The retail industry has become highly competitive in the present times prompting the key players to come up with trends that yield the highest profit levels and retain competitiveness. The first trend states that retailers that promote sustainability, transparency and product quality. Consumers find information about products online, and this is important for the retail sector in the present times. The rise of sustainable and transparent companies such as Everlane and Warby Parker has led to a radical change in the retail industry. Consumers are increasingly interested in getting information about products and getting high-quality goods. Shoppers prefer goods whose producers reveal their inner workings. This covers details such as production costs, labor, markup, and materials. This trend is common among millennials that are interested in transparency in the retail market as explained by Swartz.
The second trend states that stores that offer exceptional in-store experiences. Retailers that provide a distinctive shopping experience will thrive in the present times. If customers can take a trip to a store instead of shopping online, they cannot get the experience elsewhere. According to Gilliland, an outstanding in-store customer encounter improves their brand loyalty and preference. Retailers have been working toward this by establishing omnichannel shopping encounters. This entails bringing amenities in the online sector to the brick and mortar shops. It is expected that a growing number of retailers invest in similar schemes.
The third trend involves retailers adopting mobile payment solutions. It has been found that the mobile payment trend is likely to gain popularity in the future. It is expected that 70% of the payments in the US are made using mobile phones and are expected to account for $503 billion in retail by 2020. Businesses that fail to adopt mobile payments risk decreased sales. According to Parisi, mobile payments are expected to rise significantly in the coming years. Retailers and brands have been reassured to continue investing in the sector as platforms such as PayPal and Apple Pay are expected to develop in years to come. Retailers across the globe are advised to use the mobile payment system that works for them including third-party alternatives including Apple Pay, customized apps such as Kohl’s Pay and mobile POS networks.
The fourth trend stipulates that smaller stores have become increasingly popular while larger stores have lost their attractiveness. Changing consumer preferences have influenced ‘big box’ retailers to concentrate on smaller-store formats. Retails gains including Ikea, Best Buy and Target have become increasingly attracted to the smaller store format. This has been influenced by the significance of accessibility and convenience. Consumers prefer making a visiting a store that is located close to their home instead of shopping online. Petersen indicates that leading retailers have been focusing on smaller stores as they have been found to be less expensive and meet customers’ needs. Smaller stores have been found to cheaper and appropriate for neighborhoods while responding to customers’ needs. Finding the right size for stores has been found to be a critical aspect for retail in the present times.
The fifth trend is that personalization has become increasingly important for buyers. A study conducted by Accenture reveals that 56 percent of the consumers are likely to buy from a store that knows them by name. While personalization has been around for years, the tactics used by retailers have improved over the years. Companies such as Nike have upgraded their customization to include fitness videos in their products. While Nike is a well-established company, smaller players can benefit from the trend in increasing their sales. Lee and Jung observe that online-based clothing businesses can benefit from different forms of personalization that are aimed at facilitating their customers’ experiences (83).
The sixth trend touches on shipping and asserts that same-day shipping will become increasingly important. While free shipping was optional in the past, it has become a crucial part of retail in the present times. Some consumers are not interested in visiting the physical locations of stores, but they are interested in buying goods. This has made same-day shipping popular, and recent studies have revealed that some customers want their products delivered a few hours after placing an order. Zhou and Jane noted that same-day delivery has gained popularity among online customers as they demand cheap, flexible and fast delivery services (1). A high level of collaboration is proposed among couriers to pave the way for fast delivery.
The seventh trend is that retailers will keep spending on omnichannel. It follows that omnichannel is the standard in the retail sector. The businesses that continue developing their omnichannel strategies will thrive and those that do not are expected to fail. It leads to improved shopping experiences. Domino’s is one of the leading companies that have introduced order placement using Facebook Messenger. On the other hand, Starbucks uses a mobile app that is used by customers to place an order and pay before receiving ordered goods. Retailers also use Snapchat and Instagram to give consumers a holistic shopping experience. Piotrowicz and Richard observe that the increasing use of new technologies including social networks and smart mobile devices have created opportunities for retailers (5). The line between physical and online channels has blurred which has led to the introduction of the omnichannel whose goal is to offer a flawless customer experience. Success in retail will depend on the use of omnichannel activities.
