Retail Trends 2014

Retail Trends 2014

Vend has written a fantastic article on what they see as the predominate retail trends for 2014. Although 2014 is half over, perhaps it’s a good idea to look at your own retail operations and see how you stack up compared to the industry.

1. Omnichannel retailing will be the norm

Retailers will continue to realize that they need to connect with users on multiple channels and touch points simultaneously or even interchangeably. In 2014, more retailers will give customers the ability to interact and complete transactions on their own terms. In other words, if a customer wants to view an item online, purchase it using their phone, and return it by dropping by the store, they can do so in a smooth and seamless way.

2. The mobile wallet will continue to rise

Cash and credit cards won’t be things of the past any time soon, but mobile will definitely get a huge chunk of the payments pie in the coming year. According to Forrester Research, mobile payments will amount to $90 billion in the coming years. And we anticipate that in 2014, retailers will be taking big strides towards that number by adopting solutions such as PayPal, Google Wallet, Square Wallet, Dwolla, and more.

3. Shoppers will get more personalized in-store experiences

One-size-fits all marketing just won’t cut it anymore, which is why retailers will start implementing solutions to personalize each customer’s experience.

While ecommerce sites have been doing it for years through tailored landing pages, offers, and recommendations, a lot of brick and mortar stores will also get in on the fun next year. Thanks to Bluetooth Low Energy (BLE), a technology that lets Bluetooth 4.0 devices such as PayPal Beacon, Estimote, and iBeacon communicate with smartphones, retailers will be able to send tailored notifications to each shopper’s device, depending on where they are in the store. Major League Baseball effectively demonstrated this technology when it tested Apple’s iBeacon at the Citi Field stadium in New York.

iPads used in retail stores4. Technology will be even more integrated in brick and mortar stores

2014 will be the year when stores say goodbye to boring, antiquated layouts. It has started to dawn on retailers that if they want to keep people in their stores, they need to make their locations interactive and engaging.

This can be done in a number of ways, the most basic of which is by using in-store mobile devices. Tablets and smartphones are versatile and can be used in several ways, including taking payments, demonstrating products, offering more information, and encouraging social sharing. Here are a few examples that demonstrate the successful use of in-store mobile devices. (Expect to see a lot more of these in 2014)

5. The number of mobile businesses will increase

Thanks to mobile POS systems and other cloud applications, people can now do business from anywhere. This has paved the way for on-the-go stores such as food trucks and pop-up stores.

In 2014, as mobile technology continues to advance, we expect mobile businesses to evolve with it. For instance, aside from food trucks, expect to see more fashion trucks, flower trucks, and even hair salon trucks.

Pop-up stores, usually reserved for apparel retailers, will diversify as well. Amazon for instance, recently set-up its own pop up store in a San Francisco mall, while Google has its own Chromebook pop-up stores in various airports.

6. Retailers will reinvent loyalty programs

A 2013 study by Maritz Loyalty Report found that “consumers on average are enrolled in 7.4 loyalty programs. However, each year 53 percent of these members stop participating in at least one loyalty program a year, citing irrelevant reward offerings (68 percent) and slow reward accumulation (50 percent) as top barriers.”.

That being said, we anticipate retailers to beef up their loyalty efforts in 2014. Loyalty cards are on their way out and will be replaced by customized rewards that incorporate social information, shopping behavior, and more.

7. Relationship marketing and thought leadership will rule retailers’ sales & marketing strategies

Say goodbye to pushy sales people who follow shoppers around. Retailers will learn that going for the “hard sell” isn’t effective anymore. Instead, they’ll invest in cultivating relationships and establishing thought leadership.

In 2014, we expect more brands to employ likeable experts—store associates who aren’t there to sell, but rather to dish out advice, solve problems, and build relationships. As Internet Retailer puts it, “the role of the associate will change from an information provider to a facilitator of engagement.” Instead of just giving product and pricing information, they will leverage each shopper’s data (i.e. previous purchases, shopping behavior etc.) to provide tailored advice and shopper-specific offers. We predict that retailers will invest more in training their staff for this role, and they’ll also invest in arming them with the right tools.

