To learn more, join us on Wed, Jan 29 at 11am PT for the RetailNext webinar discussion on “Five Hot Retail Trends of 2014” and next steps to deliver on each one.
Happy 2014! It’s that time again to spend a few moments to look ahead at the future of retail. Following is a snapshot. But to learn more, please join us on Wed, Jan 29 at 11am PT for the webinar, “Five Hot Retail Trends of 2014.”
I would call 2014 “The Transformation of Retail.”
In 2013, we said good-bye to Black Friday as we know it and welcomed social networks not only to better connect with our customers, but also to utilize gamification techniques to boost sales. We witnessed continued efforts of the Millennial shopping habit of show rooming, and this notion of the perpetual shopping clock. There are no such things as store hours anymore; retailers that can figure out how to keep a perpetual clock will delight their customers. And we can’t forget the notion of nomadic physical retailing: pop-up shops, vending machines, and other ways to sell products without the constraints of the traditional brick-and-mortar stores.
Drum roll please…here are the top 5 most fascinating trends for retail in 2014:
#1: Transformation of Retail
Retail going through a pivotal change this year. Omnichannel (I promise to mention the concept only once!) is starting to evolve in a significant way and 2014 is the action year for Omnichannel. There are three things that will lead to the transformation of retail—but they all hinge on retail’s new empowered customers who are guided by a never-ending clock. Technology today has advanced to the degree that retail has become unconstrained by store hours or physical shopping limits in regard to location. Customers can shop any time, day or night, from various locations, both in the physical and virtual worlds. The three concepts for action are:
- Synergistic Channels: Retailers who spend time evolving both the physical and on-line aspects of their brand will win in 2014. How can the multiple channels intertwine to give the customer that round-the-clock shopping experience they now expect? Buying on-line and picking up in store is a great example of a synergistic channel. This seamless integration across all channels is key to the customer experience.
- Empowered Customers: With the advancement of technology and instantaneous access to information, the customer has benefited in many ways. Winning retailers will be able to keep up with the information available to their customers. It will become ever important for retailers to use this information to carry the right product in the right location at the right price.
- Channel Pain Point Remediation: By understanding Synergistic Channel and Empowered Customer concepts, retailers can enhance these by understanding channel pain points. For example, understanding the limitations on the perpetual shopping clock from a customer perspective means that retailers need digital options for purchasing when the stores are closed. Similarly, understanding the customer pain point of the act of purchasing in any channel means providing a solution to ease that pain, as with a unified transaction engine or mobile wallet.
#2: In-Store Analytics
More retailers are figuring out that there are ways to measure shopping behavior in the physical store similar to the online world. Measuring components outside the four walls, like pass-by traffic and capture rate, are key to understanding the share of wallet. This, coupled with understanding the full path to purchase, can unleash hidden opportunities for retailers. The path-to-purchase measures include exposure and engagement rate of departments, areas, and fixtures.
Additionally, factual granular data show sales and conversion metrics for segments of the store, visual merchandising concepts, and marketing strategies. Foundational analytics like traffic and conversion can show sales improvements of 5-7%. Adding in-store analytics and staffing can lead to additional savings of 6-8%.
Although an obvious trend for many retailers, 2014 is a year to continue with ongoing efforts to merge the data collection points between the physical and online worlds. I will focus here on the in-store shopping environment, as I believe it’s the source of the largest information gap. Opt-in features and in-store analytics allow for retailers to complete a once-unseen picture of customer shopping behaviors. Understanding websites being browsed, length of store visits, and purchasing that occurs with other retailers while the customer is in your store can help you better meet the needs of the customer.
With mobile device detection, information can be collected in an anonymous way but still allow for the retailer to make marketing and product decisions, which can enrich the personal shopping experience. The opt-in applications can maximize the use of that information by providing a detailed understanding of a shopper’s decisions whether or not to purchase. This information can also connect shopping trips to specific customers (similar to online) and purchasing transactions.
Customers do not want to be tracked. However, what I’ve found about most customers and can convey to retailers is this: customers don’t want to be tracked by any retailers, but they do want to be understood by their favorite retailers. Customers understand that giving more information to the retailer about how they shop translates into better shopping experiences.
The amount of product many not be the real issue here—instead, it’s the lack of differentiation among products. There’s an ocean of sameness that plagues the industry, so the winners in 2014 are the retailers that can differentiate themselves through product, service, or technology. Having been involved with the industry for over two decades, I’ve found that one statement remains true: product is king. Making sure the product offering is one that stands out will help build the share of wallet and brand loyalty.
I just love this new trend of gamification; it’s so much fun! All of my students already understand this concept, so if you have not heard of it, hang around more young people. Keep in mind that this generation grew up with technology, a plethora of choices, and instant gratification. Well, they also love gamification. Retailers who figure out this model (especially those with Millennials as a target market) will quickly win over their customer base. Using gaming tactics in the retail world can engage customers more quickly, encourage more purchasing, help with product/service feedback, and allow the customer to become a key stakeholder in the product development process.
For a more in-depth look into these five trends, including the action points for each one (nice to know this information but what the heck should I do with it?), please join us for the webinar on Wed, Jan 29 at 11am PT on the “Five Hot Retail Trends of 2014.”