The Innovation Group releases Future 100: Trends and Change to Watch in 2016 report

^{The Innovation Group, the trends forecasting consultancy of J. Walter Thompson Intelligence, has  released its Future 100: Trends and Change to Watch in 2016 report, Exploring, for the second year running, what lies ahead over the next 12 months.}

^{Lucie Greene, worldwide director of the Innovation Group says “In 2015, we’ve seen that consumers are joining the dots in multiple areas of their lifestyles, taking a holistic approach to brands and consumption, and we expect this to strengthen in 2016.}

^{The report is split into ten catergories-Culture,Tech and Innovation, Travel and Hospitality, Brands and Marketing, Food and Drink, Beauty, Retail, Health, Lifestyle and Luxury.The key emerging retail themes are listed below.}

1. Celebrity retail havens

Lifestyle doyennes Jessica Alba, Reese Witherspoon and Gwyneth Paltrow are taking their empires offline with new physical stores and pop-ups, and bringing their personal brands along with them. In Nashville, Witherspoon has unveiled the first flagship for her Southern-inspired lifestyle brand Draper James, imagined as a traditional Southern home with design details such as front windows modeled after a front porch, and cupcakes and sweet tea on offer for guests. Not to be outdone, Jessica Alba, founder of natural personal care and beauty empire Honest Company (recently valued at $1.7 billion), has launched a pop-up for Honest Beauty, her beauty line, in the Grove mall in Los Angeles. Designed in “bohemian chic” style, it features interactive iPads, terrarium displays, rustic rope props, and Hollywood-lit mirrors. Both follow the example of Gwyneth Paltrow, who has launched a series of sleek Goop pop-ups.

Why it’s interesting: More celebrities are successfully converting their public personas into full lifestyle brands, using social media to convey a sense of intimacy to their audience and enhance the sense of personal recommendation for the goods they curate and retail. These physical stores take immersion to the next level.

2. Food temples

The latest retail buzz isn’t based around malls crammed with fashion boutiques, but around food. Anthony Bourdain is set to open a hotly anticipated mega food market on Pier 57 in New York in 2017. Dubbed the Bourdain Market, it will feature an epic selection of 100 food vendors from New York, and will also house a Singapore-style hawker market with street food stands and communal eating spaces.

Airport retail in New York will soon be revolutionized by a new foodie theme park at Newark Airport, with 55 dining venues that convert into new concepts depending on the time of day. In Portland, Oregon, architecture and design studio Snohetta has recently unveiled plans to build the state’s first year-round fixed market. The James Beard Public Market, named after the influential 20th-century Portland food writer, will be a hub for Portland’s foodie scene.

In the UK, London Union, a new joint venture from Henry Dimbleby, founder of healthy fast-food chain Leon, and Jonathan Downey, founder of Street Feast, plans to open as many as 20 local markets tailored to different neighborhoods throughout the city, with a permanent street food market planned for 2017. Rotterdam is also enjoying the harvests from a new food market. The colorfully lit Markthal Rotterdam by Dutch architects MVRDV houses over 100 food stalls and retail units under its giant arch.

Why it’s interesting: As we discovered in our recent Food and Drink trend report, eating is increasingly seen as a full-scale cultural experience akin to a concert or the theater—one to be shared with friends on Instagram and other social platforms. “Food is becoming more important in people’s lives and their sense of identity,” says Sam Bompas of food experience duo Bompas & Parr.

3. The world is a shopping interface

As the Internet of Things becomes a reality, everyday objects in our homes are becoming an interface for retail. Gartner estimates that by 2020 connected devices will drive $263 billion in spending on services. Amazon’s Dash Replenishment Service program already allows consumers to reorder goods such as laundry detergent without even needing to press a button; sensors in devices such as washing machines automatically re-order when supplies are low. The program has recently expanded into partnerships with brands such as General Electric, Samsung, CleverPet and Thync, which join Brother, Whirlpool and Brita on the project’s roster of collaborators.

The crude button is becoming passé elsewhere—new devices will be totally intuitive and connected to smartphones, to monitor anything from pet food to printer ink levels, and order when supplies at home or in the office run low. Target’s new Open House outlet, a celebration of the Internet of Things, invites visitors to experience a world of connected devices, from lightbulbs and sprinklers to baby monitors that automatically generate soothing sounds when the baby cries.

