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6 Ways Retailers Can Stay Relevant in 2018
It’s been a rough few years for retail, with many major retailers shuttering stores or declaring bankruptcy. It isn’t all bad news, though—the National Retail Federation projects that retail industry sales will grow between 3.8 and 4.4 percent over 2018, according to its annual economic forecast. It’s now up to retailers to take advantage of that potential growth by breaking free from traditional silos, evolving with disruptive retail trends, and exploring new and creative ways to attract customers and keep them satisfied.
However, this isn’t as easy as simply reading a top retail trends list and immediately implementing the strategies therein—after all, what works for a major department store retailer might not work as well for an online retailer, or for their respective customer bases. If you’re a retailer, you shouldn’t be discouraged from pursuing retail industry trends, but you should be mindful of how you apply them in order to achieve best results. Take a look at these top retail trends for 2018, complete with examples of how different retailers have put them into action, to develop a comprehensive and consistent strategy for your business.
1. Strike a balance between digital and physical
Technological innovation seems to be the biggest thing going these days, with AI, VR, and AR at the top of every retailer’s wish list, not to mention every retail industry trends list. But not so fast: According to IFTTT’s Holiday Retail Insights survey, shoppers aren’t quite ready to keep up with the breakneck pace of innovation, with 83 percent of respondents indicating that they wouldn’t be comfortable letting a robot shop for them and 68 percent saying they’d never used a chatbot. That said, the majority of respondents did indicate that they’re open to the idea of virtual shopping.
The key to avoiding tech-induced fatigue is to employ a strategic combination of the digital and the physical. The omnichannel approach isn’t exactly revolutionary, but it’s one that’s playing out in real-time to great effect. Ecommerce behemoth Amazon acquired Whole Foods in August 2017 in its first foray into the brick-and-mortar world and immediately set to work lowering prices and implementing practical technology, such as 5 percent cash back for Amazon Prime members who use their Amazon Prime Rewards Visa cards in-store. On the opposite end of the spectrum, brick-and-mortar discount giant Target made its own foray into the world of ecommerce integration with Cartwheel, an iOS and Android application that provided coupons to customers and used Bluetooth beacon technology to map in-store deals. Target phased out the standalone version of Cartwheel in 2017, rolling its features into the flagship Target app to boost its profile and provide customers with a more unified shopping experience.
The benefit to this retail trend is three-fold: It enables you to expand into new markets and increase growth potential, to create a seamless and convenient customer experience across channels, and to build more meaningful interpersonal relationships with their customer base. The key to executing an effective omnichannel strategy is to implement software that provides centralized operational management and cross-channel visibility so that you can gauge what level of technical integration will create the sort of universal experience customers are looking for and deliver the greatest ROI.
2. Embrace experimentation
Although more alarmist reports would have you believe that traditional retail has gone the way of the dinosaurs, that isn’t the case. Brick-and-mortar purchases still account for the majority of commerce, according to a recent U.S. Census Bureau report, largely due to factors such as the ability to see and feel the product prior to purchase and faster access to products. Forty-two percent of shoppers indicated that in-store displays and visuals were a major motivator behind their decision to continue shopping in brick-and-mortar stores, according to GfK’s 2017 FutureBuy study.
The resilience of brick-and-mortar stores has enabled retailers to experiment with their storefronts in creative ways and could just be the key to surviving the ongoing “retail apocalypse.” For example, Nike’s new flagship store, set to open in early 2019, will include exclusive opportunities for NikePlus members, such as access to limited-edition products and even a members-only floor with a basketball court so customers can test out products in a state-of-the-art facility. By dangling the carrot of a completely unique and exciting shopping experience, the sportswear retailer is actively incentivizing customers to enroll in its loyalty program and raising the bar for industry competitors.
Originally an ecommerce startup, eyewear retail Warby Parker recognized the value of an experimental format when it made the jump to brick-and-mortar stores and spearheaded the trend of showroom-style storefronts. Both customers and retailers alike benefit from showroom minimalism: Customers appreciate the attention to detail and emphasis on quality over quantity, while retailers enjoy fewer returns and the cost saving benefits of a smaller store footprint and less inventory.
You can expect to see the popularity of these and other experimental brick-and-mortar formats, such as pop-up shops and tech-enabled concepts, continue to gain ground as one of the biggest retail industry trends in 2018—and with the right data to back it up, experimental storefronts is a trend that can pay off in dividends. You can used advanced customer data analytics tools to track customer buying patterns and generate predictive models to determine which type of storefront would best suit your customers’ interests and needs.
3. Combine convenience and customization
The days when you could issue a generic ad to your entire customer base are long gone; retail customers are no longer interested in old school marketing tactics and instead expect a custom shopping experience that caters directly to them. This dynamic shift applies not only to marketing, but to products themselves: 77 percent of customers are more likely to choose, recommend or pay more for a brand that offers a personalized service or experience, according to Forrester. And personalized services aren’t the only way to lure customers: nine out of 10 survey participants indicated that shipping was the driving factor behind their decision to shop online, according to Walker Sands Future of Retail 2016 report.
