Retail is one of the most exciting sectors with continual change and disruption. Whether it’s e-commerce, m-commerce, drone delivery or virtual payments the sector is transforming at a dramatic pace. Below are some of the big trends which will continue to impact in the latter half of 2014 and beyond.
1. Personalised pricing – the days of the price match are coming to an end. The retailers’ ability to price match has become so common that shoppers are rarely moved by the latest advert proclaiming another price-matched fizzy drink or loaf of bread. Prices will become more dynamic and based on the shopper’s own unique profile, spending habits and patterns. Supermarkets will move to exploit their big data by using profile information to present shoppers with relevant and contextual pricing.
2. Home printing – forget waiting for home delivery. Home 3D printing will revolutionise how we buy and use products in the future. Small items will be bought online with the finished products being printed in our home within minutes ready for use. It might seem like sci-fi now but 3D printing will revolutionise the way we engage with products. Retailers will be able to reduce their complex supply chains and remove the burden of end-of-season surplus stock. Printing will enable products to be created only when needed, helping to boost sustainability in the process.
3. Rapid delivery – think drones, think valet shopping. Amazon and DHL have already demonstrated their ambition for using drones for small item delivery. The benefits are enormous, especially for areas where delivery can be expensive and cumbersome. Both Google and Ebay are testing the appetite for hyper local delivery whereby stores and customers are connected, with deliveries taking place in under one hour after ordering. Watch the video below to learn more.
4. Dynamic delivery – customers will soon be able to change their delivery in real-time without incurring penalties and negative implications. The likes of Volvo are investigating how deliveries could be matched to the location of your car. ‘Roaming’ delivery would mean that those working 9-5 could have items delivered to their place of work without it having an impact on the company post room. It would also enable flexible delivery times with shoppers not having to rely on leaving packages with neighbours or simply having them left out in the rain.
5. Ambient and anticipatory commerce – recently in the news with Amazon’s talk of shipping products before an order is placed. This trend will revolutionise retail. Businesses that can monitor customer behaviour in real time will be better placed at shipping products to locations where customers are close to placing an order. One of the biggest opportunities for retailers is the ‘lifetime guarantee.’ Brands such as Nike will be able to ship new trainers based on the number of miles you’ve done and the likely state of your trainers given your exercise regime. Customers will sign up for a lifetime subscription where in-trainer chips communicate with Nike to inform of wear and tear. New trainers will be shipped only when needed. With the arrival of the ‘internet of everything’ this trend will impact a whole host of products and services from the tyres we drive on to the food we eat.
6. Subscription – we’re moving from a world of one off payments to an environment where subscription will dominate. In order to improve customer lifetime value retailers will work hard to build a subscription proposition which gives customers new product offerings within a subscription model. This trend will move beyond just access to content to provide customers with new garments on a monthly basis or a regular delivery of groceries.
7. Contextual shopping – if you’re interested in sports, have recently completed a triathlon and find yourself walking past a Decathlon outlet don’t be surprised to receive an offer message direct to your mobile device. With the rollout of iBeacon the future of contextual retail gets ever more exciting. Retailers will be able to reach out to value customers who are more susceptible to offers and have a higher propensity to complete a sale. Contextual retail will put relevance and location at the heart of retailing.
8. Pop-up and experience stores – the death of the high street is exaggerated. Whilst many retailers will close and abandon their outlets many will simply rationalise and put their efforts into creating ‘destination’ and ‘experience’ stores. The likes of Apple have shown that having a number of large stores in key cities can help compliment online environments by providing customers with the potential to play with products and services. The need for a nationwide, evenly spread store footprint is no longer necessary.
9. Joint strategic partnerships – customers don’t buy in a silo. Buying new trainers for a new exercise regime will also be synced in the customer’s mind with purchasing healthier foods. Complimentary retailing will see brands coming together to offer joint propositions and offers. Retailers will decide in some instances to share floor space to bring these concepts together. It won’t be long before you’re getting your BMI tests done at the same time and place as buying your stir fry vegetables and Nike plus trainers.
10. A mature sharing economy – whether it’s Airbnb or a Liftshare, retailers will start to concentrate bigger efforts to enter the sharing economy. Clothing retailers will work to complement their traditional sales with sharing models where customers can rent clothes or other products for a short space of time. In western economies the need to ‘own’ will be supplanted with the need to ‘try, not buy.’
11. The end of sales – this might not happen given the emotional attachment to and excitement around sale shopping, but with big data there is the opportunity to avoid the need for end-of-season sales. Traditionally retailers are left with a bulk of unsold goods which need to be sold at cost or have their value written off. The purchasing of ‘hits that miss’ will be replaced with purchasing that takes into account various factors and means retailers only buy what they know they can sell.
12. Dynamic store layouts – already well-established in clothing retailers such as H&M and Gap this trend will expand with local communities seeing their high street outlets change by hour and day, not just season. National retailers will move from a ‘one size fits all’ model to a more flexible approach where layouts take into account local needs and requirements. For some stores they may even offer dual- or multiple-usage. A clothing store during the day might become a late night music store during the evening and night. Bike stores that sell high end road bikes will host cycling community events to broaden customer engagement.
These are just some of the trends emerging in retail. With so many more it’s often easy to feel overwhelmed with the pace of change. For retailers who are looking to the future the rewards will be significant. Whilst many blame the recession for the demise of the high street, the shift to online shopping had a bigger and more significant impact. Successful retailers anticipated this shift and evolved accordingly. Hopefully some of these trends will help retailers looking to future proof their businesses.