Over the last year we have seen technologies shake up the retail sector, from “See now, buy now”, social shopping, contactless payments, and the Amazon Dash button, advancements in this space are peaking. As innovation has grown, so have the demands of today’s shopper – 2017 will be a challenging year for British retailers.
However, if retailers are savvy with the latest technologies and solutions, it is also a year that will offer considerable opportunities for retailers to grow and thrive.
1. The mass move to mobile
“New mobile payment methods took the retail sector by storm in 2016, with Apple Pay allowing consumers to pay for their goods with just a touch of a finger. Through the holiday shopping season and into next year, we’ll see shoppers shift from simply browsing, to completing the entire shopping journey on their mobile devices. The attention span of shoppers is dwindling so people are increasingly turning to mobile shopping for its convenience and speed. Currently around 50 per cent of shopping is done on mobile and this is only set to rise in 2017 as people are finding less reasons to shop in physical stores.
“Many retailers are struggling to adapt to this new shopping habit and aren’t creating engaging apps or content, this must be a focus in the coming months in order to keep front-of-mind for shoppers. Expect to see fashion retailers upping the ante and transforming their mobile apps into a rich and enticing experience rather than a convenient ‘nice to have’. 87 per cent of mobile owners are using apps but only 3 per cent of these are retail apps. The app market is a crowded space but there is a great opportunity in the year ahead for retailers to embrace the appetite for mobile.”
2. Social driving shopping trends
3. The decline of the department store
“Marketplaces are conquering the retail sector at an alarming rate. The juggernauts Amazon, Alibaba and eBay are posing a threat to mass merchants, and the bad news for them is that marketplaces are here to stay. It is anticipated that global marketplaces will own 39 per cent of the online retail market in 2020.
Once their key differentiator, department stores are no longer able to compete on range, and many have forgotten the art of curating and bespoke service. If department stores want to re-establish themselves, they should think less about price and volume, and more about brand and customer engagement. Selfridges is a prime example of a department store fully embracing cutting-edge retail technology.
In 2016, it debuted a shoppable app including a ‘shop-by-Instagram’ functionality, using self-generated content as a means to drive sales. In 2017 we’re likely to see other stores following Selfridges’ lead in providing variety in combination with a tailored experience.
Misguided is an example of an online retailer fusing the online and in-store experience to create an immersive shopping experience. Its newly opened physical store encourages shoppers to Instagram and Snapchat their experience, placing reminders and hashtags throughout the shop floor to create a social buzz.”
4. The personal touch
“Personalisation is widely recognised by retailers as a key driver of sales, yet many are still failing to execute effective strategies. Previously, this was understandable given the fine line between bespoke deals and an overbearing retailer bombarding the shopper with too much information. Yet in 2017, with the tools available to retailers, there should be a dramatic departure from shooting blind.
“Aside from the ethics of personalisation, the cost of content production is spiralling. With the number of channels to communicate with customers growing, serving highly relevant content becomes much harder. To top it off, production costs are escalating in line with the need to cater to mobile and multiple markets, making it harder for retailers to be agile. In 2017 and the coming years retailers must focus on streamlining their infrastructure to allow for smooth-running omnichannel personalisation.
“As the Internet of Things (IoT) continues to creep into our everyday lives, retailers have more opportunities to provide customers with informed recommendations by gathering more information from a range of devices. We are going to see fridges telling consumers when they are out of milk and existing smart home technology, such as the Amazon Dash Button becoming more advanced and widely used. It’s time retailers fully embrace the opportunities they have to provide customers with a bespoke experience and engage with their customers to deliver the best messages at times when the customer is most receptive.”