Trends such as sustainability and speedy delivery show how quickly shoppers can change their buying habits. We ask the bosses of Britain’s biggest retailers what trends they believe will shake up 2020

Sustainability – from targets and plans to action and results

Inevitably, sustainability is still expected to drive groundbreaking change in retail.

Tesco chief executive Dave Lewis says: “I think 2020 will see a growing focus on the role of sustainable retail, whether that’s in terms of climate change, packaging or food waste.

“More and more customers will expect retailers to behave in an environmentally sustainable way.

“They will also look to businesses like ours for help to reduce their own impact on the environment, for example through removing and reducing packaging, promoting reuse or improving recyclability. This year, lots of companies have talked about targets and plans. 2020 will be time for action and results.”

2. dave lewis landscape

BRC chief executive Helen Dickinson agrees that climate change will be the overarching theme of the year: “Retailers have a responsibility to inform and inspire with achievable actions to put the industry, and the way we all consume, on a more environmentally sustainable path,” she says.

“More and more customers will expect retailers to behave in an environmentally sustainable way”

Dave Lewis, Tesco

“They will also look to businesses like ours for help to reduce their own impact on the environment, for example through removing and reducing packaging, promoting reuse or improving recyclability.”

The Co-op Food boss Jo Whitfield agrees: “Retailers are already looking at how they can become part of the circular economy, taking ownership of the packaging they produce and how it’s reused.”

Just this week, the Co-op pledged to use recyclable packaging for all of its own-brand products, which it said “will lead to the largest-ever UK-wide scheme to recycle plastic film”.

The grocer has banned black plastic packaging from all of its products and by the summer it will have phased out all non-recyclable plastics and replaced them with those that can be reused or easily recycled.

M&S director of product development April Preston says packaging and plastic remain high on its agenda in 2020: “An area we know is key for our customers is recyclability, so where it’s not possible to switch our packaging, we’re focused on making it widely recyclable or reusable. But we’re not stopping at product packaging, we know the same goes for single-use items like cards and wrapping paper.”

Card Factory boss Karen Hubbard adds: “While ever-increasing numbers are concerned about sustainability, it is much broader than just less plastic, they are also beginning to look for opportunities to reuse, repurpose and recycle. Retailers will need to constantly rethink the experience they are providing, the value of and the very essence of the products themselves going forward.”

Subscriptions – it’s not about selling stuff, but creating ecosystems

A burgeoning trend that Pets at Home chief executive Peter Pritchard expects to take off next year is retailers branching into services and launching subscriptions.

The unstoppable growth of Amazon Prime shows how powerful subscription services can be. Mintel research shows that 15 million UK shoppers have an Amazon Prime subscription, which offers benefits such as speedy delivery and video and music streaming.

Meanwhile, subscription services such as beauty specialist Birchbox and food recipe boxes such as Hello Fresh and Gousto are on the rise.

Tesco Clubcard 2017

Pritchard believes traditional retailers will attempt to capitalise from this trend.

“I think we are going to see retailers continue to broaden their services and solutions business in an attempt to capture a broader share of spend and drive more loyalty to their business,” he says.

Pritchard cites Clubcard Plus, the subscription service Tesco launched in November, as an example.

The grocer’s initiative was launched to create “lifetime value” for shoppers. Members of Clubcard Plus pay £7.99 per month and receive a plethora of benefits, including 10% off two big in-store shops worth up to £200 a month, as well of 10% off Tesco’s own-brand clothing and general merchandise, and double data on pay-monthly Tesco Mobile deals.

Pritchard says: “The war is not on selling stuff anymore but creating ecosystems and long-lasting relationships with loyal customers.”

Anthropologie international managing director Peter Ruis presents that subscriptions will not be the only disruptive business model to prevail in 2020. He also believes re-sale and rental will rise in popularity.

Rent the Runway is pioneering a rental service, while Stitch Fix is rolling out personalised clothing boxes, but traditional fashion retailers are following suit with disruptive business models of their own. Anthropologie owner Urban Outfitters rolled out a rental subscription called Nuuly in the US last year, with shoppers able to rent eight items a month for $88. H&M is also planning to launch its own rental service.

Making shops and websites exciting

Much has been made of the struggles on the high street with the convenience of online leading to some avoiding shopping trips.

In fact, retail footfall fell 3.4% year on year in November, with high streets the hardest hit – down 4.3% – according to data specialist Springboard.

Against this backdrop, Boots managing director Seb James believes retail will need to “transform for a new generation of digital-savvy and health-conscious shoppers”.

