From OmniChannel Marketing to Augmented Reality, Predictions Abound
We have spent the month of January mulling over the predictions churned out in blogs, newsletters and the trade press regarding what the retail industry, and those of us in retail real estate, can expect to see over the next 12 months. For some of these, no crystal ball is needed – they are already becoming retail facts of life. Others seem a bit more cutting edge. And a few more read like the stuff of science fiction (but who knows?). Here are some of the visions that came across our radar in this opening month of 2015.
Already Here: Six Retail “Trends” that Will Continue
OmniChannel Retailing – Let’s change that name to just Retailing. Cross-platform merchandising is not the wave of the future but the state of the industry.
Boomers & Millennials – These two massive demographics will drive consumer behavior for decades. For the Millennials, that means MOBILE. This technology is essential to their lifestyle. Retailers and brands must use it effectively to survive. For aging Boomers, expect fitness centers and health-related services to continue to crop up in retail real estate nationwide.
Online Merchants Add Offline Presence – From hip brands like Warby Parker and Birchbox to the venerable Amazon, offline continues its bricks-and-mortar migration, with both pop-ups and established spaces.
Shopping as Experience – To woo consumers from their computers, retailers and retail real estate management will continue to add out-of-home excitement to the shopping trip in all kinds of creative ways. Stores now are social gathering places, centers for knowledge, learning more information, a place for fun, or relaxation. The bricks-and mortar are wonderful places that can deliver experiences in a way that a website can't.
Blurring of Sectors – From Ralph Lauren to Urban Outfitters, retailers are buying into the store-within-a store-model, serving up cocktails, coffee and more along with merchandise.
Pressure on Mid-range Retailers – High-end and value will continue to rule, squeezing retailers and retail real estate that focus on the mid-range shopper.
On the Horizon and Growing Fast
Big Data – It is bigger than ever, enabling savvy merchants to analyze everything from in-store traffic patterns to the purchase profiles of top customers. Ignore it at your own peril.
Smarter Security – Security breaches continue to make headlines and headaches, paving the way for sophisticated products like Apple Pay that eliminate credit or debit cards from transactions.
Social Networks as Shopping Platforms – Those “Like2Buy” links on Instagram and Twitter will get increased use in the coming year. Nordstrom and Target have jumped in already.
Good-Bye to Loyalty Programs – They are too commonplace to excite today’s consumers who respond to personalized offers instead. Retailers will have to try harder to keep shoppers coming back.
Localization – Inventory, store design and services tailored to the needs of specific markets are reaping results for AutoZone, Chipotle and Starbucks. More will follow in 2015.
Corporate Social Responsibility – Good behavior matters. A study by Cone Communications and Echo Research found that 87 percent of consumers globally factor a brand’s social concerns into purchase decisions. Smartphones let ethically oriented shoppers (often Millennials) check brands and retailers for fair trade practices or worker abuses.
Self Check-Out – Airport ticket kiosks and express checkout in hotels have accustomed time-starved consumers to quick exits. Expect this technology to migrate from retailers like Home Depot and Costco to department stores.
Today’s Sci-Fi, Tomorrow’s Retail
Wearables – Cutting-edge retailers are eager to connect with the ever-increasing number of consumers sporting wearable gadgets like fitness bracelets and smart glasses. Barney’s is experimenting and Kenneth Cole has developed a Google Glass app.
Drone Delivery – Amazon has announced plans to test shipping by drone, while Google and DHL have already fielded experiments in drone delivery in Germany and Australia.
Augmented Reality – Virtual fitting rooms, mobile maps for in-store navigation, and interactive displays and windows are cropping up in retail venues nationwide.
RIFD (Radio Frequency Identification Devices) – These tiny microchips with embedded antennas can help with inventory management and theft prevention, as well as transmitting promotional messages to browsing shoppers. Some see a future with RFID chips embedded in jewelry or in forearms with links to bank accounts or credit cards for seamless transactions.
When January 2016 rolls around, which of the trends we’ve collected here will be widely adopted? Which do you think will take hold among shoppers and retailers? Time will tell.