Top 5 Emerging Retail Industry Trends
Technology continues to disrupt and transform the retail landscape. What are the top trends that retailers must know to thrive in the industry?
The retail industry is going through an enormous amount of change. Customer behavior is changing, and their expectations are higher than ever. It is important for retailers to understand some key industry trends in order to ensure that their businesses are successful now, and for years to come. Here are 5 retail industry trends retailers are embracing in order to keep their companies thriving.
1. Invest in Omnichannel Retail Strategies
One of the most important retail industry trends is investment in omnichannel retail strategies. Research shows that the average digital consumer owns 3.64 connected devices and tends to consult these devices prior to making a purchase. Consumers may look at an item on their mobile and complete the purchase on their iPad, or they may search for an item on the web and pick it up in the store later. The ubiquity of connected devices means that consumers demand a seamless experience across multiple touchpoints.
Part of this seamless shopping experience starts with a mobile-first approach. Gartner estimates that by 2017, mobile commerce will equal approximately 50% of all digital commerce in the U.S. Therefore a focus on mobile is a strategic move for retailers, as it allows them to take advantage of one of the most used purchasing devices and supplement its usage with other systems, channels, and devices.
Some retailers are already tapping into mobile shopping in innovative ways. For example, Dixons Carphone – one of our customers – is Europe’s leading specialist electrical and telecommunications retailer. They wanted to create a unique shopping experience for their customers, one that is seamless and free of any friction. They used MuleSoft’s Anypoint Platform™ to develop honeyBee, a platform that sales associates can use on mobile tablets to provide an interactive customer journey. Through the application, customers can navigate through a consistent journey alongside sales associates––from exploring purchasing options to comparing services and products.
2. Provide a Personalized Retail Experience
Another retail industry trend that is becoming increasingly important to consumers is having a personalized shopping experience. Personalization in the retail world often involves retailers giving consumers suggestions based on their taste, location, order history, and previous searches. Retailers also create personalized experiences through simple services. This includes chat-bots that increase customer engagement and interaction, text messages that provide updates on orders, online- and tele-based communications, and other services.
Further, the rise of personalization as a retail industry trend has paved way for the application of more advanced and innovative technologies such as Artificial Intelligence (AI). For example 1-800-Flowers.com, an online flower delivery store, uses an AI-powered personal assistant that learns each customer’s preferences and predicts suitable gifts for every order. Retailers that want to provide consumers with unique personalized shopping experiences must invest in advanced technologies – AI or otherwise – and look beyond basic personalization tactics.
3. Attend to the Growing Culture of Immediacy
The rise of technology has led to a prevalent cultural and retail industry trend: impatient consumers. According to research on impatience commissioned by KANA Software, today’s generation of consumers want to receive a communication response in 10 minutes, compared to previous generations which expected a response in 10 days.
Today’s consumers want immediate results and retailers need to both speed up and expand their services in order to respond to the culture of immediacy. Some of these services include: presenting and updating inventory in real-time, restocking stock quickly, offering same-day delivery services, setting-up delivery-lockers, and providing scheduled deliveries. However, these services are challenging to incorporate, as retailers must have an efficient supply chain in order to support them.
One retailer that needed to address changing customer behavior and fast delivery services is Addison Lee, one of our partners. Addison Lee is Europe’s largest premium car services and operates in over 350 cities, transporting 10 million passengers annually. Addison recognized that their customers’ behavior was changing. Customers no longer wanted to order a taxi through phone calls or pay for their trips with cash. To address these changing customer demands, Addison Lee turned to MuleSoft’s Anypoint Platform™ to built its first public API in just six weeks. As a result, they were able to create new customer-centric mobile applications easily in order to enhance customer experiences. Retailers that want to survive in the industry must embark on a path to upend their customer engagements and ensure they are attending to the growing culture of immediacy.
4. Embrace the Digital Mobile Wallet
One emerging fintech and retail industry trend is the use of mobile as a payment method. A study commissioned by Bank of America surveyed 1,000 of its adult customers that own a smartphone. The study found that the overwhelming majority – 91% – viewed their smartphones as an “indispensable companion” in daily life.
Certain retailers have caught onto this retail industry trend and are already providing seamless mobile payments by adopting APIs. In fact, According to recent survey from Boston Retail Partners, the number of merchants that accept mobile payment is rising. Approximately 36% of U.S. retailers that were surveyed stated that they accept Apple Pay, and 22% said they plan to accept it within the next 12 months.
But the rise of the digital wallet demonstrates that there is growing consumer demand for flexible payment methods beyond Apple Pay. A growing number of the retailers surveyed also indicated they accept PayPal (34%), MasterCard PayPass (25%), and Android Pay (24%). In fact, only 11% of retailers revealed that they have no plans to implement mobile payments in their stores in the near future.
Therefore, to better thrive in the industry, retailers must ensure that they provide flexible payment methods such as mobile payments. A Forrester report found that 21% of adults in the U.S. already use mobile wallets or are interested in using it in the near future. Clearly, those that incorporate mobile payment services will be able to better thrive in the industry by fulfilling an unmet need.
5. Expand into Emerging Markets and Create New Channels
One common retail industry trend is the ability to tap into new markets and channels. Technology has made it easier for retailers to tap into international and emerging markets that would otherwise be difficult to reach. Retailers are no longer confined to a single location or market and many of them are able to expand their operations overseas by following an effective digital strategy. According to one estimate, it is expected that 3 to 5 billion more people will come online by 2020. By following a digital-first strategy, retailers can move beyond existing traditional borders and tap into new and emerging markets in order to increase their customer reach.
The Alibaba Group, for example, plans to expand its global reach to Australia, Dubai, Europe, and Japan. The Chinese eCommerce giant will likely largely benefit from this expansion. According to the Emerging Consumer Survey by Credit Suisse, total eCommerce sales for select emerging markets, such as India, Indonesia, Saudi Arabia, and Turkey, is expected to reach $3.5 trillion due to rising Internet access and higher incomes. These figures demonstrate that retailers have a vast, untapped opportunity ahead of them and they must establish a retail strategy that can both expand and scale easily.
Evidently the majority of these retail industry trends involve businesses taking control of their retail strategy––whether it is integrating systems and applications to implement omnichannel strategies or building an efficient supply chain to better serve customers and meet their demands. Technology is key to building and offering retail APIs to enable mobile payments and promote consumer personalization.
Explore some of our integration solutions for the retail industry and, for further insight, see how retailers can build better digital retail experiences to achieve some of these retail industry trends.