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5 Challenges Facing Retail in 2020

The start of a new decade shines a spotlight on the hurdles and opportunities that lay ahead for the retail industry. In a new report, research company GlobalData identified the key challenges retailers must address to maintain success in 2020 and beyond.

Topics like e-commerce, saturation and direct-to-consumer business models are coming to a head. Over the next decade GlobalData group retail research director Maureen Hinton expects to see “the emergence of new major retail brands replacing involved legacy brands.”

In other words, if retailers don’t address these issues in the new decade, their brand risks obscurity. Here’s a closer look at GlobalData’s five key issues for retailers in 2020.


Sustainability is a positive challenge. As consumers become savvy to the severity of fashion’s environmental footprint, they will demand more responsible production. Businesses “cannot afford to ignore these trends,” GlobalData said. Retailers will be forced to be more creative with how they meet these needs, whether that means offering clothing rental services, recycling opportunities, adopting cleaner manufacturing processes or all of the above.

Key players in the denim industry are stepping up to this call for action, and many are looking to the Ellen MacArthur Foundation’s Jean Redesign program for direction. Companies like Guess, Blue of a Kind, Cone Denim and more are working to apply the foundation’s guidelines for durability, material health, recyclability and traceability.

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Multichannel retail

E-commerce is not a cure all for sluggish brick-and-mortar sales. In order to succeed in the next decade, retailers will have to strengthen both online and offline channels.

“These retailers need to find the optimum balance between the physical and digital elements to maintain a profitable business and sustain growth⁠—which is extremely difficult in a sector where growth is limited,” GlobalData said.

Recently, Nudie Jeans and Mud Jeans have each committed to new strategies that synchronize their online and offline businesses. Nudie teamed with e-commerce platform Centra in 2019 to drive sales through its online retail and wholesale sites, which now brings in 72 percent of its revenue. Meanwhile, Mud Jeans opened a shoppable showroom in The Netherlands, allowing customers to try-on and order their sustainable jeans.

Maintaining relevance

A deep design archive is not enough to secure relevancy in 2020. With more ways to discover and acquire fashion on the internet and social media, retailers must be constantly looking for windows of opportunity to connect with their consumers. “Fashion brands, such as Abercrombie & Fitch and Jack Wills, that have a brief spell in the sun, are doomed unless they can constantly adapt to new consumer trends,” GlobalData said, adding that “long-standing legacy brands must adapt or face an inevitable death.”

Heritage brands like Levi’s, Wrangler and Lee are maintaining their place in millennials’ closets by upgrading their iconic pieces with sustainable manufacturing, tweaking fits for the modern consumer and partnering with trend-oriented brands and retailers for unique collaborations.

New disruptors

In addition to e-commerce and social media both reshaping how consumers shop, the past decade saw newcomers like Everlane, The Reformation and Re/Done create a new conversations around price, transparency and sustainability. These disruptors are forcing the retail industry to stay agile.

“Technology is moving fast and creating unpredictable opportunities for new businesses,” GlobalData said. “If a retailer is not creating these opportunities it must be constantly aware of the changing retail landscape so it can defend and exploit competitive threats.”


In the 2020s, retailers will have to do more to stand out. The internet is a 24-hour mall, meaning consumers have access to a wide sweep of brands, products and price points. “The result is retail spending growth is contracting and being spread more thinly across a wider range of suppliers.”