"Should auld acquaintance be forgot… and never brought to mind"… a Robert Bruce poem which became a song celebrating beginnings and endings… And while the New Year is a time to write about trends in eCommerce Online Retail Competition, I'm going to revisit a blog post: Notable Trends In The Retail Wars Legacy, to organize some of the trends in a more significant order of importance: Technology developments, what retailers are doing to reinvent themselves, changing demographics, attitudes about the economy and prices; and the development of competitive support services. Some of the trends play a major, and growing, role in eCommerce competition; others are sort of "middling" trends, and others are evolving trends that aren't wielding heavy-duty influence on shopping, yet.
1. Life and Retail Are Accelerating. There's no question that people are leading increasingly hectic lives. (Back in 1900 people slept for 9.0 hours every night. Now it’s just 6.9 hours). People have never been so "connected" or have such an array of tools at their fingertips. This is driving trends like constantly being "on", can shop anytime, anywhere, anyplace.
2. Technological Innovations Are Multiplying. The whole shopping milieu and the connected consumer have forced retailers to utilize all kinds of technological conveniences to keep up. From the use of smartphones and applications, better display and understanding of merchandise and assortments, making more knowledgeable, helpful associates, and speeding the checkout experience. Not to mention state-of-the-art tracking technology and the exploitation of big data to enable customization and outreach to consumers, better management of data and inventory, and more competitive pricing.
3. Prices Are Polarizing. Do you feel it? By 2015, the futurists predict that the middle class will have disappeared in most developed countries taking mid-price retailers with them. Most consumer markets will be polarized with low price at one end and luxury at the other. Many customers will have the ability to buy $15 T-shirts one minute and $500 jeans the next. Or some won't be able to afford the high end items.
4. Retailers Must Stay Physically Fit. By that we mean retailers have to be in physical stores. When the blog post was written, a whopping 90 percent of sales still occurred in physical store locations -- for a variety of reasons. Just as brick-and-mortar stores have been upping their game to compete against their online rivals, major online retailers are opening physical locations to let consumers browse in-store and buy online; or shop online and pick up in the store. It's still important to have the tactile capability, as well as the fact that many customers cite the social atmosphere as part of their shopping enjoyment.
5. More Penetrating Outreach To Customers. The ability to reach customers when they're in your physical vicinity or visiting a competitor is becoming more and more penetrating. So is the use of social media and personal contact to get opinions, and sending direct advertising when a customer picks up a product in store.
6. Generations Are Flipping. Statistics show that retailers who obsessively focus on young people are making a mistake. For example, a US study found that, while there were 7,700 clothing chains selling to the teen market (with a theoretical sales of US $5.8m per store), there were only 1,800 stores targeting baby boomers (with theoretical sales of US $19.2m per store)! Where would you put your retail development money?
7. Women As Buyers & Decisionmakers Should Be Given More Attention. It must be valuable to retailers to know that women are the biggest market on earth -- and then cater to this audience, but, other than women's fashion, I'm not sure that the retailers cater enough.
8. Sectors Are Blurring. Bookshops selling coffee. Coffee shops selling music. Music stores selling groceries; and supermarkets selling loans and phone contracts. Many have been doing this for quite a while.
9. Shoppable Media Is A Pushbutton Wonder. Shoppable media is the industry term for video or print vehicles where the customer can push a button in the midst of the video/movie/YouTube to indicate interest in an item in the video and put it into their shopping cart. See Shoppable Media: 6 Ways “Shoppable Media” Beget Retail Profits & Where Price Doesn’t Seem To Matter -- and where this technology is headed.
10. Mass Customizing and Bespoking For "I" People. As some groups of people move into the age of luxury and the ‘made for me’ milieu (think polarization of economy), you'll see a lot more of the word, "bespoke" as more customers use items custom-made, by, and for, themselves.
11. The Effect of Brand Politics. Customers will check for information about brands' ethical policies (e.g. natural or synthetic fiber, sweat-shop-free, minimum-wage produced products, etc.) online and by scanning with mobile phones, but won't affect the majority of purchases.
Bottom Line For Your Bottom Line:
It remains important for retailers to think about the economy, social stratification, generational anomalies, multiplying uses of technologies, competitive pricing and assortment intelligence to stay strong in the retail competition game.
In order to know where you're going, you've got to know where you've been. You must learn from the past in order to exist and survive in the present; and, most important, understand and prepare for the biggest challenge of all: eCommerce Online Retail Competition of the future.