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Retail predictions for 2020
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The Salesforce 7: Retail Predictions for 2020

Read our fifth annual Salesforce Predicts series, where our global subject matter experts predict where retail and commerce are headed in 2020.

Welcome to our fifth annual Salesforce Predicts series, where our global subject matter experts predict where retail and commerce are headed in 2020.

Allow me to kick this predictions thing off. If you know anything about me, you know that I love talking about the concept of “shopping at the edge” — the idea that consumers no longer merely shop within the four walls of retailers’ owned physical and digital properties.

Consumers choose how to engage and are increasingly on apps, social media, messaging platforms, voice, gaming consoles, and more. They’re not only browsing, but also buying on digital intermediaries. In fact, our research shows that 9% of all digital transactions will take place on these emerging touchpoints in 2020. Winners will push their brand — including prices, promos, inventory, and more — to wherever consumers are hanging out. Take ASICS as an example. With the acquisition of Runkeeper, they are evolving from a footwear manufacturer to a lifestyle destination by pushing their brand where runners train for marathons or register for 5Ks.

I predict that winning brands will only continue to synchronize and syndicate their operations to the edge of shopping.

Here are six more from our best and brightest. Is hindsight 20/20 in 2020? Only time will tell, but I’m betting on yes.

1. Community and experience building will be even more important

James Johnson, Director, Retail Industry Strategy

Shopping has never been only about meeting utilitarian needs. Customers want excitement, recognition, social connection, and authenticity. Leading retailers will continue to develop communities and experiences around meeting these needs.

We know that differentiated products and experiences attract shoppers. Our recent Connected Shoppers Report identified that consumers, especially Gen Zers, seek out stores that offer unique experiences — not just products on shelves and checkout lines. Fifty-one percent of Gen Z shoppers have attended a pop-up store, while 42% have participated in an experience-driven social event or demo inside a store.

Retailers that can create an authentic sense of community will be able to differentiate themselves and ultimately build deeper relationships, and drive sales and loyalty.

Check out MECCALAND, a three-day event attended by around 15,000 beauty fans — the Disneyland of makeup. The cosmetics retailer MECCA transformed a warehouse space into an amazing group of experiences from perfect Instagram backdrops, hair styling, makeup tutorials, expert panels, and masterclasses, all delivered outside of the typical shiny-floored mall. And the IRL aspect allows their customers to be educated and interact with fellow fans while purchasing their favorite products.

Customers still expect a level of “retail hygiene” around value and convenience, but delivering experiences will continue to act as a differentiator.

2. Retail storytelling will become its own thing

Vinod Kumar, Product Management Director, Commerce Intelligence

As retail makes its transition to offering incredible experiences to consumers in addition to amazing products, the art of storytelling will be the anchor around which all experiences get built. After all, an experience without a cohesive story or narrative will only appear as a hodge-podge of disconnected pieces that can do more harm than good.

The challenge, though, is that experiences need to be fresh, relevant, and connected with the brand in a cohesive narrative — a story that connects all these together. We saw several examples of failed storytelling in 2019. The most heartbreaking, for me personally, was The Terminator franchise. For a movie that cost $185 million to make and saw James Cameron return to helm the franchise, its opening week earned a meager $29 million. It’s a wake-up call that old formulas, however iconic they may be, don’t work anymore. Brands that take the easy route by falling back on what worked in the past will lose relevance with the consumer of the present.

In 2020, brands will vie to tell the most refreshing, relevant, and resonant stories to grab consumer mindshare — and keep it. Brands that use a blend of creative, content, and commerce to do this well, will be the winners.

3. Inclusivity will rule

Kristyn Levine, VP, Customer Success, Digital Customer Experience

In 2020, more retailers will offer extended size ranges — not just online but in stores. Why? The plus-size fashion market value is worth more than $22 billion in the United States alone according to statista, and approximately 70% of American women wear a size 14 or greater. And these stats continue to rise.

Many brands and retailers have made the move to be more size-inclusive in recent years. Vineyard Vines, J.Crew, LOFT, Veronica Beard, and Anthropologie have joined established players like Torrid, Ashley Stewart, Lands’ End, and adidas.

