Wednesday, FEBRUARY 6, 2019
Volume 2, Issue No. 2

Analyst Predictions for the Year in Retail

Camilo Lyon, an analyst at Cannaccord Genuity, released his predictions for the 2019 year in retail. We dove in to present the highlights.

1. Will the fashion sneakers fade?

Athleisure has dominated the shoe scene for seasons, so it’s only natural that trendwatchers are asking: Is this the season that the lifestyle sneaker looks start to lose some of their shine? It’s possible, Lyon said — but the smarter money is that the looks evolve.

“The fashion world fully embraced the athletic aesthetic as evidenced by the ‘dad’ sneaker trend last  year,” he wrote. “As with most things fashion, trends evolve, change, shift to the next. For now, we have yet to see what the ‘next’ could be, thus fashion sneakers will likely evolve to encompass new styles, shapes, and embellishments resulting in another strong fashion sneaker year.”

2. Denim starts to challenge athleisure

After making small, but steady, gains, denim may be poised to take measurable share from the athleisure bottom movement in 2019. “We have written extensively about the resurgence of denim for the past couple of years, and we expect 2019 to be no different in that it becomes a more significant part of consumers’ wardrobe,” Lyon wrote. If so, will denim-friendly footwear styles see a boost?

3. AR takes over retail

Retailers have dabbled in augmented reality (AR), but Lyon thinks 2019 could be the year it truly proliferates. The main issue retailers will have to face is cost. “The challenge will be managing costs while at the same time driving higher rates of conversion,” he wrote.

4. Brand subscriptions proliferate

Whether it’s brands like Adidas and Under Armour, outdoor specialists like Cairn, or retailer efforts like Nordstrom’s Trunk Club and recently Lululemon, it seems like everyone has tried — or is trying — to get in on the subscription model. Lyon says we should expect more to come, despite the uneven successes the efforts have produced. “Subscription models, if successful, are the holy grail, largely due to the predictability of cash flows, low incremental expenses, and greater customer loyalty, which in turn translates into higher multiples paid to these models,” he wrote.

5. The apparel rental market takes share from fast fashion

At this point, the effect from H&M and its fast-fashion confederates has gone beyond disruption — it’s the new normal. But Lyon said he expects rental fashion companies — Rent the Runway, Gwennie Bee, Le Tote and more — to start challenging the model. The appeal to millennials: less waste and a greener process, less “stuff” to own, and the chance to wear brands they wouldn’t normally be able to afford.