Retailers have faced a number of challenges this year, from record-setting inclement weather in the winter to shaky consumer confidence over macro-economic conditions. In response, retailers are developing and deploying new strategies to capture leadership positions in the United State’s over $4.5 trillion retail marketplace, with six strong trends emerging.
The six most prominent trends in retail for 2014-15 are:
- Retrofitting the Marketing function
- Emphasizing “store theatrics”
- Amplifying shopper connectivity
- Integrating buy online, pick up in store
- Focusing on shopper interactions
- Optimizing store format
Retrofitting the Marketing function
Retail has learned Marketing can no longer operate in a silo and must collaborate across the entire organization, as well as at every level. The silos of yesteryear must come down to create a truly seamless integration across all shopper-facing channels.
Many organizations are facilitating a transition to a more collaborative effort by combining leadership roles with multiple functions, like empowering a single senior-level executive to oversee both Marketing and Information Technology, or moving leaders with digital marketing backgrounds into CEO positions.
Emphasizing “store theatrics”
In-store technologies are being deployed not just to facilitate shopping, but to also add elements of entertainment and engagement in the physical store environment. With store traffic down, retailers protect their share by creating environments that attract customers and keep them returning.
Interactive displays now show seasonal looks, with product features, marketing messaging, and coordinated items. Digital look books allow shoppers to “swipe” through products, and new digital fitting rooms allow for the virtual trying on clothes and recommended accessories, and shoppers can even instantly tweet pictures and take social polls – “what do you think of this outfit?”
Amplifying shopper connectivity
Shoppers are increasingly using mobile devices in stores, and it’s quickly becoming a requirement for brick-and-mortar environments to embrace Wi-Fi and enable Wi-Fi technologies that ease shoppers’ pain-points in acquiring a Wi-Fi signal. Most importantly, in-store Wi-Fi is a wonderful conduit for two-way communications with customers, delivering feedback on store experiences, products and marketing campaigns.
Shoppers empower customization and personalization when they opt-in for Wi-Fi accessibility, but retailers have to adequately address their most pressing question, “What’s in it for me?” Retailers should understand the most important factors for shoppers and offer them up as “rewards,” such as exclusive accessibility to products, advance previews, promotional discounts or earning loyalty points.
Integrating buy online, pick up in store
Buy online, pick up in store is a trend continuing to grow with retailers, and is a great strategy to encourage online customers to visit the brick-and-mortar environment. Many retailers experience significant increases in the average transaction values through residual sales when customers come to the store to pick up their purchase.
Buy online, pick up in store promises an additional touchpoint with the customer, presenting another opportunity to build and foster a strong relationship, with the aim of increased loyalty and retention. The challenge, of course, is to execute this strategy flawlessly and exceed customer expectations.
Focusing on shopper interactions
The focus on interactions pertains to the in-store shopping experience and “beyond the four walls.” The premise is based on a two-fold objective with the customer; (1) deepen the existing customer relationship and (2) add more touch points or opportunities to connect with the customer.
Within the physical store, enabling technology allows for retailers to understand the associate-to-customer interaction effect. This can be as simple as understanding an “initial greet” time, or understanding the length of time an associate spends with a customer. Measuring the impact with additional data points like conversion and average basket size is very powerful.
Beyond the four walls, customers want their voices heard by their retailers of choice. This omniscient, all-knowing consumer has a great deal of knowledge to impart on the retailer. By listening and building infrastructure to support these messages, retailers not only benefit from real-time feedback, but forge deeper relationships with their customers.
Optimizing store format
Brick-and-mortar stores’ traffic declines have retailers rethinking the store format and considering smaller footprints, pop-up shops, vending machines and brand boutiques within larger stores. Social interaction components to lure and keep shoppers in-store include food, coffee kiosks, mobile charging stations, seating areas, and more. Additionally, there are renewed efforts to provide easy, in-store connection and visibility to online inventories to widen assortments available to customers, and included in these efforts are seamless ship-to-home programs.
There’s always more to come
In addition to the six dominant trends shaping 2014-15, retail professionals also need to consider mobile payments, mobile POS, same-day shipping, delivering instant gratification in the online world, and developing omnichannel structures that work.
In the hyper-competitive world of retail, trends establish themselves and quickly become the norm or standard. The retailers who lead and follow fast are always a key step (or more) ahead of the competition in delivering a differentiated value proposition to consumers.
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