 trillion.
An April 2020 consumer survey found that consumers felt safest in grocery stores, followed by drug stores and big box retailers. Malls ranked lowest with only 33% of respondents saying they would feel safe shopping in these locations. Sixty-five percent of women did not feel safe trying clothes in dressing rooms, 78% felt unsafe testing beauty products, and 66% had similar concerns working with sales associates.
The Internet, mobile and social media have forever transformed the distribution of viral messaging. No longer the best kept secret, at the center of successful communication is the medium of video. If you still need convincing, here are a few statistics on the future of video.
Six out of ten people would rather watch online videos than television. Mobile video consumption rises by 100% every year. By 2022, online videos will make up more than 82% of all consumer internet traffic - 15 times higher than in 2017.
By platform, EVERY DAY five billion videos are viewed on YouTube, 10 billion on Snapchat, 8 billion on Facebook, and 1 billion on TikTok. Video campaigns on LinkedIn have 50% view rates.
Viewers retain 95% of a message when they watch it in a video, compared to 10% when reading it in text. Seventy-two percent of customers would rather learn about a product or service by way of video. Social media posts with video have 48% more views.
Video increases organic search traffic on a website by 157%. On average, people spend 2.6x more time on pages with video than without. Videos under two minutes long get the most engagement.
Having a passion for powerful visual communications, weekly through my personal website I share multiple new videos focused on retail, emerging technologies, and leadership. As we reach the end of this surreal pandemic year, here are my top 7 amazing innovation leadership videos of 2020.
In October, I had the pleasure of delivering my latest updated presentation "The Disruptive Future of Retail" on three continents. The new edition analyzes the state of nearly $30 trillion industry, answers whether ecommerce is eating the retail world, analyzes the recovery trends underway, provides a peak at the surprising early holiday season, explains the trends of what will be the new normal, and concludes with a summary of the technologies moving the retail industry forward.
COVID-19 has become a disruptive accelerator of digital transformation trends that were already underway. It's not only a question of being anointed as an essential retailer that determines success. Companies that were investing in creating harmonious retail channels with digitally enhanced immersive consumer experiences, coupled with strong branding will emerge stronger out of the current health crisis.
The world the virus leaves behind requires immediate focus on five transformational strategies and three foundational technology platforms. At the center of these critical initiatives is a much more intensive focus on creating passionate consumers that become active digital brand ambassadors for retailers.
With COVID-19 severely impacting retail across the globe, of great interest has been the continuing research and predictions of the 2020 holiday shopping season. For the world's two largest economies, China and the United States, the good news is that after very steep drops at the start of the pandemic, retail sales have already recovered to 2019 pre-pandemic levels.
In China, retail sales rose 3.3% in September, the strongest rise since December 2019. In USA, "total retail and food services sales amounted to $549.3 billion last month, up 1.9% from revised August sales and 5.4% from last year's September total."
Mid-October, Amazon kicked off an early holiday season with the successful Prime Day sale. Initial reports indicate that total sales during the two day shopping event hit $10.40 billion globally, up from $7.16 billion in 2019.
This article summarizes selected holiday predictions from my continuously updated "Disruptive Future of Retail" presentation. Variations of this content with greater focus on digital transformation were delivered on three continents this month.
How are retailers entering the holiday season? What is the latest consumer sentiment? Who will win the season based on the latest forecasts?
“We are laser-focused on continuous improvements to customers’ experience across our stores. By leveraging Everseen’s Visual AI and machine-learning technology, we’re not only able to remove friction for the customer, but we can also remove controllable costs from the business and redirect those resources to improving the customer experience even more.” - Mike Lamb, Kroger's VP of Asset Protection
This post was inspired by a recent Kroger article announcing the deployment of visual artificial intelligence (AI) in 2500 stores and new IHL Group edge computing research. Multiple technological trends have been converging for some time and their combination is leading to transformative store operations improving solutions.
By 2021, one billion video cameras will be deployed around the world. Endless possibilities in creating immersive consumer experiences emerge when artificial intelligence and machine learning are coupled with these visual data gathering devices.
COVID-19 has become a disruptive accelerator of digital transformation trends that were already underway. It takes 66 days or approximately two months to form a new permanent habit. New shopping journey habits have emerged during the pandemic that will require intensified analysis of millions of data inputs to both protect transactions and remove negative experience friction.
What are some of the leading Visual AI or computer vision applications today? In retail, what's the Return on Investment (ROI)? What makes these technologies critical to the future of retail?
The latest 2020 IHL Group forecast points to a COVID-19 negative $1.6 trillion global retail economic impact, with USA sales declining 7.6% this year. Fortunate sectors such as grocery and mass merchandisers will achieve double digit growth. Among the worst performers are departments stores (-23%) and specialty soft goods (-33%).
