This is a year driven by speed, technology, and continuous change. Retailers will need to find a way to keep up, or disappear. We have spoken to experts and pros in the ever-changing retail industry, and here you go: our eight predictions for the future of retail.
1. Quicker, quicker!
Speed and convenience will be the two core qualities defining a top shopping experience. Customers increasingly value the ability to buy quickly and easily, and are getting less and less patient when it comes to waiting – for orders to be delivered, for new goods to show up in stores, for great deals. One-day delivery will become the industry norm. Quick-as-lightning offers, already a staple on Amazon, will become more frequent. The real winners of this trend will be companies that help customers save time and simplify their day-to-day shopping routine – think Uber, or Instapay.
2. Up close and personal
Personalization will be the key differentiator in the retailing of the future. As the Internet of Things becomes the new normal, more and more everyday objects are connected to the internet, able to identify themselves and communicate with other devices. One of the truly revolutionary aspects of the IOT is that products are suddenly able to communicate how they are being used, and provide retailers with insights into customer behavior and preferences – becoming a great source of intel for retailers. The winners this year will be retailers ready to up their game when it comes to personalization:
- companies offering highly tailored products and experiences: think customer-designed 3D printing; wearables; made-to-measure clothes.
- retailers that have integrated their channels, and can recognize the shopper across touchpoints and offer tailored services, merchandise and promotions, online and offline.
- companies that invest in predictive customer analysis, and use data from an intersection of multiple sources (included connected objects) to better understand and delight their customers.
3. Easy buy, easy pay
Frictionless payment is a key component in a seamless shopping experience. Easy and quick payment solutions will be a must. Contactless payment, which allows shoppers to pay by waving their card or mobile in front of a reader at the POS, has been growing exponentially in the past few years, and it will become mainstream in the near future. In 2016 we can also expect the explosion of new technology designed to make payments both quicker and more secure. Companies have been working with biometric information, so that in the near future, payments might be secured through iris scanning, facial recognition or fingerprint verification. The aim is always the same: using technology to make the shopping experience smoother, quicker and safer.
4. Social networks: share, buy, connect
“Buy” buttons have been invading social media in the past: from Twitter, to Pinterest, to Instagram and Facebook, all the big boys have adopted buttons that invite users to shop on the spot. Far from being a fad, the “social commerce” trend is expected to intensify in the future. An unsurprising development, considering that all players advantage from it: for the social platforms this is an exciting way to reach a larger scope of audience; for customers, these buttons make shopping easier, more convenient and more social.
5. Mobility, in and out of the store
Over 5 billion people globally are using smartphones every day. Customers are increasingly more mobile, and use their phones as shopping devices while on the go. Retail winners will invest both in m-commerce and in digital channels to aid shopping while in-store. In 2016, three out of four shoppers used their mobile while in-store, to look up information on products and availability; in the future the numbers are expected to increase. In-store mobility will also translate into mobile Points of Sale (mPOS). mPOS are reaching critical mass in the retail industry, and understandably so: they facilitate interaction with customers, speed up transactions, and help retail staff provide accurate product information on the spot thanks to the access to real-time inventory.
6. Small is beautiful
Small-format stores have been popping up everywhere in the past couple of years; the trend will continue to consolidate, experts predict. Many retailers, rather than trying to compete with online stores’ large catalog and endless aisles, are taking an inverse approach: survive by becoming small and nimble. This is not just a matter of downsizing: many of the big boys, from Target to Walmart to Sainsbury’s, are keeping their big box locations while adding smaller stores to their mix. These new locations are conceived as one-stop shops storing all sorts of goods; there may not be everything, but there is a bit of everything. This is both an attempt to bring needed flexibility to the organization, and to attract new crowds: the small size, in fact, enables these retailers to open downtown locations, where they are can target young, affluent city dwellers.
7. From omni-channel to omni-experience
Expect increasingly blurred lines between online and offline sales. Omni-channel is not a novelty anymore; all the way from browsing to choosing, buying and picking up, customers complete their purchases across a multitude of channels. It is no longer enough for retailers to have an “omni-channel strategy”: today’s global consumers are demanding a unified retail experience, allowing them to move smoothly across the channels with full visibility over inventory and pricing. In 2016, success for retailers will translate into the ability to bridge the offline and online experience with original and functional solutions. Whole Foods’ Store of the Future, which implements digital tools in-store to make shopping more interactive, is already yesterday’s news: only the truly innovative will succeed this year.
8. Getting in line with the millennial mentality
Millennials are the largest customer group at the moment, so forward-thinking retailers had better listen to what this generation has to say. We might see a decline in brand loyalty, as Millennials shift from big brands to local shops, boutiques and smaller brand name stores. At the same time, Millennials tend to be loyal to brands that stand for the right values: namely, authenticity, transparency, and social responsibility. Transparency will indeed be one of the buzzwords of the year: consumers want to know where their products come from, and they will reward brand that are genuine, down-to-earth, and honest in their communication. Success now and in the future will boil down to retailers’ ability to offers customers a personalized, seamless shopping experience. According to analyst firm Gartner, 89% of marketing leaders predict that customer experience will be the primary basis for competitive differentiation. Forward-thinking retailers will concentrate their efforts on creating a path to shop that responds to customers’ demands, integrating in-store technology, mobile, cloud, analytics and social media in a unified system to boost customer engagement. The industry is moving quickly; if you need help keeping pace, drop us a line. Our experts will be happy to help you with practical advice and technical solutions.
