It won't come as a surprise that tomorrow's retail world is already here! Catalytic forces at play include accelerated digital technology use, wider acceptance of cloud capabilities, the explosion of mobile commerce, and more. All aimed, of course, at serving the multi-connected, multi-channel, multi-available consumer. And, when all is said and done, having the right products at the right prices at the right places at the right times, and... making a profit. Speaking of consumers, retailers will zero in on the shopping and buying behavior of millennials more than ever this year. All of these challenges have attendant wrinkles and pitfalls that retailers need to confront. Here's our short list of what's hot for 2016:
1. Consumer, consumer, consumer…
Just as it was always "Marcia, Marcia, Marcia," in the Brady Bunch, it continues to be "consumer, consumer, consumer," in the retail world.
Assembling, wringing out, and then effectively utilizing the extensive data on consumers will be tempered by how far retail can go in compiling, exploiting and using this info (while staying within boundaries of consumer wishes and permissions, as well as what is reasonable use, and even what is legal)?
Here are some of the reasons consumers say they'd be willing to share their data:
2. Digital technology adoption goes into higher gear
CEOs want to see a strong connection between digital investments and business objectives. That includes operational efficiency, data and data analytics; customer experience; digital trust including cyber security, and innovation capacity.
Retailers were slow to get moving on using and learning to use digital technologies and maybe slow to "trust the cloud", but they've now begun to acquire, understand, and use the technologies with a vengeance. Here are a few examples from PwC of how they're using those technologies to create value in their organization:
3. Digital data will be seen for the value it provides
Retailers need to understand how to analyze and leverage this data. This means data that provides deep insight into a target market's preferences and helps develop successful campaigns. (Also using the behind-the-curtain retail intelligence technology and data for effective, successful merchandising and pricing).
4. Everyone is putting their money on mobile
Although the number of people who browse on mobile devices passed the number of desktop users a long time ago, mobile conversion is still lower than online conversion at this point.
The 2015 holiday season saw some over-the-top numbers for mobile use, according to Nikki Baird, RSR Research principal. If nothing else, this should prove that mobile has “arrived” – that it is a separate beast from “eCommerce” in many ways, and that retailers need strategies for how to support the mobile shopper.
Retailers just don’t seem to know how to provide a mobile experience that enhances the in-store one. Someone will hopefully figure that out in 2016 – and that will be disruptive, says Baird.
PS Mobile payments are also predicted to take off in the coming months.
5. Organizational restructuring will be normal and needed
There are several people within your organization who will need to use the data, even if for different purposes. Marketing, sales, merchandising, and top management may have different uses of the data, but are learning to interact with each other in new ways to achieve the immediate goals as well as mandates and long-term plans of the company.
6. Social media should become a strategy
We'll see more use of socials, but especially the need to get to the stage where social media is used as a channel that supports marketing campaigns, not a marketing end in itself.
7. Influences of the omni-channel continue
Omni-channel drives deeper into the organization and important places like the supply chain, merchandising, and customer service. In order to do omni-channel right, companies are going to have to step back and revisit the fundamentals of their business model.
8. Millennials hold sway
Born between 1980 and 2000, there are roughly 80 million Millennials in the United States alone, and each year they spend approximately $600 billion! Millennials continue to exercise great influence on the retail scene. They use their mobile devices to research and compare prices. The next major challenge is to get them to complete sales on their mobile devices.
Bottom line for your bottom line:
The NRF forecasts above-average growth, expecting sales to grow both in-store and online in 2016, with online commerce expanding at up to three times the rate of physical stores.
The way that information is consumed is changing drastically, It’s getting easier and easier to bring data together, and the tools to analyze that data are getting more sophisticated and easier to use. But the rub is not only gathering and sifting your data, but selecting the right data and using it correctly.
Many advances will be made in 2016 in digitization and digitalization, mobile commerce, consumer personalization, catering to millennials, and use of intelligence technology.
Mobile will continue to make an impact and become the center of marketing. The prevailing wisdom is that mobile transactions will transition big time from mobile shopping to mobile buying.
Millennials are major consumers who will carry big influence with using data, and how data about them is used.
Sources: PwC, eMarketer; ZoomInfo; RSR Research; Deloitte; Global Trends.