OVERVIEW
Learn what factors are changing shopping trips to experiences.
What are the 4 drivers propelling change in retail?
See what trends are affecting the industry the most.
How to recognize customer needs and respond by pivoting strategies.
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By Ryan Taylor, Retail Industry Expert
One way to think of this new era of omnichannel retailing is a paradigm shift in what exactly retailers are selling: it is no longer just products that consumers want, but experiences that make for memorable outings. Many successful retailers have previously done this in low-tech ways (e.g., one chain of outdoor lifestyle stores frequently has aquariums and wildlife displays), but today's technologies allow for attractions that can also collect critical data on consumers aimed at delivering personalized experiences mimicking the greatest strengths of eCommerce. This is a critical form of digital evolution in a post-lockdown economy.
Key takeaways.
- The retail industry has seen more change in the last few years than in the last few decades in response to consumer demands. Shoppers are now buying not just goods, but experiences.
- These technologies have been leveraged by forward-thinking storefronts to begin providing customers with personalization that mimics their eCommerce shopping experiences.
- While there are challenges inherent to these digital evolutions, the ongoing personalization and connectivity that comes with omnichannel retail consumer engagement is necessary to continued growth..
The retail industry rapidly changes every day, and it’s not slowing down any time soon.
Every new development we see in retail–in-app purchasing, self-checkouts, or highly personalized conversations with chatbots–is a result of consumer demand.
More than ever, consumers are not satisfied with just a traditional storefront and seek a more ‘frictionless’ shopping experience. They want an entire contextual customer experience with increased convenience, customization, and of course, value for their dollar.
To keep up with consumer satisfaction trends, retailers must keep an open mind as they strategize, make quick decisions, focus on consumer desires, and master the tools they need to stay ahead of the game.
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Retailers striving to incorporate consumer friendly technology can support this strategy with using a dependable 5G system with strong connectivity, inventory tracking, and safety and security. What are these other essential tools, and how can retailers use them to stay in touch with consumer demands?
RETAIL’S UNAVOIDABLE SHIFT.
You might notice, especially in the holiday season, that a trip to your favorite store is no longer just a trip to the store. It’s an experience with aesthetic displays, personalized ads, and discounts tailored to your preferences, a place where you can get everything as quickly and conveniently as possible.
It is said often enough to sound trite, but it holds true: speed, convenience, and product assortment are customers’ ultimate shopping priority.
After all, why wait in line when you can go to a self-checkout kiosk and not have to talk to anyone?
Don’t feel like trying on clothes in a fitting room? Use 3D to virtually try it on in-app. No time to shop? Make an order ahead of time for curbside pick-up.
Shoppers are no longer just purchasing goods. They’re buying an experience, personalized satisfaction, and ultimate convenience.
There are several factors pushing this shift, including the growth of the digital economy, customer expectations, and rising inflation.
DRIVER’S AFFECTING RETAIL TRENDS.
Understanding drivers propelling the retail change is critical to staying in check with trends. If consumers don’t feel like their store speaks to their unique needs and interests, they’ll quickly shop elsewhere.
Macroeconomic Environment
Factors like rising inflation, a possible looming recession, and budget tightening all impact retail changes and how customers spend their money.
IDC names customer expectations, supply chain issues, and data and privacy as major impacts on retail. Retailers’ success is often based on knowing who their customers are, including demographics like location, disposable income levels, and specific product needs.
Customer Expectations
Consumer demands continue to become more specific, non-negotiable, and immediate. Shoppers want a hassle-free, customizable experience with that aforementioned emphasis on speed, convenience, and appealing product assortment. If a store can’t provide this experience, customers will find one that can.
Supply Chain Issues
Since COVID restrictions, supply chains have experienced disruptions from sourcing streams, geopolitical tensions, and staff shortages. Many of these shortages come from challenges in hiring and retaining talents, high turnover, and an overall skill shortage.
Data and Privacy
With more personalized shopping comes a greater responsibility in handling customer data. Increased regulatory protection and attention to data sensitivity are large drivers of retail trends and demands.
All of these drivers influence the retail trends we see today, and it’s imperative that retailers understand those trends in order to best serve their customers.
KEEPING UP WITH RETAIL TRENDS.
IDC names the below trends as those most affecting the retail industry. In highlighting their impacts, challenges, and opportunities for growth, retailers can best serve customers throughout their shopping journeys.
Contextual Customer Experience
Ecommerce and omnichannel shopping have infiltrated the retail space and will likely persist in its digital future. Consumers increasingly demand frictionless, personalized shopping journeys, and retailers need to ensure consistency in their interactions with shoppers across all channels.
Think in-app ordering, pop-up kiosks, curbside pickup, and virtual fitting rooms. A contextual customer experience means that products are available at the right price, at the right place, and at the right time.
Online-Offline Integration
Shoppers continue to expect omnichannel retailing experiences like buying items online and picking up in store (BOPIS). Retailers respond by optimizing these capabilities and delivering those omnichannel customer journeys.
Smart Supply Chain
Supply chain capabilities must become more responsive to customer expectations. This could mean improving data accessibility in all steps of the supply chain process, increasing cross-channel visibility, and offering employee training tools to add value to customer experience throughout the shopping journey.
Automation
Retailers are expanding automation in physical store facilities to remove frictions and provide a seamless omnichannel customer journey. Automation within retail operations, especially for physical stores and supply chains, is essential for a seamless and convenient customer journey.
Sustainability
Sustainability and social responsibility gain traction in retailers' strategies as pressure from stakeholders for sustainable operations build. Pressure also comes from regulators, investors, and business partners, so it’s imperative that retailers don’t ignore the sustainability push.
Employee Empowerment
The role of the store associate becomes increasingly important in defining the success of omnichannel customer journeys and generating long-term customer loyalty. Without skillful, competent employees, the omnichannel retail experience is sure to experience some friction along the way.
CHALLENGES.
While being aware of these trends is essential to keeping up with consumer demands, they don’t come without challenges.
These challenges include forever changing customer preferences, data complexity with silos and consent, lack of workforce numbers, and the overall cost of the frictionless omnichannel experience.
Visibility and understanding of customer needs is an ongoing issue. With individual consumer preferences constantly changing, retailers can struggle to keep a pulse on shoppers’ desires and demands.
While retailers are able to view overall trends, understanding individual shopping preferences is more challenging in a complex omnichannel retail journey. As retail operations become more complex, visibility and transparency will become increasingly important.
MANAGING CHALLENGES AND NONSTOP CHANGING TRENDS.
Despite these challenges, retail will continue to thrive. Recognizing these pain points, retailers must respond quickly when their strategies need to pivot to meet consumer demands.
To avoid falling behind in the ever-changing retail world, brands must partner with a reliable provider. If they don’t, their efforts will easily be consumed by the challenges that accompany these evolving trends.
About the author:
Ryan Taylor is a professor of retail with over three decades of study under his belt. Formerly Senior Director of Nike Stores North America, his expertise improved team performance and, in turn, improved the customer experience. A ‘big picture’ person, Ryan’s experience allowed him to enhance retail operations at more than 250 stores across the country via coordinated plans that incorporated sales, marketing, brand loyalty, customer service, and team training. He is one of RETHINK Retail’s Top 100 Influencers of 2023, a recognized Industry Thought Leader, and a Retail Technology Innovation Strategist.
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