With significant advancements in technology, retail has to adapt to new market trends along with other industries. In order to understand the main trends in retail, communication agency Walkers Sands performed a study and released a report in June 2016, suggesting four areas’ trends that will be seen in retail in 2016 and beyond.
Recognizing that even subtle changes in consumer habits and behavior can have a significant impact on retailers is the key to change and the way for companies to stay relevant. Retail technology is going through a major tech-powered transformation and the study of 1,400 US consumers reveals four key areas where retailers should focus their efforts in 2016 and beyond.
Growing importance of the supply chain
In the days of same-day delivery, seamless shipping, delivery and returns are an important part of positive customer experience. The report suggests that supply chain efficiency has become more and more important to consumers, making them primary future drivers of e-commerce growth.
The importance of seamless experience with supply chain made it the top investment area for retailers. In fact, “29% of capital expenditures last year going toward solutions like transportation and logistics, delivery options, order management, inventory visibility and returns management.” Moreover, 71% of the executives in WS study cited omnichannel fulfillment as a top or high priority for future investment.
And although the survey found out that just 9% of consumers have used same-day shipping in the past year, almost half (49%) said that the same-day shipping option would make them shop online more if it were offered more frequently. “As consumers shop online more frequently, they are increasingly persuaded by the speed of the supply chain.”
Integration of in-store and online experiences (time for beacons to do their work)
Seamless alignment of online and in-store experiences is a major factor of success given that online shopping is gaining extraordinary momentum and brick-and-mortar retail is experiencing a certain fallout.
However, despite the perceived decline of brick-and-mortar, the study by WS suggests that “there’s still a clear preference to shop in physical stores for most product categories, but a receptiveness to blending the online and brick-and-mortar experiences.”
In 2015, less than a third of retailers had implemented beacon technology. Meanwhile, 7 in 10 consumers are found to be willing to opt into in-store tracking and mobile push notifications if they were properly incentivized by retailers. “Beacon-influenced sales at top retailers will grow tenfold in 2016 from approximately $4 billion last year.”
An interesting trend has been noticed in the survey regarding virtual reality. More than half of consumers (55%) think virtual reality e-commerce will impact their buying decisions, and 62% are interested in trying VR shopping.
The rise of luxury e-commerce
Luxury goods are an extremely important part of the retail ecosystem and a rapidly growing one. Since 2014, the number of consumers who have purchased a luxury item like high-end jewelry in the past year more than quadrupled. Moreover, by 2025, online sales of luxury goods are estimated to triple and reach around $80 billion, making the segment one of the fastest-growing areas of e-commerce.
And VR is expected to make an impact on the luxury segment as well. “Among consumers who have purchased luxury goods in the past year, 38% say they would consider buying luxury products via virtual reality.”
Slow mobile payments adoption
With all the hype around mobile payments, they are reported to demonstrate a flat YoY adoption rate. Among the main reasons for slow adoption are privacy (58%) and security (61%) concerns. Overall, the survey indicated about a third of consumers having used mobile payments applications.
However, this year, mobile payments transactions are expected to triple in the US, reaching $27 billion. Given that some of the most prominent mobile payments providers are actively enabling Web payments to boost online sales for retailers, mobile payments can potentially have a considerable effect on consumer behavior and surge transactional volume.
As for particular providers, Android Pay tops the list of mobile payments used by consumers (19%), followed by a retailer’s mobile app (12%) and Apple Pay (11%).
“Led by millennials, however, mobile payments are rising in popularity for POS and P2P payments. Because many of these younger consumers are more likely to blame retailers for the slow adoption rate, it’s important for companies to accept as many payment forms as possible.”