The eighth trend stipulates that retailtainment will shape the future of retail. The concept entails the fusion of entertainment and retail with the goal of giving customers a unique and fun shopping experience. It assumes that buyers are more likely to connect with retailers that take their lifestyle aspects in their stores. iPic Theatres is one of the leading companies that consider the concept as those watching movies get a unique experience and can order drinks and food from their seats. AECOM observes that the creative concept offers an incentive for visitors to make trips to different physical locations that boosts sales.
The ninth trend is that data continues to be an essential element of retail success. This is because retailers continue using data in different activities of a business. Retailers that use data in decision-making perform better than those that do not. As a result, retailers focus on data collection and analysis. JustFab is one of the leading retailers in the fashion industry that make use of data to understand and personalize customer experiences. It can be observed that data analysis takes center stage of activities behind the scenes including merchandising and inventory. Retailers rely on data to make decisions on stock control. Tkatchuk supports the use of data by retailers to get a better understanding of future trends, competitors and their customers.
The tenth trend delves on the increased productivity of specialty stores while compared to department stores. It can be seen that specialty stores are better designed to cater to the needs of consumers. They are stocked with goods that are popular among millennials and offer personalized shopping experiences. Specialty stores also lead to the establishment of better relationships with customers as explained by Friedman (17).
The eleventh trend is that retailers will opt for the use of apps and other services to meet the demands of contemporary shoppers. The number of retail apps is expected to increase significantly as the key players try to maintain competitiveness. Shoppers have been demanding convenient ways of getting their products explaining why retailers depend on third-party options and apps. Newman (2016) notes that mobile apps represent a new form of technology that has led to the rise of mobile shopping that has revolutionized the retail experience.
The final trend is that technology and retail have become increasingly intertwined. In an effort to offer customers with improved retail experiences, retailers have included technology in their operations to grow business. This has been through the establishment of omnichannel shopping encounters and physical stores. Virtual and augmented reality, artificial intelligence and internet use are some of the features that have been used to facilitate the shopping experience. Goldman observes that technology has contributed significantly to the success of retail both in online and brick-and-mortar stores from the point-of-sale, browsing, payments, and supply chain. The trend is expected to continue in years to come.
AECOM. Retailtainment: the convergence of leisure, entertainment, and retail. 25 May 2018. Web. 13 Mar. 2019. https://www.globalrealestateexperts.com/2018/05/retailtainment-the- convergence-of-leisure-entertainment-and-retail/
Friedman, Brian L. “Productivity trends in department stores, 1967-86.” Monthly Lab. Rev. 111 (1988): 17.
Gilliland, Nikki. Seven innovators of the in-store customer experience. 12 Mar. 2019. Web. 13 Mar. 2019. https://econsultancy.com/in-store-customer-experience/
Goldman, Sharon. 8 retail technology predictions for 2017. 9 Jan. 2017. Web. 13 Mar. 2019.
Lee, Eun-Jung, and Jung Kun Park. “Online service personalization for apparel shopping.” Journal of Retailing and Consumer Services 16.2 (2009): 83-91.
Newman, Christopher L., Kathleen Wachter, and Allyn White. “Bricks or clicks? Understanding consumer usage of retail mobile apps.” Journal of Services marketing 32.2 (2018): 211- 222.
Parisi, Danny. Mobile payments volume in US will triple by 2021: Report. 6 Feb. 2017. Web. 13 Mar. 2019. https://www.retaildive.com/ex/mobilecommercedaily/mobile-payments- volume-in-us-will-triple-by-2021-report
Piotrowicz, Wojciech, and Richard Cuthbertson. “Introduction to the special issue information technology in retail: Toward omnichannel retailing.” International Journal of Electronic Commerce 18.4 (2014): 5-16.
Petersen, Chris. Are big box retailers going too small with new store concepts? 24 Sep. 2018. Web. 13 Mar. 2019. https://www.retailwire.com/discussion/are-big-box-retailers-going- too-small-with-new-store-concepts/
Swartz, Leah. How radical transparency is changing the retail market. 25 Jan. 2016. Web. 13 Mar. 2019. https://www.bizjournals.com/bizjournals/how-to/growth- strategies/2016/01/how-radical-transparency-is-changing-the-retail.html
Tkatchuk, Ralph. Why data is more important than ever for retailers. 19 Apr. 2017. Web. 13 Mar. 2019. https://www.digitalcommerce360.com/2017/04/19/data-important-ever- retailers/
Zhou, Wei, and Jane Lin. “An On-Demand Same-Day Delivery Service Using Direct Peer-to- Peer Transshipment Strategies.” Networks and Spatial Economics (2018): 1-35.