Top 6 Retail Trends to Watch in 2015
2014 was an exciting year in retail. The consumer economy is back, new enabling technologies are blossoming across the retail solution landscape, and content curation across channels is a top priority. Retail business decision-makers increasingly recognized the value of data and insight-driven decisioning; and that decisions rely heavily on information and analytics. Omnichannel and big data became mainstream. Mobile payment and apps that provide cashless capability started to take shape. Loyalty concepts are again part of the marketing conversation due to newly accessible consumer data via apps, social, and mobile. Dynamic tension continues to grow between the CIO and CMO as marketing wants and will get what it needs from agencies and marketing service providers while IT is stuck trying to modify "the old" to fit the needs of "the new."
In 2015, retailers will continue to invest in data-driven marketing and demand-driven retail execution frameworks (including supply, demand, merchandise, and store operations planning) as competitive differentiators.
Here are several other retail areas to watch in 2015.
1. Cross-Channel One-to-One Engagement. Shoppers increasingly are interacting with retailers across channels – from store to web and across social and mobile platforms. In 2014, this became the social shopping norm. An expectation. Table stakes for retailers looking to win with price-sensitive, want-it-now, shoppers.
Retailers looking to differentiate themselves with shoppers will invest in "recognizing" or knowing shoppers across platforms and routes to market and providing individualized, customized messaging and content through each. Very few retailers have achieved this state but the ones that have invested, are seeing reduced cost of inventory, reduced out-of-stocks, and increased ability to forecast, target and promote products to specific consumer segments.
A top priority for retailers will be to connect the dots – break down internal organizational silos (e.g. across company-owned brands, across retail store ops/merchandising/marketing/omnichannel/digital/outlet teams) limiting cross-channel shopper engagement – and creating a comprehensive customer profile and thus, relevant marketing and engagement messages. Leading retailers are also fast adopting advanced analytic strategies and bringing on required resources to support these strategies (more on this later).
2. Content-Rich Experiences. Content sells the product as much as look, fit, and feel. Savvy retailers are using multimedia content to make the shopping experience more engaging. Retailers recognize that shoppers want to be entertained and informed as they browse the web (or the store) and make purchase decisions.
Content-rich experiences extend beyond the web to the store. In 2015, retailers will continue to find new ways to differentiate the in-store shopping experience from the one shoppers find online – testing, trialing, and sampling new ways of engaging with shoppers in-store thereby keeping the store relevant in the retail landscape.
Marketers have been challenged to produce content for more channels (social, websites, search, newsletters, paid, owned, etc.), and have been challenged to make that content meaningful and informative. Content will continue to be a central directive for retail marketers in 2015.
Finally, top-end retailers will offer increasingly personalized and exclusive in-store only events and services; and invest in guest experience aimed at bringing customers to stores and keeping them there (driving incremental purchases).
3. Big Data "Buzz" Disappears, Analytics Shines Bright. While retailers are at times, slow to adopt data-enabled insights and analytics best practices, a small subset of global retailers are heavily investing in data scientists, data and analytic discovery platforms, and new analytic tools that go well beyond traditional vertical and horizontal views of the business. New analytics, insights, and resulting decisions will fuel the "potential" for growth while maximizing existing investments – and allow for faster business decisions based on new performance metrics.
From a customer experience perspective, in a world of increasing choice, algorithms curate and drive a unique experience focused on convenience for customers. Built in feedback loops, ease of access and user experience are at the heart of marketing strategy. Retail marketers must consider how to curate better experiences for consumers. That are data-driven. That's what drives underlying consumer and shopper decisions in retail.
4. Mobility No Longer The E-xception. In 2015, mobile payment capabilities will grow exponentially as retailers look to deploy apps with capability similar to Starbucks (pay by scan – while developing a loyal following willing to share consumer data) and with the growing adoption of Apple Pay. While cash is still accepted at many retailers, cashless check-out will be an evolving trend (airlines are already training customers for this eventuality). Note that most retailers will say that cash can never go away completely (due to consumers not having credit cards, bank accounts, or smartphones) but cashless will grow substantially with the capability in 2015.
