The new year is a great time to reflect on the changes that happened in the retail industry.

From the challenges that faced retail giant Ikea and American department stores, to the big winners of 2019 (say hello to Athleasure- the next hot trend),  it’s been an eventful year.

Let’s take a quick look at this week in retail tech, with a special glimpse at the trends that will be shaping the year to come.

5 retail lessons from Ikea’s wild year

For decades, Ikea held the status of the untouchable retail giant.

But this year was different.

Between 2017 and 2018, Ikea’s sales rose 5% globally, but in some countries, there was a sharp decline – including 40% profit drop in the UK, and just last month it announced it will be cutting 7,500 jobs.

Looking at Ikea’s story, here a few key takeaways:

1. smaller is smarter: across the retail industry, big-box brands are opening smaller stores in denser, more expensive city centers. Next year, Ikea plans to open 30 new stores in urban spots, with the intention of providing urban consumers direct access to products, including one in Tel Aviv.

2. Digital services are the future: the world’s largest furniture retailer is still struggling to master digital platforms, reflecting a wider struggle in the retail industry. Ikea will have to make some serious investments to stay in the game.

3. Human touch is still a must: at a time where every consumer desire can be satisfied with a click, handmade designs are the next big thing. Ikea’s recent collaboration with the glass and ceramics artist Per B Sundberg is an example of this growing trend, with the aim of giving the world’s go-to home furnishings store an extra human touch.


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 Image Source: Nikkei

Amazon is planning a Whole Foods expansion to benefit Prime Now

Amazon is planning to build and expand Whole Foods stores across the U.S. to put more customers within range of the e-commerce giant’s two-hour delivery service.

What led to this move?

1. Expanding grocer presence: Amazon aims to put more customers within the range of its two-hour Prime Now delivery service, including those in suburban areas outside cities and where the grocer has yet to establish a presence.

2. Competition with Walmart: due to its lack of a brick-and-mortar footprint, many of the U.S. consumers living in rural areas who don’t have access to Amazon’s new Prime service, do have access to Walmart stores. Amazon is trying to change that.

According to recent data, 140 million customers shop in Walmart weekly, and 90% of Americans today live within 10 miles of one of its locations.

This is a major challenge to Amazon in terms of offering fast delivery and pickup options, since Walmart also offers an online grocery shopping service.

3. Rising competitors: other companies are now competing with Amazon on same-day delivery, including Instacart and Target’s Shipt. Target’s new curbside pickup service Drive Up and expansion of Shipt’s reach in 2019, are another catalyst for Amazon’s move.


gettyimages 840695982 Image Source: techcrunch

Walmart isn’t the only retailer already winning in 2019

In any competition, there are winners, and there are losers.

In 1985, department stores sales accounted for 14.5 percent of all retail purchases in the US. Last year, that number fell to 4.3 percent and it is continuing to drop.

Some U.S. department stores chains are seriously struggling: Sears, Mattress Firm and David’s Bridal are just a few of the retailers who failed to adapt and filed for bankruptcy in 2018.

But retail isn’t going anywhere, it is only changing. And some players are winning big time in the new retail game.

So who are the winners of 2018?

1. Discounters: Discount retailers like T.J. Maxx and Ross are thriving as many shoppers still enjoy seeking out bargains even when they have more money to spend.
2. Big-box chains: Walmart and Target saw great growth in sales this year, as they continued to invest in their businesses to keep pace with Amazon.
3. Athleisure: clothes that can be worn to the gym and to run errands are gaining major popularity with trendy brands like Lululemon and Gap’s Athleta that opened more stores this year.


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 Image Source: CNN

Gap shuttering flagship 5th Avenue store in New York

The store, which is set to shutter Jan. 20, is on one of the busiest retail streets in Manhattan. Lately more stores have shut on 5th Ave- including the space that once housed the Ralph Lauren Polo flagship.

That move signals Gap’s growing focus on e-commerce- as flagship stores are expensive to operate, the company is clearly changing its focus: Last month Gap CEO Art Peck said the company’s flagship brand would be shuttering hundreds of its global Gap stores, noting that Gap gets 20% of sales online and 30% in its more profitable outlet stores.

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 Image Source: CNBC

Four keys to the future of retail in 2019

Mobile will lead the way

Think about the last time you ordered something online.

According to recent data, it’s most likely you were doing it from your mobile. Today, mobile is the leading way consumers plan, compare and purchase products.

In a survey last year, 71.6% of consumers said they shop from their smartphones at home. 60% said they shop with it while traveling or during their spare time. In 2019, retailers will have to strengthen their presence via mobile, as a great deal of online shopping traffic is expected to come from smartphones.

‘Hi there, I’m Ralph!’ 

Mobile messages will play a major role in retail this year, as retailers are plannng to expand their communication methods with consumers via mobile messaging, and Facebook messenger.

The latest example: Lego’s personable chatbot, Ralph, that helped consumers with their Christmas shopping on Facebook.

Voice tech on the rise 

While it isn’t the dominant source of retail sales today, voice technology will play a big part of all consumers’ buying journeys in the near future, combined with mobile, messaging and bots to create holistic engagement with brands.

More trends will definitely follow, but the ones above seem like the real game changers for 2019.

Lego Ralph Facebook Messenger Ch 1

 Image Source: mobile marketing magazine.

Final Thoughts

2018 was a tough year for some retailers.

Whether it be department stores or once unbeatable giants like Ika, some retailers are simply struggling to keep up with the change in the digital age.

Without a doubt, the brands who will dominate 2019 in retail will be the ones who create holistic experiences for their customers by connecting all the trends we just talked about.



Yael Kochman