Now that the New Year is off to a healthy start, let’s highlight the six retail trends that will dominate 2014. After checking out all the chatter on the internet, this is the general consensus:
1. Data & Security
Firms that integrate data from their online, physical, and mobile spaces will emerge from 2014 far ahead from those that fail to embrace a big data mentality. As Forbes recently stated, “...the Internet of Things holds vast promise for retail. By capturing continuous, real-time streams of data from mobile devices, online customer activity, in-store [analytics devices], installed consumer products, and a growing array of “wearable” computers, retailers will gain unprecedented insights into customer behavior and desires.” Businesses that operate in physical retail spaces will have to leverage these data sources and become more advanced in how they are keeping track of demand, customer interest, inventory, and integrate data from their physical and virtual channels. At the end of 2014, we’ll look back and see that this is the most important trend of the year as data will drive disruption and innovation in the industry.
In a similar vein, data security will take center stage as well in 2014. Ensuring the safety and security of customer data against breaches by attackers or otherwise will be key. With the major data breach at Target last month and the recent announcement that even more information was stolen than previously thought, consumers will demand assurances that their data remains protected.
2. Precision Shopping
Retail sales rose 2.7% in November and December, but actual in-store visits declined 14.6% according to the LA Times. This data suggests that shoppers are conducting extensive research online about products before they go into the store to buy. People know what they are going to buy and how much it will be before they even set foot in the store. It’s imperative that retailers provide as much information to consumers as possible and be able to identify these precision shoppers in-store, and potentially upsell them with targeted offers and deals on the spot. As it becomes easier for people that are not so technically inclined to get familiar with doing research on potential purchases, precision shopping will keep gaining popularity and retailers will need to adapt and evolve.
3. Content Marketing
Retailers are going to entertain you to close a sale. As Bernard Luthi, CMO/COO of Rakuten which invested $100MM into Pinterest, writes: “The lines between entertainment and shopping are blurring further and 2014 will see more retailers offer shoppers a richer, content-led shopping experience. Driven by the media, which have become retailers in their own right to bolster dwindling revenues from advertising and subscriptions, savvy retailers are using multimedia content to make the shopping experience more engaging.” It will be important in 2014 for retailers to leverage content creation talent and measure its effectiveness with customers.
It’s only going to get easier for people of all ages to look up products online and compare prices, even right there in the store itself. Retailers can battle this problem with on-the-spot competitive pricing and sales/coupons, and also equipping store employees with technologies to measure customer interest in real-time and trigger a salesperson when a customer has been browsing a product for a certain amount of time. Also, Retailers can use data to measure the effectiveness of their in-store marketing efforts and product displays to try and land purchases from showroomers before they leave empty handed.
However, the situation is not as bleak as predicted by analysts. CNBC reported that online sales only grew 10% in November/December, falling below analyst’s expectations. As the Holiday shopping season of November/December is a bellwether for the retail industry, retailers can still have ample opportunity to draw customers and purchases inside their stores.
5. Predictive Analytics
This goes hand in hand with big data. Firms will increasingly take data from all available sources/channels and use it to drive in-store decisions and personalized services. As data analyzation software becomes more robust and sophisticated, stores will be able to identify and increase sales by tracking customers and triggering certain marketing videos or specials/coupons depending on their behavior in store. Retailers that utilize these technologies will see a more optimized and state of the art company compared against 2013.
6. A Better Economy
Let’s face it, 2013 was not a cause célèbre for most retailers and consumers. Although home values and equity markets rose and gas prices fell, consumers experienced stagnant wage growth and low confidence. Coupled with the payroll tax increase at the outset of 2013 and a government shutdown in the fall, consumer spending power took a big hit which was felt by retailers nationwide.
With last year’s economic curveballs in mind, analysts are cautiously forecasting a better year for consumers and retailers alike. Retailers will have much to look forward to this year, and it will be even better for them if they keep abreast of these trends that will shape the retail industry in 2014.
Interested in retail analytics and getting ahead of these upcoming trends but don’t know where to start? Connect with us and we’ll show you the way!