This article highlights some of the biggest retail trends impacting the industry today. Some of these trends have already emerged, with many of the biggest retailers beginning to respond and adapt their strategies accordingly. Case studies of these retailers are featured throughout.
1. Technology is changing the customer experience
Augmented and virtual reality, alongside predictive analytics, are changing the customer experience. The whole customer experience is going digital.
Augmented (AR) and virtual reality (VR) are seen by many as the next generation of disruption in the retail world, while predictive analytics is seen as one of the most powerful tools retailers will use going forward.
In the near future, customers will likely use AR and VR to explore and interact with potential purchases. Virtual reality, alongside its sister technology, augmented reality, offers retailers the opportunity to transform how they interact with the consumer.
Spending on augmented reality and virtual reality in Western Europe will likely reach US$2.5 billion in 2017, a 131 percent increase over 2016, according to the International Data Corporation’s Worldwide Semiannual Augmented and Virtual Reality Spending Guide released in March 2017. IDC expects that consumer markets will be the largest AR/VR spending segment this year, accounting for more than 56 percent of spend.
Adding analytics to the mix, retailers can use predictive analytics to forecast their customers’ next moves. This is also forcing retailers to reinvent the in-store experience. Pairing AR and VR with predictive analytics is a powerful combination for any retailer who is able to connect these dots.
Retailers of all types are adopting aspects of experiential retail’ to provide a more immersive and differentiated experience. Alibaba & Nintendo have recently used augmented reality for different business goals.
2. Mobile shopping continues to grow
It’s no surprise that online shopping has continued to grow rapidly over the last few years, however, mobile commerce has recently seen an incredible surge.
Smartphones play a vital role in the overall online shopping experience as shoppers can now use their mobile devices for all aspects of the path to purchase.
The average person checks their device 85 times a day, spending a total of five hours browsing the web and using apps. This equates to around a third of the time a person is awake, and is twice as often as many people even realize.
E-commerce has been steadily on the rise in recent years, but it may not be the next true frontier for shopping as m-commerce continues to become more popular. Mobile-first sites, dedicated apps, emerging payment methods and other tools are making shopping on smartphones much easier. Today m-commerce accounts for nearly one-third of online retail sales in the US.
An e-Marketer report shows that in 2016 global mobile sales made up 34 percent of all e-commerce transactions around the world, and it’s predicted to grow 31 percent in 2018.
Too few retailers have a solid mobile presence today; however, a report from the Internet Advertising Bureau shows that, 41 percent of retailers plan to have a transactional mobile site or application in place within the next year. Most importantly, retailers need to make all aspects of mobile transactions easy—from payment to delivery.
3. Creating a meaningful experience is crucial
Customers today are increasingly savvy and can use the power of transparency to help them choose between a variety of options. These options may have varying levels of customer service from poor to excellent. If a customer doesn’t have a positive experience with one retailer, they will likely simply switch to another. This is posing great threat to retailers as brand loyalty decreases and switching increases.
In order to drive loyalty as well as repeat customers, retailers are now focusing on the whole customer experience from the moment they consider a purchase through to the after-sales service. Retailers have started to understand the importance of curating the whole experience.
Furthermore, digital convergence has the potential to transform the customer experience – a glowing opportunity for retailers to set themselves apart. In the next few years, interaction with a variety of technologies such as bots is expected to reinvent the customer experience.
Retailers that are performing well have connected their physical and digital presence to deliver an enhanced customer experience. A seamless hand off between and among technologies, and in-store during single and multiple journeys is becoming a must as customers come to expect a ‘phygital’ experience.
4. Personalization is the future of retail
As more brands seek to connect with consumers on an emotional level, retailers are using personalization to engage with the consumer on a more intimate level. This provides a customer experience that strengthens the relationship between the brand and the individual consumer.
Personalization can bring more value to a customer as they receive a more targeted experience. Personalizing the shopping experience also drives repeat business. KPMG’s recent survey of 18,000+ consumers (The truth about online consumers, January 2017) found that customized promotions, exclusive member offers and customer recognition across channels were among the top ten drivers of customer loyalty.
This year the industry should continue to see retailers leveraging personalization in order to bring together all digital and physical channels. This will likely create a true omni-channel customer experience.
It is clear that personalization is the future of retail, and the latest technologies are enabling retailers to rise to the personalization challenge. Industries, not limited to retail, are all experiencing increased pressure to provide something that simply cannot be reproduced online.
5. Attracting & retaining talent is critical
As retail continues its rapid transformation, efforts to find and keep the right employees must change right along with it. It’s not just that the people are different; technology has ensured that the jobs are too.
As a result of this shift, employers need to put a greater emphasis on attraction and retention efforts in order to hire and keep top employees.
Equally, associates in store need to be upskilled and provided with substantial training and the right tools.
The first step in bringing in quality employees and holding on to the ones you already have is understanding the changing expectations of associates. Successful employers invest in ensuring there is no disconnect between what their employees actually want from their jobs, and what they believe they want.
The stronger the retailers’ talent pool, the stronger their performance in the retail market. This is why, retailers are investing in the candidate experience to attract the top talent.
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