How do these challenged retail sectors, which are not expected to recover to 2019 levels until 2023, return to growth? One potential answer can be found in China, which on multiple levels remains the innovation laboratory for the future of retail.
"Virtually nonexistent three years ago, livestreaming now accounts for 4% of total online retail sales in China and about 1% of total retail sales. The number of products promoted on Taobao (Alibaba) via livestreaming nearly tripled in 2019—before the pandemic—and the number of Taobao livestreaming merchants almost doubled."
What is livestreaming e-commerce? What is making it successful in China?
The Wall Street Journal recently reported a sharp rise in deadly violence in major USA cities. Their analysis of crime statistics among the nation's 50 largest cities found that reported homicides increased 24% so far this year.
"Police, researchers, mayors and community leaders see a confluence of forces at work in the homicide spike. Institutions that keep city communities safe have been destabilized by lockdown and protests against police. Lockdowns and recession also mean tensions are running high and streets have been emptied of eyes and ears on their communities. Some attribute the rise to an increase in gang violence."
This article is a follow up to the very successful July 2020 Global Retail Crime Summit. The Wall Street Journal analysis and the just published D&D Daily retail crime reports are a reminder of the challenges we face. Similar to the urban increase in homicides, retail experienced spikes in violence in the first half of the year.
Summarized in this post are the latest USA retail violence, organized retail crime (ORC) and retail robbery trends. As I pointed out in my Crime Summit presentation and in a recent podcast, data driven industry collaboration, increased best practices communication, and new technologies are critical components to attacking multiple of the surreal challenges taking place in 2020.
Consumer spending accounts for roughly 70% of USA economic growth in the United States. In a short amount of time, COVID-19 has become a brutal disruptor of traditional buying patterns.
Research indicates that it takes 66 days or roughly two months for a behavior to become an automatic habit. That is roughly how long most countries were in various lockdown phases.
As we reopen stores, we are in unchartered shopping territory. This article summarizes the latest shopping data, key insights on the digital shifts underway, and recommendations for a stronger retail industry recovery.
"Retailers need to stop expecting business to return to “normal.” There’s no going back to how it was anytime soon. Even before the Covid-19 pandemic and economic crisis, brick-and-mortar retailers had been fighting a fierce battle against Amazon and other e-commerce players. Those challenges have now accelerated at staggering speed."
Throughout the COVID-19 lockdown phase, I have been following very closely the global economic and retail trends in anticipation of the reopening phases which are now underway in many parts of the world. Good signs from key markets such as USA which saw the biggest historical increase in retail sales in May.
The threat of multiple other waves of COVID-19 is still present, but key lessons have already emerged to guide countries during the reopening phase. Continuing to do well are most of the essential retailers, e.g. food and drug stores. Their growth spike will slow as more of the retail industry reopens. Best positioned are those essential retailers that had fully scaled services such as Buy-on-Line-Pick-Up-in-Store (BOPIS) prior to the pandemic lockdown.
Non-essential retailers, especially apparel and department stores have a longer road to recovery and some projections have them returning to 2019 level in the distant year 2023. To survive these sectors have already accelerated discounting, a recipe which will trains consumers to expect more and further delay profitability. As Neil Saunders pointed out in his June 12 Webinar, in May 2019 just over 21% of apparel items were discounted and the average discount was nearly 18%. For May 2020, nearly 70% of the items are discounted and the average discount rate is more than double at just over 44%.
The lockdown online shopping spike is subsiding with various forecasts having 2020 reach 20% to 21% of total USA retail sales. Prior to the pandemic, USA ecommerce was expected to reach anywhere from 15% to 19% of total retail sales as projected by multiple industry analysts.
COVID-19 has become a brutal accelerator of digital transformation trends that were already underway. Ecommerce has leaped two to three years ahead of previous growth patterns. There will be a substantial number of physical stores in the boring middle that failed to keep up with consumer engagement and innovation that will close.
"Brands will matter more in the world the virus leaves behind, and those that work now to build trust by acting, visibly and decisively, with an essential and authentic purpose, will be among the survivors. If they find new reserves of agility, creativity, and resolve, they can shape the way consumers view them in the midst of the crisis, and emerge not just with a viable business, but a sharp competitive edge." - BrandZ 2020 Report
Every year I look forward to the latest BrandZ Global Most Valuable Brands Report. Timely for 2020, BrandZ published a separate Global Top 75 Retail Brands edition that includes in-depth COVID-19 analysis on the impact of the pandemic to brands.
"The combined value of the BrandZ Top 75 Most Valuable Retail Brands has risen by 12% in the past year, to $1.514 trillion. These brands come from four sub-categories: Pure Retail, Fast Food, Apparel and Luxury, and they are growing despite – and in some cases as a result of – severe disruption in the market."
This article summarizes some of my favorite insights from the 131 pages 2020 retail report.