Numerous articles say we’re set for a “Retail Apocalypse” to progress throughout 2020, as e-commerce continues to penetrate consumer lives at scale. It makes for a startling headline of course, but the future of physical retail may not be as catastrophic as the phrase implies. Quite the opposite – in the face of almost 9,000 closed stores this year in the US and UK combined, newly emerging retailers born online are seeking to kickstart their physical footprint.
We’re seeing an evolution in the relationship between online and offline shopping, one where the movement between the digital and real worlds is seamless, and where the inherent advantages of a physical store are recognized.
Our research points to the more complicated motivations for why consumers are drawn to one shopping environment – and especially toward physical retail – over another. A bespoke survey we conducted among consumers in the US and UK showed 73% still prefer to shop for clothes in-store. The fact that this figure doesn’t fall below the 70% mark even for the digitally-native Gen Z (aged 16-22), illustrates that offline fashion has a truly cross-demographic appeal.
And it’s all about the emotional and tangible experience. Consumers want to try the products they buy, and this is the primary reason why they’ll keep coming back. For example, around 70% of fashion buyers shop for clothes in-store because they can try what they’re buying and 63% do so because they can touch and feel the products. This highlights that physical retail has a place among consumers – it’s not going anywhere, it’s simply changing. A focus on redefining physical spaces as hangouts is what we’re going to see more of in 2020, and technology, among other experiential features, will play a key role in the retail renaissance.
When the Penny Drops: Economic Outlook for 2020
You don’t need to work in an investment bank to notice the mounting pile of predictions and thinkpieces foreboding a global economic recession in the coming year. Warning signs from economic shocks of the past appear to be flashing, whether it’s in the analysis of the “inverted yield curve”, or a projection about the outcome of Brexit, or the US-China trade war.
For many, these warnings may be a cause for alarm. But for all the media noise surrounding them, they’re likely to remain fairly detached from the average consumer, who in many cases may have no clue what is meant by an “inverted yield curve”, or any other market signal out there.
Our data shows that consumer confidence among 16-64 year-olds in the global economy has been steadily growing since mid-2013, following a low-point of pessimism in 2011. This confidence is now at an all-time high since 2009.
Significantly, only when these matters impact personal hopes and fears in the future do consumers pay attention. Optimism in internet users’ own country’s economy remains low in key markets that have regularly appeared in global news stories of late, most notably in the UK and Hong Kong.
But concerns about the national economy aren’t always echoed in people’s perceptions of their own financial outlook. In fact, we found 59% of global internet users think their personal finances will improve in the next 6 months, and 50% believe the same of their own country’s economy.
Among certain industries, this positive outlook is also echoed by internet users who work in various professional sectors. For example, those working in the technology and communications sector are the most optimistic about the economic conditions affecting their companies in the next year. We can only wait and see what 2020 has in store for our own wallets and business revenue alike.
Data Is the New Jet Fuel: The Race to Own Your Vacation
Throughout 2019, companies all across the travel sector have been making big moves to create and own a new type of travel economy. In 2020, travel providers, along with a host of other contenders, will be focused on customer data and personalization in a bid to become known as the brand that owns the end-to-end experience of a vacation.
To understand this trend, we conducted bespoke research into the motivations of vacationers. We wanted to understand how travelers feel about convenient “one-stop-shops” where all elements of their holiday can be planned and booked through one provider. Is this the ideal travel solution, or do consumers prefer the freedom and variety of planning trips themselves by using multiple providers/resources?
Firstly, we found vacationers show a clear preference toward planning activities on their own terms. Interestingly, when it came to other aspects like booking activities in advance vs. waiting until the trip to book, or booking in one burst vs. over a period of time, it was essentially split down the middle. It’s only when we apply some demographic analysis that we see key differences emerge. Perhaps surprisingly, younger internet users are more receptive to having vacations pre-planned, while older users prefer to figure it out when they get there.
Consumer psychology aside, there is a more practical side to all this. There’s very little data that exists to measure the appetite for cross-selling experiences with other parts of a trip. So we set out to do exactly that, by considering aggregators, meta searchers, airlines, and publishers to figure out who the most effective cross-sellers may be. Receptiveness toward cross-selling is pretty good overall, with 58% of consumers willing to book accommodation from an airline, and the same number willing to book flights through an accommodation provider.
So on one hand, vacationers like variety and independence when planning their trips. But we also found they can be guided toward cross-selling and building out a travel experience under one company’s umbrella. This is evident not just with transport and accommodation, but with experiences, too. Importantly, when money is on the line, vacationers will often defer to the most cost-effective solution. So, for travel providers looking to own this space in 2020, empowering consumers to make their own choices, emphasizing cost-effective travel packages, and making the most of cross-selling will be key.