“The Internet of Things has huge potential for retailers like us—end-to-end retailers who offer electrical goods, supermarket goods, and services like the internet,” says John Vary, innovation manager at John Lewis in the UK. “There’s a huge opportunity to connect products with service.”

Why it’s interesting: Connected devices are already becoming a revenue driver for technology companies—Intel made more than half a billion dollars from connected devices in the first quarter of 2015. Retailers are realizing the opportunity in making devices cognitive, intuitive, and seamlessly linked to transactions based on consumer behavior, anticipating their needs.

4. Startup stores

Brands are dedicating space in their stores to new startups with worker hubs, in a bid to both connect to innovation and attract new visitors. Westfield this year launched Bespoke at Westfield San Francisco. The 37,000-square-foot 24/7 space for startup retail-tech companies features co-working space alongside a bevy of services including 14 conference rooms, ball courts for recreation, sleep nooks, and a bouldering wall. The curated community of users can run consumer-facing pop-up shops and testing in the mall, and also stage events in an AV-equipped 18,000-square-foot event space.

The Andaz Liverpool Street hotel in London has opened its doors to startups with a dedicated offer called SpacetoStartup (echoing nearby Ace Hotel, where the lobby is already packed with startups and freelancers). Andaz goes a step further, offering mentors and networking events, and SpacetoStartup will become a community for London’s entrepreneurs and investors, the brand says.

Why it’s interesting: Consumers of all ages are moving in to self-improvement and entrepreneurialism. In the UK, 4.5 million individuals are self-employed, according to the Institute for Public Policy Research. 2016 will be a record-breaking year for UK startups, according to the Centre for Entrepreneurs, which predicts that over 600,000 new businesses will launch—rising from 440,600 in 2011. The Prince’s Trust has dubbed millennials in UK the Start-Up Generation, and has found that one in four under-30s plans to be self-employed by 2017. In the US, people aged over 55 comprised 25.8% of new entrepreneurs in 2014, up from 14.8% in 1996, according to the Kauffman Foundation, which also found that self-employment is on the rise. Between February 2015 and June 2015, nearly a million US workers became self-employed, according to the US Department of Labor.

5. Reuse retail

Online retailers focusing on fashion resale have raked in investors’ cash in the past year, with one company alone, San Francisco’s ThredUp, closing an $81 million round of financing in September 2015. While Amazon struggles to break into the category and eBay offers an eclectic but uneven experience, new companies in the space promise curation and quality control, as well as a more editorial e-commerce feel. Search-and-listing websites such as eBay and Amazon, investment analyst Josh Goldman told Bloomberg, are “just not the right place to browse and purchase fashion.”

Why it’s interesting: PrivCo estimates that the secondhand clothing market is growing by 6% each year, a figure that could expand as more consumers discover online options.

6. Satellite retail

Retailers may soon be making important decisions based on images from outer space. “The plummeting price-performance curve in satellite technology means that entrepreneurs are launching cubesats into orbit to beam images back in very high resolution,” says Sophie Hackford, director of Wired Consulting in London. “The more satellites there are in orbit, the cheaper access to the network will be.”

The Orbital Insight startup combines photos of retailers’ parking lots with deep-learning image analysis to track traffic to stores in real time. Working in partnership with big data platform DigitalGlobe, the company converted data on 700 million cars collected over 48 hours into insights on national shopping behavior for its Wall Street clients.

Why it’s interesting: Unable to shield their business data from the eyes in the sky, retailers will have to adapt to a more transparent reality.

7. The human address

For years, online retailers have lamented the state of shipping. Jennifer Hyman, CEO of Rent the Runway, believes a disruptive approach is the answer. “The delivery network needs to be completely ripped up and re-created,” she said at this year’s South by Southwest Interactive. “We need to put UPS and FedEx out of business… The only way for e-commerce growth to be economically viable is if the delivery network changes.”

Startups are ditching aspects of shipping long taken for granted. Shyp announced “address-free shipping” in October 2015; customers have usernames synced to physical addresses and delivery preferences. Just as apps such as Venmo replace bank details with a simple username, people sending packages now only need to remember who they’re sending an item to. The address lists we now store digitally may soon seem as obsolete as the Rolodexes of decades past.