In addition, businesses will spend more resources in thought leadership and content marketing to educate and engage with consumers.

8. Customers’ need for speed will grow in 2014

The “always connected” consumers expect fast answers to questions or requests, and businesses will need to work extra hard to get in touch with shoppers as quickly as possible. And while businesses have already started doing it via live chat, SMS alerts, 24-7 hotlines, and social media, we’re anticipating brick-and-mortar retailers to roll out solutions that would enable associates to give instant, real-time information to shoppers.

For example, shoppers who walk into Burberry stores will see that associates are armed with iPads that they can use to provide real-time product information and availability. Not only that, but according to Retail Info Systems News, associates also have a ton of customer information at their fingertips, “including if the consumer opts in, their shopping behavior, what shops around the world they purchase from, what they have in their basket online,” and more, enabling them to provide personalized offers and recommendations instantly.

Speed can also apply to order fulfillment. As Retail Customer Experience put it, “By 2016, 50 percent of national retailers, will invest in distributed order management, enterprise inventory visibility, and workforce management to enable same day fulfillment.”

We believe that in 2014, retailers will find ways to streamline and speed up order fulfillment so they can get products into customers’ hands as quickly as possible. Just take a look at what Amazon is doing. The company recently generated a lot of buzz when it announced its plans for Prime Air, a drone-based delivery service that aims to complete deliveries in 30 minutes or less.

9. Retailers will continue to invest in Big Data to track shoppers

Studies have found that “Fifty-four percent of marketers already have invested in Big Data solutions, and nine out of 10 marketers plan to do so in 2014.”

Why the focus on Big Data? It’s because businesses have realized that in order to predict shopper behavior and provide truly personalized experiences, they would need to gather as much information about the behavior, history, and whereabouts of consumers. Big Data enables retailers to implement dynamic pricing, personalized recommendations, shopper-specific discounts, and more.

Word Cloud "Big Data"10. Big Data will lead to bigger privacy concerns for consumers

People will get uncomfortable when they realize just how much they’re being tracked, which is why we’re anticipating consumers to push back a bit, and try to find ways to stop businesses from “stalking” them. They may start using “Do Not Track” solutions such as the recently-launched AVG app that blocks WiFi location tracking. We expect more services such as this to emerge next year.

Retailers may be able to address privacy concerns by educating shoppers about the benefits of Big Data analytics. They need to communicate that they’re gathering data to improve shopper experience and not to steal information or breach privacy. In addition, businesses need to build trust by being transparent and empowering users to take control of their information.

11. Social media will heavily influence product decisions

We predict that social media will play a much bigger role in retail decision making. Currently, most retailers are using social sites to monitor feedback and connect with customers. In 2014 though, they’re going to take it a step further and use social media when developing products and marketing campaigns.

Nordstrom for example, has started using Pinterest to decide which products to display in their stores. According to Business Insider, “popular items on Pinterest will be displayed with a red tag identifying them as popular in the women’s shoe and handbag departments of Nordstrom’s 117 stores.”

Similarly, Target launched Awesome Shop, a site that showcases Target’s “best-reviewed” and “most-pinned” items.

12. Retail will grow in emerging markets

Brands are starting to see that they have huge opportunities in emerging markets such as Brazil, China and India, and we predict that they will strongly go after those opportunities in the coming year.

In fact, we can already see signs of this happening. Burberry for instance, has reportedly closed 14 stores and opened eight to reflect a focus on “’high potential markets’ including China, the Middle East, India, Brazil and Mexico”. Recent reports also state that “Tiffany & Co. will spend more on marketing in China than any other market next year as it strives to build the same kind of reputation for its brand there that it enjoys in the US.”