“The last mile challenge has been a vexing issue in terms of the complexity of single item fulfilment, the cost, and also dealing with returns without sacrificing all of the retailer’s margin.”  

Trent Duvall and Matt Darby, KPMG 

2. Retail partnerships will continue to gain momentum 

“This is a core trend we are seeing globally and locally. Retailers are realising that in many instances, a partnership that focuses on the core strengths of each is more effective than building the capability in-house. 

“The retailer can focus on what it wants to be famous for, and bring in offers and services [from its partner] that will complement that and deliver on expectations.” 

Trent Duvall and Matt Darby, KPMG

3. More wholesale businesses will go direct-to-consumer 

“Traditionally, wholesale businesses have been disintermediated from the end consumer, relying on retailers to provide consumer data to ensure they can offer the right product and service to the right location at the right time. 

“With the introduction of digital capabilities and the rise of data-driven operations, the ability to reach end consumers and understand their needs has become easier. If you can access that data directly, why wouldn’t you?”

Trent Duvall and Matt Darby, KPMG

4. More brands will go green

“Brands have certainly started to take notice of the growing environmental and social consciousness of consumers. Results from the Australian Leadership Index show that consumers are increasingly expecting businesses to be leaders in creating positive environmental outcomes. Other statistics show a rise in conscious consumption across various categories.   

“In 2020, we will see this continue, while hopefully also seeing environmental and social consciousness becoming more core to business operations, beyond just lip service or marketing activities.” 

Dr Jason Pallant, assistant professor of marketing, Swinburne University

5. Experiential retail will bridge the gap between physical and digital 

“It is well documented that many retailers are over-indexed in terms of physical selling space with the rise of digital channels, but the importance of physical retailing hasn’t declined. It is complementary and, in many cases, fundamental to allow customers to directly engage with the brand, products and services, while the transaction may occur online.   

“Using that space for ‘retailment’ to enhance the brand proposition or value-adding services is one way of maximising value from the physical store.”

Trent Duvall and Matt Darby, KPMG

6. Small-format stores will get bigger

“With the rise of digital channels, the requirement for physical space for product is declining. Alongside that, in urban areas, the rise of convenience requires many brands to get closer to the customer in a physical sense. 

“Hence the reinvention of the smaller-store format to balance value with convenience and experience effectively.” 

Trent Duvall and Matt Darby, KPMG 

7. Department stores will struggle to gain a foothold

“The outlook for department stores remains challenging, and I imagine this will be the case over the next few years. We will see more consolidation in this sector. Clearly department stores are not the drawcard for shopping centres they once were.  

“Discount department stores are travelling better – it will be interesting to see how Target will reinvent itself and if there is actually space in the market for three major discounters.” 

Dr Louise Grimmer, senior lecturer of marketing, Tasmanian School of Business and Economics

8. Pop-ups will enable brands to try out new regions

“Pop-ups enable retailers to reduce the risk of introducing new products and test consumer appetite before committing more fully into things like leasing stores or taking on new brands. 

“I think this format will remain popular and we may even see dedicated pop-up ‘centres’ like Box Park in London.”

Dr Louise Grimmer, senior lecture of marketing, Tasmanian School of Business and Economics

9. Data collection will continue to be a sticking point for consumers

“As the amount of [consumer] data that retailers collect has increased, as well

as the capabilities for using that research, so to have consumer concerns about privacy.  

“Retailers need to understand that consumers differ on how they feel about retailers collecting and accessing their data, so it is important to be careful about how this data is used across consumer groups. 

“The challenge for retailers is differentiating across consumer groups and using their data in different ways, which we will hopefully see more of in 2020.” 

Dr Jason Pallant, assistant professor of marketing, Swinburne University

10. Online grocery deliver isn’t likely to grow, but click-and-collect will

“Given online grocery shopping has been available in Australia for at least a decade and the uptake is still fairly low at 3.8 per cent of total grocery retail in 2018, I’m not confident that this sector will grow in any meaningful way in 2020. 

“We will see increased market share for click-and-collect offerings, which has proven to be popular with many Australian households for grocery shopping, but it is also being embraced by consumers in other retail sectors, such as clothing, footwear, electronics, gadgets and hardware.”

Dr Louise Grimmer, senior lecturer

of marketing, Tasmanian School of Business and Economics

11. Video will continue to dominate marketing

“A major challenge all retailers are facing, and will continue to face in 2020, is the abundance of channels, media and messages consumers are engaging with.

“Streaming and video more broadly are a valuable way to engage with customers, but it should always be core to the brand image and core proposition. 

“2020 will likely see a continued increase in video and streaming engagement, but hopefully in ways that add to the brand image or customer experience, and not simply for superficial ‘engagement’.” 

Dr Jason Pallant, assistant professor of marketing, Swinburne University

12. Consumers will move from Facebook to Instagram

“Facebook is certainly falling out of favour with many Australians, while at the same time, Instagram is growing in popularity among different demographics and it is proving a very effective platform for retailers of all kinds, particularly those that sell products that lend themselves to compelling images. 

“The interesting thing to watch will be the role of influencers on platforms like Instagram. Consumers are becoming more aware of influencers as advertisers, and finding that balance between authenticity and sales promotion will be key for brands and retailers in 2020.”

Dr Louise Grimmer, senior lecturer of marketing, Tasmanian School of Business and Economics

13. We haven’t seen the end of worker underpayments…

“This is a complex situation and a concern for all businesses in Australia. The various agreements and rewards arrangements are numerous and complex, and they have evolved over the years to create a challenging matrix for the employer and the employee.

“Most retailers that I am aware of are actively reviewing their employee arrangements to check compliance with the awards. Unfortunately, I anticipate there will be more companies making back payments to employees [in 2020] – not just in retail, but in all industries that are governed by awards and have rostered employee arrangements.”

Trent Duvall and Matt Darby, KPMG

14 …Or the end of voluntary administrations.

“The forecast for the economy continues to be challenging into 2020 with consumers continuing to feel it in their pocket. Margins continue to be squeezed and businesses that are struggling should look at restructuring options to give them the time to focus and survive the disruption. 

“The majority of those that did go into administration, in my view, are those whose brand promise had lost resonance with the consumer, whether due to the emergence of new brands or the impact of online competition.”

 Trent Duvall and Matt Darby, KPMG