The world is changing, and consumers and their habits are changing with it. They’ve grown more familiar with technology than ever, and weave it into all aspects of their lifestyle. Including how they spend their free time and disposable income. Today’s consumer is tech savvy enough to find discounts, compare deals and find local businesses in a few dabs of a touchscreen. If they’re to continue to bring value to their customers, retailers need to change, too.
And that can mean more than just expanding their product lines. Whether retailers operate in physical stores, use online retail platforms or do a little of both, they’ll need to remain agile and open-minded to weather the winds of change with aplomb. A better understanding of your business’ performance is vital to staying ahead of the competition.
Here are 4 trends that have already begun to emerge in the world of retail which businesses will do well to anticipate in 2020 and beyond.
#1 - Immersive customer experience backed by powerful “back of house” tech
As online retail has begun to take up more and more of the market share, brick and mortar retailers began to realise that they needed to create a boutique in-store experience for customers to remain competitive and relevant. However, with more and more new retailers throwing their hat into the digital ring, online retailers are also under pressure to create an immersive and novel customer experience.
Many brands are using virtual and augmented reality to supplement their online and in-store retail experiences. Virtual stores and vehicle dealerships allow researching consumers to get an in-store experience completely online. Likewise, digital apps like IKEA’s “IKEA Place” allow consumers to see, through augmented reality what certain products might look like in their homes.
Flashy in the front, busy in the back
But while these may be the flashy and novel technologies that gain consumer interest and generate buzz around brands, they need to be supplemented by intelligent and capable back of house tech.
Businesses with growth in mind will need to invest in their back office infrastructure to ensure that operations are smooth and efficient and that customers get the continuity of service they expect. From POS systems that ensure you never run out of stock to AI platforms that allow them to manage inventory across multiple channels, the most impressive technology may be the stuff that works its magic behind the scenes.
#2 - Payment flexibility will become more commonplace
For the longest time cash was king in the world of retail. But in an era where we just can’t get enough of convenience, who needs to be fumbling around with 5p coins? 1 in 10 British adults now admit that they “never use cash at all” and as such consumers are beginning to demand more flexibility in how they pay for their goods or services.
This doesn’t just mean making sure that you’re equipped to take credit or debit card payments. It means being able to offer flexible repayment schemes for higher value purchases. Many retailers have begun to partner with consumer finance companies to allow customers to buy now and pay later with terms that are easily manageable for them.
This goes some way towards removing barriers to purchasing and allowing you to increase your value proposition. Consumer finance company Klarna UK’s General Manager told the IMRG that their research showed how 66% of customers would spend more if retailers offered more flexible repayment plans.
Not only will brands need to become more flexible in how they accept payments, they’ll also need to become more flexible in how much they charge. Today’s consumers are always on the lookout for the best deals. With apps like Honey giving users instant access to coupons and vouchers, and promo code platforms making it easier for retailers to offer their customers promo codes, consumers are less likely than ever to accept any price but the best price.
As such, you’ll always need to know what the best price is that you can offer while still maintaining your cash flow. Dynamic pricing based on accurate demand forecasting is one of the many ways in which retailers will need to leverage data to improve their service and value proposition.
#3 - Shifting towards sustainability
No longer can consumers turn a blind eye to the impact their decisions make on the environment, communities around the world and the economy. With knowledge and enlightenment have come the desire for real change, and consumers have begun to demand a kinder, more ethical form of consumerism. What’s more, they’re prepared to pay for it. Studies show that almost 75% of the millennial generation will choose brands that demonstrate ethical awareness and Corporate Social Responsibility over those that don’t. Even if they have to pay more for the privilege.
As ethically aware millennials take up more and more of the market, the 2020s will likely move further and further towards more sustainable and ethical brands and products. Some examples of this might include:
Buying clothing made from organic materials rather than synthetic fibres
Buying more plant based and fewer animal derived products
Choosing vegan and cruelty-free brands
Buying products made from recycled or repurposed components/ingredients
Buying more used clothes and refurbished tech
Buying from brands that secure better pay and conditions for overseas workers
Choosing brands that minimise their waste and take active steps to reduce their carbon footprint
It’s safe to say that if your brand doesn’t consider its social, ethical and environmental responsibility, it may not resonate as strongly with an affluent and fiercely brand-loyal generation of consumers.
#4 - In the omnichannel age, getting an overview of all your data is becoming more important
The age of big data certainly won’t come to an end in 2020. And as you leverage multiple online channels and platforms to expand their market reach, leveraging customer data will become more important than ever. With more customers joining from a variety of different channels, you’ll need easy access to data to present attractive deals and add value to your brand.
This will be made even easier with a holistic view of your business’ performance. However, how can you gain this overview, when all of your individual departments are siloed and chasing different goals?
The answer lies in the use of AI-driven platforms. While most retailers are using this kind of platform to enhance product listings, the right kind of platform can provide you with an end-to-end solution for specific channels, allowing you to understand your data across the whole product lifecycle. You can look at your product margins at SKU level, which will not only help you to understand your consumers and their buying habits, but also gain an understanding of your overall business performance.
Leveraging data will allow you to continue to make personalised recommendations based on past purchases and viewed product pages. You can then track individual departments’ metrics as well as an overview of your business. This makes it easier to help departments align their goals and work to the same objective of increasing profitability.
With more ways to gain a better understanding of your product margins, we can expect to see a variety of ways in which all kinds of data can be used to create a more convenient, secure and personalised retail experience for the customer.