Why it’s interesting: Even un-sexy industries like logistics that have long seemed immune to change are now getting the slick Silicon Valley treatment, with huge implications for delivery, a particularly important pain point for e-commerce.

8. Next-level geo-targeting

Google is pulling ahead in the retail insights game to deliver fine-grained geo-targeting abilities to retailers. At the technology conference WSJDLive in October 2015, the company revealed a new service that expands access to its search data for retailers, allowing them to build geographic heat maps based on product searches across the US. The initial version of this Shopping Insights tool includes data about more than 5,000 products available through Google Shopping, targeted to 16,000 US cities and towns, updated monthly.

The Shopping Insights data reveals surprising geographical patterns—the example presented at the conference was that demand for Minion outfits was three times as high as demand for Star Wars costumes in Madison, Wisconsin, while the ratio was reversed in Berkeley, California.

Google also continues to develop its Local Inventory Ads program, which allows mobile advertising to be targeted to consumers based on whether a given product is in stock at nearby retail outlets, and even includes information on how far away a consumer is from a given store. “Retailers’ mistake number one is that they are simply not there at the consumer’s moment,” Jonathan Alferness, global vice president of product management and shopping at Google, said at World Retail Congress 2015 in Rome. “We see ourselves as a connector, we connect consumers with the retailer they need.”

Why it’s interesting: Google is finding new ways to build complex, nuanced data pools on consumer behavior and harness these insights for advertising. The increased desire of consumers for real-time, location-sensitive information also speaks to the growing importance of mobile in driving retail.

9. Virtual reality retail

2016 is the year Oculus Rift and Sony Corp’s Morpheus finally hit the stores. Retailers are already flirting with virtual reality (VR) experiences. Outdoor sportswear company The North Face has experimented with Google Cardboard. Luxury boutique The Apartment has used Samsung Gear VR to create a shopping experience and, in New York, Tommy Hilfiger’s Fifth Avenue store installed Samsung Gear VR headsets, immersing shoppers in a virtual journey to view and shop the label’s fall fashion show.

“Retailers won’t be the only ones retailing,” says Sophie Hackford of Wired Consultancy. “We will not be looking at our screens any more, rather through them, and the world will be tagged with opportunities to buy and click direct from the environment.” Hackford predicts it won’t be long before we get a “buy” button in 3D virtual reality environments.

“For me, this is the year virtual reality is going to explode,” says John Vary, innovation manager at UK department store chain John Lewis. “For a retailer like John Lewis it has massive potential. You can bring the catalogue and rooms to life. Putting people in the center of environments makes e-commerce more immersive, and will have a big impact on selling bigger items like furniture, as it will give them the confidence to purchase.”

Why it’s interesting: The number of active VR users is forecast to reach 171 million by 2018, according to a 2015 Statista survey. Retailers are seeking direct sales opportunities as well as enriching the consumer’s experience of the brand using virtual reality.

10. Community stores

More global brands are opening physical stores that aim not only to drive sales, but also to provide a social benefit to the surrounding community. Nike continues to expand its Community Store program, opening its first East Coast location in Brooklyn in May 2015 and a Los Angeles store in October 2015. The initiative’s mission is to “build and empower a healthy local community through the unifying power of sport and to serve as a catalyst for positive change.”

“Here, we have the opportunity to make an immediate, meaningful impact and amplify the values of the Nike brand through sport and community activity,” says LA-based Nike representative Blanca Gonzalez. “We’ve built great partnerships with the local Boys and Girls Club, the Eastmont Community Center, and nearby high schools, and are excited about the future we’ll build together.”

On a smaller scale, the H&M brand & Other Stories is also integrating a social mission into its storefronts. The brand opened its second US store on New York’s Fifth Avenue in October 2015, including a “free library” with books about plants and flowers, a core part of the brand’s identity. The books can be returned after reading, or another volume can be swapped in. & Other Stories also offers 10% discounts to customers who bring used beauty packaging or textiles back to the store for recycling.

Why it’s interesting: Although e-commerce has supplanted many functions of the traditional bricks-and-mortar store, physical retail spaces still offer a better opportunity to demonstrate a brand’s social mission in an authentic way that will resonate with consumers.

The full report is availabe online