If you follow retail news at all — or have set foot in a regional shopping mall recently, for that matter — you know that the industry has more than its fair share of struggles. For this, you have to take a look at the most surprising retail trend.
Compared with other types of commercial real estate, large-format retail (especially traditional enclosed shopping malls) suffers from high vacancy rates and flatlining revenues. Several high-profile mall operators and owners have gone bankrupt recently, and others could follow if the U.S. economy tips into recession.
Maybe even if it doesn’t.
But retail isn’t all doom and gloom. 2024 is shaping up to be the industry’s most exciting year so far this decade. Several emerging retail trends hint at a sunnier future for merchants, operators, property owners, and — of course — shoppers.
Here’s what you need to know to get up to speed.
1. Pop-Up Retail Is Not Just A Fad
Long dismissed as an inconsequential fad, pop-up retail is becoming more difficult to ignore thanks to rapidly growing platforms like Nomad. You can say it is a prominent, surprising retail trend. Industry pros like xNomad’s Lorenzo Bonfiglio gravitate toward this space because it’s flexible, empowering, and comes with lower overhead costs than traditional retail. All to the good.
Shoppers seem to be getting the message as well.
2. Makers Are Reaching New Markets
The pop-up retail trend is driven in large part by independent artisans — makers — seeking creative ways to reach new markets at scale. It’s the same trend that drove earlier phases of digital retail growth but even more decentralized and democratic. For the first time in a long time, the balance of power could be shifting from larger retail corporations back to craftspeople who truly take pride in their work.
3. Surprising Retail Trend: Returns Are Getting (Even) Easier
Larger merchants are certainly playing a role in the retail renaissance. They’re investing in innovative processes and technologies that make the shopping experience simpler and more enjoyable, both online and IRL. For example, many are relaxing return policies, even moving to “no questions asked” returns, while streamlining the experience of sending back an unwanted item.
4. Retailers Can Do More And More With Less And Less
Automation: It’s real, it’s happening, and it’s changing the retail game right now.
From automated return kiosks to smarter self-checkout stations, customer-facing automation is nothing new. More and more, the real action is happening behind the scenes, with improved logistics and more productive internal systems. These innovations show up in slowly but surely improving customer satisfaction metrics. Hence, consider it as a surprising retail trend.
5. Loss Prevention Is Improving
Target CEO Brian Cornell surprised a lot of industry observers recently when he told investors that his company had a handle on organized theft. This is partly an automation success — in-store security is better than it was — and partly due to factors outside retailers’ control. The important thing is that a big, ongoing headwind for major retailers seems to be letting up.
6. Lower Inflation Could Give Shoppers A Boost
Surprisingly strong 2023 holiday season sales could signal a turning point for the retail industry as a whole, according to retail expert Melissa Repko. Thanks to falling inflation, which is tempering increases in both wholesale and end-user costs. As we turn the calendar into 2024, continued price normalization could outright reverse another powerful retail headwind, driving higher consumer spending and fatter retail profits.
Retail Is Having A Moment Right Now
The shopping industry is having a much-deserved moment in the sun right now after years of pain and doom.
Does that mean all its problems are solved? Not. But even the most pessimistic observers have to agree that the forecast for 2024 looks better than most expected, even a few short months ago.
Thanks to durable trends like falling inflation, lower in-store and point-of-sale friction, and ongoing sales automation, the years to come could be funnier still.
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