2019 retail trends report, by Microsoft, highlights all the emerging trends that will empower retailers to create exceptional, insightful shopping experiences for their customers.

As stated in the report’s introduction, over the last 15 years, retail has undergone a significant transformation. The internet has provided customers with access to seemingly endless options while mobile technologies have put information at their fingertips, anytime and anywhere.

While these changes continue to reshape the retail landscape, we are beginning the transition into the second phase of this transformation. The following will explore emerging trends in retail that will help empower retailers to create exceptional, insightful shopping experiences for their customers.

So, these are some of the major trends that grabbed our attention.


Customer experience is everything

Empowered customers expect amazing experiences

Innovation raises customer expectations

Stating that technology is changing customer demands feels like stating the obvious. Innovation has always been a driver of demand, unlocking new possibilities and raising expectations. Today, we find ourselves at the intersection of rapid innovation and a new generation of consumers who have grown up empowered by technology.

 Millennials evolve

The number and influence of Millennials continue to grow. They look very different from their predecessors: they are more diverse and better educated, they are smart and savvy. Seventy-three percent of Millennials stick to their budgets every month and they remain thrifty. This shift to thrift has also played a role in the growth of on-demand services, sharing marketplaces, and online consignment stores.

Gen Z gains influence

Where Millennials were digital pioneers, helping make technology mainstream, Gen Z is the first generation of digital nativists, never having experienced life before computers and pervasive internet. By 2020, Gen Z will be the third-largest generation in the U.S. and they are already accumulating significant purchasing power. Furthermore, over 70% of parents said their Gen Z children influenced their buying decisions on clothes and food. One thing is sure: Gen Z will have a significant impact on both business and the world.

 Personalisation as the rule

From e-commerce to mobile checkout, technology is infusing the retail experience. Greater connectivity to devices has created better-informed consumers who have the ability to not only research products and shop online, but also to compare competitors’ product prices and availability while in store. It is changing the way customers research products and make a purchase, and increasingly, it is changing the way customers interact and build relationships with brands. Brands that create personalised experiences by integrating advanced digital technologies and proprietary data for customers are seeing revenue increase by 6% to 10%.

 Retail becomes a service

Online sales continue to outpace industry growth by 300% making it essential that retailers seek out opportunities to generate excitement in brick-and-mortar locations. Online shopping has changed the traditional paths to purchase. In order to engage customers, retailers across all industries are building services and events into their business models. According to CEI Research, 86% of customers will pay more for a better customer experience.

 Retailers bridge the digital divide

Retailers have identified the need to create a frictionless omnichannel experience by providing real-time online and in-store inventory information, more fulfillment options, and cross-device compatibility. Customers now rely more heavily on digital interactions at every stage of the shopping process. Customers consult their smartphones, computers, and tablets for everything from finding inspiration, to browsing and researching, to purchasing a product. In order to capitalise on this usage, retailers must embrace digital platforms at every touchpoint.

Executive summary

Customers don’t just want seamless experiences across their devices; they expect personalised, experiential and mobile-first shopping interactions.


The everywhere store

Customer can purchase from anywhere

 A-commerce (anywhere) becomes the new reality

Technology has granted customers access to a dizzying array of products, and customers expect to be able to purchase on their terms, whenever and wherever they want. From social buying on Instagram to v-commerce with Alexa, businesses are no longer forcing customers to their websites to make a purchase; instead, they are turning every platform into a purchase platform.

 Social media selling grows

Social media continues to grow in popularity. While customers have consulted social media sites for purchase inspiration or research for years, we are only now seeing the potential of these channels to translate into direct sales. If social media platforms and retailers can generate better awareness – and remove barriers to purchasing with a smoother transition from browsing to buying – social media users will readily become in-app consumers.

 Voice-first conversational commerce makes some noise

It is predicted that by 2019, 20% of all smartphone interactions will take place via VPAs (Virtual personal assistants) – such as Microsoft’s Cortana, Apple’s Siri, Amazon’s Alexa, and Google Assistant. While the shopping capabilities of voice-enabled VPAs are still nascent, as they evolve, they will offer a powerful new platform through which businesses can reach customers directly.

 Enterprise chatbots are here to help

Brands began using chatbots – computer programs designed to simulate conversations with humans – as customer-care representatives as part of their omnichannel strategy, with the goal of reducing the number of queries handled by live agents. The opportunities to create personalised customer experiences expand as bot technology develops and becomes more advanced.

 Mobile payments go mainstream

Further pushing mobile payments into the mainstream is the broader adoption of mobile wallets as a whole. An increasing number of businesses, from stadiums to airlines, are leveraging mobile wallets for paperless ticket distribution. As adoption increases around the world, it seems clear that mobile wallets are the way of the future.

Executive summary

An overcrowded marketplace is pushing retailers to diversify their points of sale by using social media platforms, chatbots, and virtual personal assistants, connecting with customers wherever they are at any given moment.


Companies face new risks and challenges

Uncertainty puts strain on businesses

 Regulation changes create uncertainty

Over the last 18 months, a string of major regulatory changes has been initiated and enacted. From GDPR to tariffs, rollbacks in worker safety rules and emissions policies to net neutrality, brands across all industries are facing a great deal of regulatory uncertainty and flux. These regulations span across a wide range of disciplines and touch nearly every business.

 GDPR is here

On May 25, 2018, a European privacy law took effect and set a new global bar for privacy rights, security, and compliance. The General Data Protection Regulation is fundamentally about protecting and enabling the privacy rights of individuals. The GDPR establishes strict global privacy requirements governing how businesses manage and protect personal data while respecting individual choice – no matter where data is sent, processed, or stored

 Diversity and inclusion are at the forefront

Two new generations are poised to take over the workforce; they are both more diverse than previous generations, and they place a higher value on diversity, inclusion, and accessibility than their predecessors. These generations are, of course, Millennials and Gen Z. When compared with Baby Boomers and Gen X, more Millennials and Gen Zers cited diversity and inclusion of a prospective employer as an important factor in their job search.

 The rise of the socially conscious consumer

Over the last decade, there has been substantial buzz about Corporate Social Responsibility (CSR), yet for many companies, the financial costs of change initially outweighed the benefits. But as Millennials and Gen Z become more influential, both as employees and consumers, they are pushing businesses to behave more responsibly. While 86% of general consumers feel that companies should help address social issues, 94% of Gen Z believe that companies have a responsibility to do so. Brands will need to make their social, ethical, and environmental values easily accessible and showcase tangible results to gain this generation’s trust and spending power.

 Leaders try to navigate a highly politicised environment

While companies have historically taken a highly strategic and tactical approach to public relations, massive social media campaigns and boycotts have forced many companies to enter the political conversation whether they wanted to or not. In the past, it was rare for large companies to make openly political statements; however, with changing demographics, the rise of social media, and a rapidly shifting political environment, customers are vocal when they believe a business has misstepped and now expect brands to take a stand on issues. In a recent study by Sprout Social, 66% of consumers felt it was important for brands to take a public stand on social and political issues.

Executive summary

Business challenges are a moving target. With each new year comes a new list of risks and obstacles that business leaders will be forced to confront.

Source: Microsoft