“We need to make our stores exciting places to visit, full of great advice and content that attract people to our high streets to spend their time with us. In short, retailers need to do what we have always done: make our shops and websites places of excitement, warmth and delight. If we do that, we will prevail,” says James.

Seb James 2019 2

Technology will play a role with AI-driven personalisation tipped to take off by the beauty boss.

“The use of AI to drive more personalised experiences for customers however they shop will be a growth area, as retailers get smarter at using data to give customers a truly personal service.”

“We need to make our stores exciting places to visit, full of great advice and content that attract people to our high streets to spend their time with us”

Sebastian James, Boots

 

Ruis believes “the physical store has a new purpose with aggressive rent reductions and capacity coming out of the market”, while Rita Clifton, branding expert and non-executive at online fashion retailer Asos, predicts a reinvention of retail spaces.

“We’ll see further development of real and virtual experiences, showrooms and collection points, hospitality and community living spaces – and by non-traditional ‘retail’ brands,” she says.

“More short-term, [we’ll see more] shared and dynamic uses of spaces, as well as intense online competition in ‘hyper’ fulfilment.”

Convenience – stores become a giant vending machine

Consumers’ desire for convenience is not a new trend, but Co-op Food boss Whitfield believes this will gather pace in the year ahead.

“The blurring of online and on the high street will speed up in 2020. The need from customers for non-stop access to products and in a convenient way will gather pace. Think of the high street store as a giant vending machine with customers shopping online and getting it delivered from their local branch,” she says.

jo whitfield

The Co-op is already leaning into this trend. It has teamed up with Deliveroo to pilot home deliveries of products such as snacks, beers, wines and spirits – a move mirrored by Sainsbury’s, which is also working with the delivery firm.

“Think of the high street store as a giant vending machine with customers shopping online and getting it delivered from their local branch”

Jo Whitfield, Co-op Food

Trouva is facilitating this trend in fashion and homewares, allowing customers to shop a network of more than 800 independent boutiques online.

Healthy living – from plant-based eating to alcohol-free booze

Consumers are choosing to adopt increasingly healthy lifestyles and this will spur many food and drinks trends in 2020.

Veganuary, where people opt to adopt a vegan diet for a month, is bigger than ever this year and, despite being just a few days into the new year, we’ve already seen a number of high-profile meat-free alternatives to well-known food products. Following on from the success of its vegan sausage roll, Greggs launched a vegan steak bake this week to great fanfare. Meanwhile, KFC’s vegan burger made its debut in restaurants nationwide.

Chicken kiev

Marks & Spencer director of product development April Preston tips plant-based eating to be a big trend beyond January.

“With one in four M&S customers choosing a more flexitarian diet, this is a super-exciting trend that’s showing absolutely no signs of slowing down. We’re expecting to see an even bigger leap forward in new products suitable for vegans, with a diversification in plant proteins and experimentation in flavours,” she says.

M&S successfully launched its Plant Kitchen range last year and Preston says it has “turned up the heat” by creating plant-based versions of well-loved products. It will launch more than 100 vegan-friendly dishes this month, including the no-chicken kiev.

Consumers’ desire to live healthier will expand beyond veganism. Preston also expects the low- and no-alcohol trend to “explode” in 2020.

“We have doubled our range of low and no products over the past year and M&S low-alcohol wines as a category is currently up 89% year on year in volume growth,” she says. “Whether it’s no-alcohol versions of your favourite bar cocktails or more sophisticated soft drinks using seasonal fruits and botanicals, there’s never been more choice for an alcohol-free night out.”

A renewed focus on Gen X? 

Millennials and Generation Z consumers have dominated retailers’ attention in the past few years as marketers have vied to understand these dramatically different generations of shoppers. However, Ruis believes that has left Gen X consumers, born between 1961 and 1981, feeling ignored by brands.

He says: “In the rush for Gen Z and Millennials, the Gen X consumer has been underserved, and continues to be the most immersed across our industry.”

This is a generation that has money to spend. In the USA, Gen X contributes 31% of total per capita income, despite making up only 25% of the population.

 “In the rush for Gen Z and Millennials, the Gen X consumer has been underserved, and continues to be the most immersed across our industry”

Peter Ruis, Anthropologie

Peter Ruis

As WGSN managing director Carla Buzasi points out in its Gen X – Meet the Power Punks report: “We may have had analogue childhoods, but as adults, we’re just as tech-literate as the digital natives born years later.

“We expect brands to keep evolving with us. From the language of ageing in the beauty industry (don’t patronise us), to how we buy fashion (at speed) and what we want to surround ourselves with at home, Gen Xers’ taste and habits are unlike any generation previously. And since we’re the ones with money to spend… brands ignore us at their peril.”