I predict that we’ll continue to see more brands and retailers expand their selections online to be size-inclusive, and we’ll also see shops increase their range of available in-store sizes. Today, there is a significant lack of in-store presence and inventory that would tempt a shopper larger than a size 12 to enter a “regular sized” clothing store. Extending the available selection sizes will get this customer – and their retail dollars – into stores. It will also encourage brand loyalty and evangelism, which will positively impact and increase market share for those brands willing to expand.

4. Fewer stocked shelves = bigger and better results

Premal Mehta, Senior Product Manager, Commerce Experiences and Order Management, CSG

I predict that there will be more boutique-style stores that let customers try on and experience the products, then conveniently deliver them to their homes or offices.

By stocking less inventory and focusing instead on the customer experience and clienteling, (think: Bonobos and Nordstrom Local) retailers will be able to revolutionize the in-store experience by offering additional services such as personal stylists, tailoring, a coffee bar, and providing personal engagement with their customers. Customers will then be able to order items through the store via a mobile device, and choose to have it delivered either at home, or choose a date to pick it up from the store itself thereby combining convenience with a great shopping experience — the best of both worlds.

5. Survival in retail demands more innovation, imagination, and efficiency

Jamie Merrick, Director, Industry Strategy and Insights

As we know, not all is rosy in the retail garden so, as always with this industry, to adapt is to survive. We will see increasingly innovative partnerships between retailers and even more significantly, with businesses and brands outside of the industry. 

While this is not a new phenomenon, the urgency to act is building as growth from core operations stagnates. Businesses like Pets at Home in the UK have done a great job of generating incremental sales and diversifying its revenue streams through providing services for pets, like grooming and veterinary, in addition to selling physical products like dog leads and bowls.

Retailers are about to up the ante. Some great end-of-year examples include the rollout of "urban farming" in Marks & Spencer, which plays to the sustainability and convenience requirements of the modern shopper. Also, Rent the Runway’s service to provide the weary traveler with the option of turning up at a hotel, in this case the upmarket W brand, without a bag — and instead ordering clothes for pick-up at check-in.

Being able to generate awareness, footfall, and additional revenue from genuinely useful and convenient offerings are the prizes, but only the imaginative and operationally nimble will be able to take advantage. Even those who fall into this category won’t always get it right, but trying and failing fast will also be an important part of the process.

6. Shoppers will be seeing green

Neeracha Taychakhoonavudh, Senior Vice President, Industries

While consumer confidence and retail performance were strong this holiday season, that’s not the kind of green we’re talking about. We also aren’t talking about the new wave of state legislation giving rise to the other kind of green economy. The rising trend on consumer minds is sustainability. More people than ever value their role in preserving the environment. According to our global survey of 10,000 shoppers, 65% of shoppers say that they care more about sustainability than they did a year ago.

What does this mean for retail? The new year will usher in a new era of sustainable retailing. Think innovative and clever recycling like Madewell’s Denim Recycling program, where consumers donate a pair of used jeans (any brand will do) for a $20 credit. Or, thredUP’s charter to reduce the 26 billion pounds of clothing sent to landfills each year by providing a fashion resale marketplace. And, others are focusing on efforts to reduce packaging waste and decrease carbon footprints. Take L’Oreal as an example. This iconic health and beauty brand has committed a core mission of their brand to environmental sustainability.

Trailblazers are already leading the way for a more sustainable future. In 2020, shoppers will be paying attention to brands and retailers who get serious about the environment.

So there you have it — our predictions for retail in 2020. 

For more insights from our experts, subscribe to our blog. That way, you’ll always be the first to know about the most important stuff.

Rob Garf is vice president of Industry Strategy and Insights and the chair of the Client Advisory Board for Retail at Salesforce. With 25 years of global retail experience as a practitioner (Lids, Marshalls, Hit or Miss), an industry analyst (AMR Research), a strategy consultant (IBM), and a software leader (Salesforce), he is no stranger to the industry and the challenges retailers face. His team currently develops industry research and advises senior executives globally on unified engagement strategies. Rob is also a frequent industry speaker and a member of NRF’s Digital Council.

More by Rob

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