The retail industry has witnessed significant transformation in the past year, be it innovating with technology, optimizing operations or experimenting with new retail formats. In 2016, this trend is only expected to grow bigger, signalling more exciting times for retailers and customers alike. Going forward retail is expected to become more dynamic, seamless and personalized.
We will see trend setting tech innovations like iBeacon, augmented reality, machine learning and, wearables, among others, to change the course of retail by intelligently integrating online and physical shopping experiences.
In this blog, we bring to you, the latest retail trends that every retailer should leverage in 2016.
1. Customer personalization will gain more importance
Customers today expect unique and customized shopping experiences – be it being greeted with personalized welcome messages, receiving tailored loyalty programs or intelligent preference based product recommendations. In fact, according to a recent survey by Accenture, nearly 60% of U.S consumers agreed that they want a more personalized shopping experience with real-time promotions and offers. Hence, personalized shopping experiences will be a key differentiator among brands as we move forward.
A great way to incorporate customer personalization, is to leverage iBeacon technology. Beacons help retailers deliver enriched, personalized and seamless customer experiences, be it, promotions, in-store navigation or loyalty programs. Beacons also help make customer experiences a notch better by stitching together the data collected from customers’ digital and physical journeys. From activating purchases through personal notifications to enhancing in-store experience through innovative beacon based store assistance, beacons are proving to be invaluable to retail.
An innovative use of the technology can be experienced with the Knomi app. Knomi, a Finland and London based fashion discovery startup, enables high-end fashion boutiques to undertake niche and personalized marketing initiatives, through its beacon enabled app. Fashion boutiques that have partnered with Knomi will have to install a BLE beacon, so that the users of the app, who happen to be in the vicinity of the store would receive a push notification suggesting that they go check out a certain item. These notifications are highly tailored and, based on the personally curated fashion collection of the each individual customer.
If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!
2. Data-driven decision making will gain prominence
Predictive analytics helps determine and deliver data-driven insights from the past and predict future customer behavior, so that retailers can precisely cater to customer needs. It can prove to be an an invaluable tool that retailers can leverage for a host of functions from optimizing pricing, to perfecting delivery, to personalizing customer service, to even improving the bottom line.
In addition, given today’s online economy, predictive analytics should ensure that data from traditional POS systems as well as new age channels like social media, are measured simultaneously, in order to get a holistic view of data and drive precise results.
Another trend that is fast gaining importance in data sciences is machine learning. These algorithms are built in a way such that, they learn from the data that is being collected to make more accurate predictions.
Machine learning is already being used by some leading global retailers. For instance, e-commerce giant, Amazon uses machine learning to power a wide variety of decisions for its business. To quote an example, Amazon credits its online pricing strategy to machine learning; the intelligent solution allows Amazon to quickly make price comparisons for millions of products they buy and sell and predict the lowest price for each item.
3. Social shopping to get more traction
According to a recent report by eMarketer, by 2016, mobile device users will spend 3 hours 15 minutes per day using apps. This creates a perfect window of opportunity for businesses to engage customers through social media platforms.
Adding to this, the rise of the on-demand economy, where customers feel the need to purchase products that they see almost instantaneously has led social media platforms to incorporate instant shopping opportunities. The year 2015 saw popular social platforms open up shopping opportunities for their users. Pinterest, Twitter, Facebook, and YouTube all made their sites and apps more suitable for online commerce with the introduction of buy buttons.
In a recent survey by GlobalWebIndex, customers’ interest in buy buttons ranged from 9% on Facebook to 17% on Tumblr inspite of being launched in the same year. This trend is expected to catch on in a big way in 2016, given that 34% of retailers expect to increase their revenue from social-media referrals, according to a survey by Boston Retail Partners.
4. Augmented reality will create immersive experiences
Augmented Reality (AR) is one of those technological advancements that is envisaged to have massive potential in the retail space. It allows retailers to connect with customers in the most immersive manner, be it inside the store or outside. From shopping aisles to product displays to even fully immersive stores, AR can help create a series of virtual assets for retailers, like never before.
Currently, AR is also being used extensively in online commerce, where such enhanced experiences are used to bridge the gap between online and in-store shopping.
In an interesting example, China’s largest online grocery store,Yihaodian, built over 1 thousand virtual shops in several public places, with the help of AR. Customers who has downloaded the Yihaodian app, were able to browse and shop in the virtual store that was powered by AR; once the goods were purchased, they would be directly delivered to the customers’ homes. Yihaodian also set a Guinness World record for selling 2 million boxes of milk in less than an hour.
5. Mobile Payments will surge ahead
Payment solutions are expected to become more mobile friendly, while at the same time be robust, and include easy and effective solutions like buy online/pickup in store transactions, along with buy in store/ship anywhere transactions. Product returns and exchanges would also become a part of the mobile POS repertoire. Leading retailers like Nordstrom and Waitrose have already implemented such solutions and moving forward, we can expect more such deployments.
2016 will also witness the blurring of the online and offline divide in retail. Customers are expected to leverage apps to check out products on their phones, while inside the store – and use them increasingly to make payments as well. Alternatively, customers may also choose to pay for things that they want to buy before they even enter the store.
Mobile payments are proving to be highly effective in driving engagement and sales, like in the case of Starbucks, where, in less than a month’s time, Starbucks’ Mobile Order & Pay feature drove 5 million transactions a month and a huge number of new downloads of its mobile app.
One of the technologies gaining momentum in mobile payments is iBeacon. Beacons can prove to be an effective and efficient solution to drive sales and digitise consumer payments. The technology is fast gaining attention in the retail industry, given the benefit of stitching together payments with other beacon enabled efforts such as loyalty programs and couponing.
6. The mobile first economy will fast become a reality
A recent survey conducted by Forrester concluded that by the end of 2016, 4.8 billion people across the globe will use mobile phones and smartphone subscribers will represent 46% of the global population. This is a clear indication that retailers should focus on investing in strong, mobile first retail strategies in order to connect with their ever-growing mobile centric customers.
Mobile first means that retailers will increasingly design their products and services for mobile phones or other electronic devices before simultaneously developing other interfaces on desktops or laptops. This strategy also requires a differentiated approach to planning, UX design, and development that puts handheld devices at the centre of both strategy and implementation.
This trend is expected to catch up in such a big way, that, some experts believe that retailers will no longer compete with each other when it comes to mobile: they will be competing with the mobile-first and mobile-only companies such as Uber and Instagram.
Without a doubt, 2016 will bring in significant changes to retail, from the shifting mobile paradigm to experimenting with augmented reality to leveraging strong data-based decisioning systems to power the shopping experience.
Thus, in order to stay ahead of the curve, retailers will need to enhance their products and services by empowering their staff to deliver premium service, convey the best digital interactions into the offline environment and allow customer behaviour and preferences to guide retail strategy.