Ian Tomlinson, founder of RetailStore, believes there are plentiful opportunities for retailers willing to approach business differently this year – with technological advances, moves towards smaller-format stores and the delivery of more engaging in-store experiences, 2018 will see omnichannel become a necessity for long-term retail survival …
1. Payment trends
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 (IoT) 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 demand 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 2017-21.
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.
2. 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, and 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, 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 size, 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 bricks-and-mortar stores may have resented technological advances, these will play a significant role in their success. Cloud-based systems will fuel the rise of physical stores, providing the opportunity to launch and thrive quicker, and making opening a shop easier than ever, as retailers catch up with consumer demand and come up with ways to improve their experiences.
Data from the British Independent Retailers Association (bira) showed that across independent retailers, more shops were opened than were closed in the first quarter of 2017. 2018 Q1 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.
3. Fulfilling the omnichannel approach
Flawless execution – online and offline – of the brand will continue to dominate the latest retail trend in 2018. 2017 was the year in which 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 means that automation and a seamless experience are essential in order to survive. The entire customer experience through all channels needs to be a unified one, and must communicate the brand experience impeccably.
The 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 omnichannel strategy is no longer a novelty, but a necessity. Retail winners will invest in digital channels to match the experiences that would be identified with during in-store shopping. As a result, the gap between leaders and laggers will widen if organisations fail to master their omnichannel approach.
4. Retailtainment advances
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 cafes in shops, pop-up Kylie Jenner stores and trucks, Topshop DJs on a weekend and 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 the introduction of virtual reality aspects such as Nike’s store in Paris, which allows customers to test trainer colours using augmented reality (AR).
These in-store experiences and innovative concepts provide consumers with enough incentives to buy into the brand’s experience, and has the potential to garner a loyal following.
Adapting to the needs of the consumer is essential for survival in these changing retail times. To be successful takes a lot more than coming up with a unique experience – but that does go a long way to driving foot traffic into a store.
Business owners need to go beyond the consumer’s expectations in 2018 and ensure that their purchasing channels are seamless, reduce unnecessary costs by analysing the trends within their target market (if an audience is visiting smaller stores, then save on 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 their main consideration.
Technology expert Ian Tomlinson formed Cybertill 15 years ago, and the Knowsley-based company now has more than 500 clients nationwide. Retail Store offers a single cloud platform solution for retailers, helping them overcome the challenges presented by multichannel selling and deliver seamless customer experiences.