The year 2018 was an interesting year for retail. We’ve seen some new trends emerge and nascent ones mushroom (which shouldn’t surprise anyone when one considers that 2018 was the year that millennials eclipsed baby boomers in terms of consumer power). Their tastes and preferences are upending brands and changing retail, and will do so for a long time to come.
Let’s take a look at some of the more notable events that occurred these past 12 months.
Online shatters all records
We’re quite accustomed to online retail reaching new heights, but 2018 was different. On Cyber Monday, U.S. consumers spent an astounding $7.9 billion online, the highest U.S. ecommerce sales day in history. According to MarketWatch, Cyber Monday was also Amazon’s biggest sale day ever, though truth be told, the entire weekend was kind to the retailer. From Black Friday to Cyber Monday, Amazon sold 18 million toys and 12 million fashion items. Sales outpaced Prime Day by factors.
Of course, those numbers pale in comparison to Singles Day 2018. Alibaba, the biggest promoter of the sale event, reports that in mere minutes of the clock striking midnight the site sold $1.4 billion worth of products. Twenty-four hours later, sales topped $30 billion.
In addition to the wow factor of these tallies, the high spending tells us something pretty interesting: despite talk of tariffs, trade wars, government shutdowns and uncertainty in the global economy, retail is strong and getting stronger. Consumer confidence remains high.
Rapid growth of impulse-purchase sites
Impulse purchases — Star Wars themed nail clippers or Justin Bieber toothbrushes — were once the purview on brick-and-mortar retailers, but that’s changing, thanks to sites like AliExpress, Wish.com and other “Dollar Stores” of the world wide web. Kitsch is on the ascent, with consumers bragging on social media about the unusual/funny/ridiculous products they’ve acquired. Those boasts are spreading the word that AliExpress and Wish.com exist; streamlined logistics and payment have lowered the barriers to online impulse purchases. What really blows my mind is that these impulse purchases are occurring outside of Amazon.
Business Insider says that Wish.com could break $2 billion in revenue this year, which isn’t huge, but it’s notable because it indicates a massive cultural awareness of such sites.
Rest in peace Toys R Us and Sears. Iconic brands continue to fall for many, often common, reasons. To begin, they’re typically late to embrace digital, rely too heavily on discounting, have massive retail footprints and over-leveraged square footage. But these are all systems of a larger problem: Americans just aren’t that drawn to big retails stores anymore. They find greater selection, more convenience and a better customer experience online than they can in real life. So why wait in line, search in vain for the products stores don’t have, and put up with harried customer service reps if they don’t need to? For more of my insights and impressions on Toys R’ Us demise, check out my podcast Future Commerce — Retail Tech at the Speed Commerce.
The year of explosive growth in digitally native brands
Admittedly you can say this about every year for the past five years, but once again, 2018 was different. Digitally focused vertical brands, such as forhims.com, forhers.com, dameproducts.com and thirdlove.com are a clear indication of the millennial’s values, which is probably why they have tremendous VC backing.
These brands have little interest in selling their wares in retail outlets, and frankly, an in-store experience isn’t particularly appropriate for a product line that includes Viagra and or scripts to stop hair loss. In addition to the strong digital focus, these sites, of which there are many, have a common visual aesthetic and visual language that indicate they’re marketing to the millennial demographic.
I believe that 2018 was the tipping point of, not just the digitally native brand, but the digitally native brand on Shopify. Unlike the Warby Parkers or the Allbirds of the world, which have branched out of digital to open boutiques or sell through Nordstroms, these brands will remain pure digital for the simple reason that their target markets have little interest in malls. (The death of malls has been a topic for the past 12 months, with experts claiming that 1 in 4 malls could be out of business, in large part due to the consumer preferring to shop online.)
So that’s my review of 2018, want to see what I think is coming in 2019? Check out my 2019 ecommerce trends prediction blog.
Written by: Phillip Jackson, Ecommerce Evangelist