We short listed some of the most interesting retail news coming out this week. This includes trends for 2017, Facebook m-commerce growth, and how millennials are shaping the retail landscape.
From the sustained growth of monobrand retailers (also called single-brand retailers) to the on-going decline of malls and the rise of online grocery, what retail trends are you watching closely?
Trend #1 - The Path To Consumers Will Become More Direct - is exciting if you consider early e-commerce technologies like Tipser. This Swedish startup is turning media and the ad-based business model on its head. Basically, Tipser allows bloggers and journalists to embed commerce directly in their content.
Consumers will be able to fill their basket with products suggested by their most trusted advisors and complete their purchase right there "in-content", even if the basket contains products from multiple different retailers.
"There are four benefits to the marketplace model that make it attractive to companies that have previously operated in the direct-retail sector:
- It is highly profitable. Marketplace sites can charge double-digit commissions for simply acting as portals. Fulfilling orders on behalf of sellers provides an additional revenue stream.
- Marketplaces are protected from the risks associated with owning stock.
- Shoppers are less likely to walk away unsatisfied, as the long tail of product demand can be satisfied with little effort by the retailer, in turn building loyalty and repeat visits.
- A marketplace model offers an asset-light way of entering new regional markets."
Facebook's insights point to a promising future for m-commerce in the US and the UK. Looking closer at m-commerce in the UK, we see the same trends as those outlined in this article for the US market.
Although the majority of mobile buying in the UK still occurs on tablets today, eMarketer forecasts that by 2020 smartphones will represent 52% of m-commerce transactions and £22.1 billion in sales.
We believe m-commerce would be much further along if the mobile shopping experience weren't so terrible. Thankfully new technology like Loop54 is helping to change that.
"In a first for the social media giant, Facebook experienced more mobile transactions than desktop over the 2016 holiday season, according to recent numbers from Facebook and Kantar.
Mobile accounted for 51% of online transactions from November 1 through December 31, up from 41% in 2015. Overall, the study outlines the need for retailers to stay ahead of the mobile trend and keep up with where people are spending their time."
Interesting take on how m-commerce and other new retail technologies are forcing department stores to re-think their cost structure and cross their fingers in the hope that tech investments like m-commerce soon become the revenue drivers they were told they would.
“Retailers are looking at an 11% revenue shortfall over the holidays based on what they would have done on desktop,” said Matt Asay, Adobe’s VP of mobile. Retailers like shoppers’ attention wherever they get it, he said, but they’re trying hard to figure out how to turn mobile attention into something more tangible.
Though even if large retailers’ mobile commerce matched consumer mobile adoption, they can’t avoid some additional costs.
Mobile shoppers in the US have demonstrated a strong preference for free shipping and speedy delivery, which favors Amazon and ecommerce markets that don’t have the overhead of a massive store footprint."
From personalisation to m-commerce, millennials are the driving force behind it all. At the same time, they are an enigma. While technology is central to their lives and brands wishing to gain their loyalty must engage - and sell - to them through a multitude of online channels, millennials also seek authentic offline experiences.
This desire for unique and meaningful in-store experiences are why we see growing trends like "web-rooming". According to one PWC study "Web-rooming" is just as important as "showrooming" - while 68% of consumers say that they have browsed products at a store but decided to purchase them online, 70% say they have done just the opposite; that is, browsed products online but decided to purchase them in-store.
The goal is to create in-store experiences that are Instagram or Snapchat worthy, that merit their own hashtag, in addition to improving loyalty and the propensity to buy.
"In order to appeal to this generation, retailers need to provide a seamless customer-facing retail experience. Whether this is online or in-store, millennials seek customer service professionals who understand their preferences and make recommendations tailored to their specific needs.
Millennials want a customer-centric experience in which they feel wanted and valued. Whether it is in-store or through social media channels, showing interest in these shoppers creates loyalty. In order to do this, retailers need to closely examine what they’re currently doing with customer data, and ensure this information is being utilized to deliver a more personalized in-store experience. This can include where customers shopped last, what was purchased, and their motivation to convert."
It's really quite telling when the majority of consumers feel an online experience is more personal than a physical one. This could either mean that ecommerce is doing a great job of tailoring the user experience, or that consumer expectations of what their in-store experience should be like is more sophisticated in-light of what they see happening online.
The amount of energy require to visit a physical store obviously surpasses the effort needed to shop online, so is it any surprise that consumers will then have higher demands for their in-store experiences. Otherwise what's the point of shopping in-store?
"Shoppers getting used to convenience and personalisation online now expect those qualities to extend to the store, a new study suggests.
Research for the iVend Retail report...found that twice as many consumers (27%) expected online personalisation to be mirrored in the physical environment in 2016 than did the previous year (13%).
More than half (59%) of UK consumers felt the online experience was more personal than those that take place in the store, while 86% said it was more convenient. Fewer UK shoppers felt that the store was outdated (16%) compared to online shopping than in 2015 (20%.)"