2018 is here and the business outlook for retailers is looking positive despite what people may think. The New Year retail will be driven by technological advances and payment transaction capabilities, small-format shops will be in and ‘big-box’ shops are out, vast amounts of attention will be given to the omni-channel experience making it now a necessity to retailers over a novelty.
All of that and the retailtainment in-store experience will be at the forefront of CEOs minds for long-term survival – writes Ian Tomlinson, founder of RetailStore . Here’s our breakdown of how to build up in 2018:
Technology has opened the door to a new age of purchasing and has altered the payment path for transactions, turning it into the ‘Internet of Things’ era.
As online purchases soar and purchasing is made easier, payment methods have also been catching up thanks to the advancement in transaction capabilities that the internet and technology have created. Frictionless payment plays a key component in today’s shopping experience, amongst other things. We have seen contactless payment, including mobile payment such as Apple Pay, grow radically as the need for convenience and ease from consumers remains a dominating factor in retailing today.
Consumers are shifting towards wireless devices using voice interfaces to order and pay for items, such as the Amazon Echo. Euromonitor International estimate that nearly 81 million wireless speakers will have been sold worldwide in 2017, with a growth of 84% on top of that between 2017 to 2021. Companies have also been working with biometric information to further enhance the shopping experience using payment methods with more technological designs such as iris scanning, fingerprint verification and facial recognition as a quicker and more secure way to purchase.
Payment transactions will also be rated on how easy and quickly an item can be purchased, allowing consumers to purchase things online as a guest without the necessity to sign in or become a member. Additionally, “Buy” buttons have been popping up across social media platforms including Twitter, Pinterest, Instagram and Facebook. The influence social media has on consumers to follow and purchase the latest trends is expected to intensify, meaning that retailers need to consider further ways they can reach out and capture their audience by offering more convenient and quicker ways to purchase hot on-trend items.
Bricks and Mortar to Flourish
It’s been portrayed over the last couple of years that the end is near for bricks and mortar stores, however we disagree. Bricks and mortar stores have evolved over the past decade meaning that one-size no longer fits all. It’s down to the retailers to invest and create a brand experience that their targeted consumers will enjoy. Innovative stores will continue to emerge, we expect retailers to experiment more by offering exciting and creative concepts to the consumer. New store layouts will appear but will require a more flexible approach by retailers, such as strategically targeted locations, markets and formatted store designs to be successful.
Big-box stores are out and small-format stores are in. Competing with online is harder than ever before and as a result many small-format stores have materialised over the last few years, offering a more solid approach to opening a physical store for retailers. Consumers no longer want endless aisles and an overwhelming selection of products and items to get lost in. Downsizing to a small-format store not only offers survival but an opportunity to reduce overhead costs whilst adding some small-town charm, attracting new crowds in with the smaller more approachable sized store, and also giving retailers the ability to target demographics more effectively in areas without the huge outlay of cost that a larger store would entail.
Although brick and mortar stores may have resented technology advances, it will however play a significant role in their successful. Cloud based systems will fuel the rise of physical stores, providing the opportunity to launch and thrive quicker, and make opening a shop easier than experienced ever before.
As retailers catch up with the demands of consumers and come up with ways to improve their customer experience. Data from British Independent Retailers Association showed that across independent retailers more shops were opened than were closed in the first quarter of 2017. 2018 first quarter results will identify whether retailers who choose to modernise their physical store approach and follow their consumer habits, become more strategic in their plans, and downsize to move away from traditional styles will in fact find themselves thriving in today’s conditions.
Fulfilling the Omni-channel Approach
Flawless execution, online and offline, of the brand will continue to dominate the latest retail trend in 2018. 2017 was the year that retailers realised there was zero margin for error. It’s been an extremely unsympathetic year for slip ups and inaccuracies made by the retailer. The fast rate retail is moving at, the need for automation, and a seamless experience is essential in order to survive. The entire customer experience through all channels needs to be a unified one and communicate the brands experience impeccably.
2017 Global Customer Experience Benchmarking Report by dimension data revealed that many businesses were facing an ‘uncomfortable truth’ when it comes to the digital transformation of their customer experience. The report found that an overwhelming majority (89%) of organisations claim that the customer experience is critical to their survival and a top strategic priority, yet over half (51%) of respondents are failing to act.
Indeed, the blurred lines between online and offline sales means that having an ‘omni-channel strategy’ is no longer a novelty yet a necessity. Retail winners will invest in digital channels to match the experiences that would be identified with during in-store shopping. And as a result, the gap between leaders and lagers will widen if organisations fail to master their omni-channel approach.
A study found that 75% of companies said their top objective was to improve customer experience. Retailtainment is an element that has transformed the consumer shopping experience globally. We’ve seen retailer Urban Outfitters buy a pizza chain and several fine-dining restaurants, pop-up boutique cafés in shops, pop-up Kylie Jenner stores and trucks, Topshop DJ’s on a weekend, celebrity guest appearances during week nights, amongst a whole lot of other entertaining things.
Additionally, retailtainment is continuing to reinvent commerce and has changed consumers expectations when they enter a physical store. Parting with their money requires a whole lot of effort to be made by the retailer, but retailers have found that introducing lifestyle elements and creating a unique shopping experience is proving to have a positive effect in pulling consumers away from online purchases and back in-store.
More and more brands are incorporating daily aspects of life into an experience, with healthy lifestyle elements like yoga and health cafes currently trending amongst women’s sporting attire and introducing virtual reality aspects such as Nike’s store in Paris, which allows customers test trainer colours using augmented reality. These in-store experiences and innovative concepts provides consumers with enough incentives to buy into the brands experience and has the potential to gain a loyal brand following.
It does however often require a view into the future for the brand and to be a successor, potential long-term commitments need to be made by the CEO. Nevertheless, we predict retailtainment and the in-store experience to be at the forefront of CEO’s minds in 2018.
Adapting to the needs of the consumer is one of the best methods a retailer can do if they are going to survive these changing retail times. To be successful takes a lot more than coming up with a unique experience, although it does go a long way to driving foot traffic into a store. CEO’s and business owners need to go beyond the consumers expectations in 2018 and ensure that their purchasing channels are seamless, reduce unnecessary costs by analysing the trends within their target market (if your target market are visiting smaller stores then save on your overheads and reach a healthier bottom-line by downsizing), and finally make sure to use the latest technologies in providing consumer convenience through making the purchase transaction as easy as possible.
Putting the consumer first should be at the forefront for retailers in 2018.