As part of our yearly tradition, we step back to reflect and look forward to what the New Year will bring for ecommerce and multichannel retailers. Here, we hear from contributors across the industry about the upcoming trends they believe will sweep the world of retail.
Social media experiences will become so immersive, they’ll seem lifelike
Steve Bartlett is a founder and chief executive officer of influencer marketing consultancy at Social Chain
“Social media will move from being one-dimensional to an entirely immersive experience that users can engage with beyond a ‘like’ or ‘retweet’. 360-degree content will grow, enabling consumers to share content for people to explore at their own will. Social feeds will be overlaid onto reality, whether that’s through augmented reality-enabled apps such as Snapchat and Instagram, virtual reality headsets, or even via a contact lens. Audio is finding its place with the younger generation and we predict this will continue to increase making the relationship we have with social a lot more conversational – with voice-assistants manning our social pages at our request. Consumers will have the most seamless experiences possible, which engages multiple senses, so much so that social media won’t really feel like media anymore, but a reality.
GDPR will deliver more transparency and brand safety across the industry
Paul Maraviglia is a general manager in Europe at MaxPoint
“In the new GDPR-regulated world, if consumers aren’t seeing value from their interactions with brands they are unlikely to consent to their data being used. Therefore, to engage consumers and retain their trust, marketers and those in the data industry must prioritise the value exchange and keeping data safe. We predict this will see a new focus on creating a more robust CRM model to ensure opt-in.”
How retailers should ride the wave in 2018
Marino Gualano is a co-founder and general manager at MainAd
“Black Friday. Cyber Monday. Singles Day. Prime Day. Across the globe, consumers are hyped into a frenzied splurge on key shopping dates – a fantastic boon for retailers. But when the sale sign lights go out at midnight, the savvy online retailer needs to keep the store lights ablaze – there’s work to be done.”
“In the aftermath of the event, analysis of data on sales and consumer behaviour is key. Purchases on the big day may require follow-up accessories. Cautious shoppers may be having misgivings about an item left in their basket. There’s no time for a lull in conversions. Moving into 2018, retailers must optimise data insights to maintain momentum following key shopping dates. These customers are already engaged – let’s talk to them.”
Retail will need to rethink its approach to marketing
Wayne St. Amand is a chief marketing officer at Visual IQ
“Amazon , is killing retail. The world’s largest internet retailer offers consumers so many benefits that they are becoming increasingly less likely to buy offline. It’s created a new phenomenon called “showrooming”, where consumers visit brick-and-mortar stores to examine a product, only to buy it online with a different retailer and at a lower price.”
“The key for physical retailers in 2018 will be to find ways to restore customer loyalty. Retailers will need to think hard about how to curate experiences for consumers from the moment they walk in the store. When retailers are able to improve the in-store experience, consumers are more likely to re-visit the store as an activity or destination. Moreover, delivering a positive in-store experience is also the key to developing long-term relationships with customers that will help traditional retailers win the online battle.”
Scott Clarke is a chief digital officer and global consulting leader for retail, consumer goods, travel and hospitality at Cognizant
Admittedly, many brands have ploughed money into integrating technology into their physical stores to compete for footfall. However, it may not have taken off as expected, because many went head first into the investment without ensuring the appropriate back-end infrastructure, or training for sales assistants was in place to make the most of the benefits that in-store technology can bring. There is simply no point in retailers spending huge amounts of money on in-store technology if it does not work properly and nobody knows how to use it.
However, when done well smart stores have the ability to boost the bottom line. High-end retailer, Rebecca Minkoff, saw sales shoot up by more than 200 percent following the introduction of interactive touch-screens that let shoppers choose products to be sent to their dressing rooms. These dressing rooms also include interactive mirrors that can adjust lighting and contact sales associates. Screens will allow people to view the clothes they are trying on in different colours sizes and looks, completely personalising the customer experience.
Price will become an even bigger differentiator
Guy Chiswick is managing director at Webloyalty
The margin squeeze will continue to be a challenge for retailers in 2018, as interest rates start to rise and consumers feel the squeeze from high inflation and slower pay growth. With our 5Ps of Shopper Motivation report identifying the profile of Price Motivated shoppers being the most dominant in the UK (representing 52% of the population), retailers will be challenged to keep prices low to remain competitive. This may force many retailers out of business and cause some high profile casualties.
It could also mean a shift in the retail marketing mix. For those fixated on battling on price, this could result in less emphasis on experience and a shift towards price-led strategies. Meanwhile, others not willing to be driven down could focus on branding to help themselves stand out, or use physical stores to provide an experience that can’t be delivered online.
Shaking up the concept of long-term commitment, the price squeeze and wider generational shift towards a rental model will see a bigger push towards subscription and rental models, from car rentals, to dress hire and books.
Retailers will explore secondary revenue options to remain profitable
Similar to how airlines turned to ancillary revenues and began selling car hire, baggage and food to remain profitable; recent research has indicated that this trend has translated over to the world of retail too.
Our 2017 Beyond the Core report, produced in conjunction with the British Retail Consortium, found that two-thirds of UK retailers are already using secondary revenue methods and 18% of retailers are generating at least a fifth of their income through non-core revenue streams. With the continued squeeze on profit margins, it’s clear that the use of secondary revenue streams is only set to increase – with popular methods including retailers selling advertising space on their websites and partnering with external loyalty schemes.
With Amazon and Starbucks already branching out to offer their own – or co-branded – credit cards, retailers will be challenged to think creatively about how they can diversify their income as well as maximise their websites and customer base; a move that may leave us considering the rise of the ‘Chief Ancillary Officer’ throughout 2018.
Picture credit: kathayut (Fotolia)