So, why not combine these two elements? That’s exactly what popular subscription box services like Birchbox and Stitch Fix do, and traditional retailers have taken notice. The appeal of these subscription services is that they literally deliver convenience and customization in a box—customers can have exciting new products that are tailored to their specifications delivered straight to their doorsteps, all without having to fight crowds or sacrifice personalization. To keep up with competition from these services, beauty retailer Sephora and department store retailer JCPenney have thrown their hats into the ring with their own subscription boxes.
Sephora debuted “Play! by Sephora” in 2015, charging subscribers just $10 a month for a box full of custom samples. To give itself an edge over other beauty subscription box services, like Birchbox and Ipsy, Play! boxes also show extra attention to detail with curated Spotify playlists, “Play! Pass” coupons for in-store activations, and application tips. In December 2017, JCPenney partnered with Stitch Fix and Trunk Club competitor Bombfell to develop a service that caters to big and tall male customers. To get started with the “Big & Tall Box,” customers need only sign up and fill out a short questionnaire, after which they’ll receive a preview email featuring five items handpicked by JCPenney stylists. Once the customer has received his Big & Tall Box, he has seven days to try on items from his shipment, at which point he has the option to pay for what he keeps and return what he doesn’t.
Even if a subscription service doesn’t seem like the right next step for your business, you can still provide customers with convenience and customization. Develop a strategy that delivers a personalized customer experience that’s consistent across your brick-and-mortar, online, and mobile stores, as well as across customer service and marketing campaigns. Also, be sure to give your customers plenty of purchasing and pickup options—they’ll appreciate the added convenience of being able to choose whether to pick up items in store or other locations, or to have them delivered to their homes.
4. Engage customers with voice-first devices
Mobile has found its way onto top retail trends lists year after year, and for good reason: 62 percent of smartphone users have made an online purchase using their mobile computing device within the past 6 months, according to a study from OuterBox. However, a new segment of mobile-based ecommerce is on the rise. One in five U.S. customers used AI-powered voice-first devices to make a purchase within the past year, according to Walker Sands, with another third saying they intend to make voice-enabled purchases over the coming year.
With voice assistants such as Amazon Echo and Google Home rapidly becoming fixtures in homes around the world, now’s the time to get in on this growing retail trend. That said, it’s a trend that’s more niche in terms of who should invest. Retailers like Wal-Mart, CVS, and Amazon that sell daily use products are more likely to find voice-assisted purchasing useful versus purveyors of big ticket items like furniture or electronics. If you’d like to take the next step, look into tools and software to develop an application for voice-enabled technology for your business.
5. Foster a sense of community
As any retailer knows, social media is a free means of promoting your product to your customer base; in fact, 95 percent of consumers ages 18-34 follow brands on social media, according to MarketingSherpa’s Consumer Purchase Preference Survey. As customers grow more social media-savvy, strategists need to leverage social media in more innovative and remarkable ways to sustain interest. One popular method retailers are focusing on is to use features such as Snapchat and Instagram stories to craft more authentic, brand-centric narratives. Some retailers actively incorporate one of the retail industry trends mentioned earlier—personalization—into their social media strategy by tailoring their marketing based on factors like users’ Facebook likes or which Instagram profiles they follow.
One of the biggest social media opportunities and retail trends for 2018, though, is brand communities. Customers appreciate the opportunity to engage with fellow consumers with whom they share interests, and more and more retailers are developing their own platforms through which to do so. Sephora was one of the first to create such a community, starting with BeautyTalk in 2010; the latest iteration of Sephora’s brand community, the Beauty Insider Community, allows member to chat in a Reddit-style forum, submit photos, and rate and review different products they’ve tried.
PlayStation’s PlayStation Community works in much the same way in that it also provides a members-only forum for general conversation. PlayStation Community also enables members to read and write blog posts, share their progress in the games they’re playing, and share gaming pointers. The idea behind these customer-based communities/branded social media platforms is simple: Giving customers a place where they can share tips, opinions, interests, and so on replicates that “real life” feeling customers crave and makes the overall shopping experience a little less impersonal.
The more devices a customer can use to access a community, the better, so invest in a tool that provides app building functionality before you develop your own brand community. Also, for added personalization, be sure to leverage software solutions that provide insight into which segments of your audience to target and when, to amplify sales and promotional efforts.
6. Make data-driven decisions
If you aren’t using data-driven decision-making across all channels in your business, you’re going about retail all wrong. In fact, data-driven retail is perhaps the most important of all retail trends for 2018 because it plays a supporting role in all other trends listed above, or any other trend you might implement. Big data is crucial to pricing products competitively, offering a sufficiently diverse assortment of products, increasing employee productivity, and satisfying customer demands—but collecting that data is only half the battle. Once you have customer and industry data at your disposal, it’s imperative that you choose a software solution that quantifies that data in a centralized location and empowers you to make smart, data-driven decisions that boost sales, improve management efficiency, and delight customers.
Microsoft Dynamics 365 integrates cutting-edge CRM and ERP capabilities with cloud technology to provide a comprehensive, multi-channel management platform that grows along with your business. Interested in learning more about these retails industry trends and how to use Dynamics 365 to implement them in your business? Get in touch with Hitachi Solutions and get started today.
Would you like to learn more about how Hitachi Solutions is helping retail organizations adapt to the changing landscape of digital transformation? Check out our “Next Level Retail Analytics” Webinar series!
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