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It’s fair to say that the last few years have thrown a curveball at many retail based small business owners.
Ultra brutal lockdown restrictions both decimated certain retail industry sectors, and created opportunities for others.
Clearly the high demand for products and services that could support and facilitate the functioning of businesses, and individuals’ radically adapted new lifestyles, were in high demand.
Sales levels in online shopping, education/e-learning and IT products all immediately exploded as they provided solutions for the services that were no longer accessible via the traditional channels.
One sector that performed particularly well was outdoor leisure. For example, in the US bicycle and cycling accessory sales rocketed to $7.0 billion in 2020. An increase of $6.1 from the previous year, climbing to $8 billion in 2021.
However, thankfully things have changed. And the global economy is fully open for business again. So now is a good time to assess industries and markets and try to ascertain what trends will/are emerging and what opportunities they can create for small business retailers.
1. In store shopping is back
Despite fearful claims that the scene of a bustling town/city centre is a thing of the past, present reality seems to completely dispel this. Consumers have flocked back to the shops in their droves and it seems us Brits are still fully in love with experiential shopping.
Retail stores saw sales figures defy inflation and rise by 0.7% in June. A much larger increase than the predicted forecast from many economists.
It appears that the physical experience of trying on clothes, examining products by hand and the ability to ask questions with real-life sales people, remains a valued and integral part of the purchasing process of retail goods for the British consumer.
Many big brands are rejuvenating high-streets across Britain by opening a series of new stores. And some of them are even choosing to move offline and reduce the size of their previous online models.
TK Maxx is planning to open 26 new stores in various sites including multiple high-traffic locations in London, as well as one in the former Debenhams store in Workington.
Food chains like Starbucks and Greggs are both opening 100+ new stores this year. So it shows they clearly believe that city centers are set to thrive once again. Others include M&S, Aldi and B&M, collectively creating thousands of new jobs.
And some fashion brands like Gymshark and some fast-fashion labels are opening new flag-ship stores in large city centers. Which indicates a demand for in-store buying of their products that were exclusively sold online.
2. Sustainable fashion and accessories
As ethics and sustainability become an ever more important part of retailers’ public image and PR, supply chains are coming under strict scrutiny from industry regulators and observers in the media.
And it’s also a key concern for consumers. A 2022 report found that 77% of shoppers for fashion consider sustainability when buying clothing.
The Bohoo retail group recently announced that it is reviewing its supply chain with the aim of using more local suppliers and reducing waste and its human/environmental burden. Surely the majority CEOs at other related companies will be seeking to implement similar changes.
There’s an opportunity for independent clothing producers in particular here. As fashion in the age of expressivism and original style consumers are looking for sustainable and unique designs. And garments that help them define their individuality.
Countless small brands have exploded in recent years. With accessible online selling platforms like Etsy and Shopify making it possible for arts and crafts style or boutique designers to easily reach customers. These are especially good options for accessory makers creating items like bespoke jewellery, beauty products and decorative homeware.
Furthermore, social media has provided a channel for phenomenal and affordable marketing and growth. With many small independent labels achieving astonishing levels of success.
Such as Lucy and Yak, a small company that makes sustainable dungarees, with over 229,000 followers on Instagram. On which they post content about their strong commitment to ethical production.
This industry-wide movement towards sustainability will require additional solutions in the form of supportive and complimentary services. Such as reusable packaging, ethical HR practices and reselling
If you need any more convincing that the trend of sustainable fashion is one of hottest in retail, see this article on the last New York fashion week.
3. E-commerce
Although we began this article lauding the return of high-street shopping. There’s still plentiful opportunities for small retail businesses to sell online via ecommerce platforms.
Despite the resurgence of in-store retail and forecasts of online retail growth being set to slow down, the business-to-consumer e-commerce market in the UK is still anticipated to be worth £2.4 billion this year.
Following on from the previous point regarding the popularity independent retailers, let’s look at some of the best niches:
1. Groceries
In the US online grocery shopping is expected to reach $250 billion. That’s a lot of Oreos…
As with any digitised convenience or app-based everyday service you can bet the same upsurging trend is coming to the UK soon.
2. Baby and Kids Products
An evergreen sector with products that will always be in high demand. Nowadays however, the sustainability aspect and desire for eco-friendly baby products is stronger than ever. There’s great opportunities for reselling second-hand items and producing toys, clothing and cosmetics made from safe, natural, green materials.
3. Dropshipping
You’ve probably heard of dropshipping on Amazon or eBay. And how excited budding entrepreneurs are about it. Well with predictions of 13% growth for Amazon and 16.4% increase in earnings for eBay in 2024, they are arguably both a Mecca of online retail. If you have half-decent marketing skills then dropshipping on Amazon could be a low-risk business model to start.
See this success story for inspiration.
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These three emerging trends within the retail sector are good news for small businesses. Savvy, retail focused sole traders who are looking to expand their revenue streams should research and exploit these potential opportunities. By staying aware of shifts in consumer interests and new buying habits, you can align your business in the direction of burgeoning retails markets and orientate yourself for future prosperity.