Financial institutions, payment networks, mobile network operators, merchants, and mobile technology providers all have a vested interest in the deployment of a profitable mobile wallet solution and are battling for their own piece of the action. From a loyalty perspective, expect an increase in personalized offers, services, and rewards (vs. traditional points programs).
5. Digital Marketing Spend Blast-Off. From an engagement perspective, according to a recent survey, over 80% of marketers are doing some sort of personalization, but only 19% are doing it in real time. Most are missing out on context.
Digital channels represent 25% of today's total marketing budgets, and with the adoption of smartphones, digital commerce, and growth of social networks, digital marketing spend is expected to grow to one-third by 2017. The rise of digital channels comes with its own challenges as they can be difficult to integrate with existing systems in place within the retailer's ecosystem (due to inflexible, costly-to-change back-end IT systems). Integration is essential to communicating across departments, and focusing the business in support of strategy, be it customer centricity or operational. In 2015, full integration of new tools with existing systems will be the top priority when evaluating new technology, competing with resources focused on privacy and data security.
Marketers are increasingly aware of inconsistencies between their own marketing channels (emails, websites) and paid channels (display, mobile and social advertising), and they are grappling with how to bring this all together. Retail marketers are realizing that they need a more holistic approach to interaction management. Using customer data and integrated approaches to individuals drives much better results. Ad campaigns driven by customer data have high click through rates and nearly 500% return on ad spend.
6. Tech Explosion. There are several technologies that are sure to change the face of retail this year, some of these include:
One last thought. NRF and Shop.Org…Relevant and Growing.
NRF continues to grow as retailers look to take advantage of the best practices found in meeting and collaborating with other retail leaders while learning about the best and brightest tech offerings. Retail technology solution providers and consultants continue to spend big bucks to be at the largest and best-attended global retail events as in many cases, one or two big customer opportunities more than pay for the price of admission.
Shop.Org has grown substantially with the continued fast-growth of social, mobile, and other interactive shopper engagement technologies supporting in-store and online technologies. Shop.org looks to be following the NRF formula for format and trade show and even feels like NRF, just in another city. If shop.org wants to truly establish "THE" digital environment for retailers, their trading partners, suppliers and partners, they should look to bring in elements of "SXSW meets TED Talks" to create an experience different from that of NRF. Otherwise, it's just another NRF – give vendors, partners, and retailers a reason to invest in both (vs. choosing one over another). Perhaps it's just my creative imagineering of what could be with shop.org being something other than the digital/ecommerce version of NRF. Imagine the possibilities!
Game on!
Justin Honaman is managing partner for CPG and Retail Industry Consulting North America at Teradata, a provider of enterprise big data analytics and services that include data warehousing, data-driven marketing, BI and CRM.
In 2015, retailers will continue to invest in data-driven marketing and demand-driven retail execution frameworks (including supply, demand, merchandise, and store operations planning) as competitive differentiators.
Here are several other retail areas to watch in 2015.
1. Cross-Channel One-to-One Engagement. Shoppers increasingly are interacting with retailers across channels – from store to web and across social and mobile platforms. In 2014, this became the social shopping norm. An expectation. Table stakes for retailers looking to win with price-sensitive, want-it-now, shoppers.
Retailers looking to differentiate themselves with shoppers will invest in "recognizing" or knowing shoppers across platforms and routes to market and providing individualized, customized messaging and content through each. Very few retailers have achieved this state but the ones that have invested, are seeing reduced cost of inventory, reduced out-of-stocks, and increased ability to forecast, target and promote products to specific consumer segments.
A top priority for retailers will be to connect the dots – break down internal organizational silos (e.g. across company-owned brands, across retail store ops/merchandising/marketing/omnichannel/digital/outlet teams) limiting cross-channel shopper engagement – and creating a comprehensive customer profile and thus, relevant marketing and engagement messages. Leading retailers are also fast adopting advanced analytic strategies and bringing on required resources to support these strategies (more on this later).
2. Content-Rich Experiences. Content sells the product as much as look, fit, and feel. Savvy retailers are using multimedia content to make the shopping experience more engaging. Retailers recognize that shoppers want to be entertained and informed as they browse the web (or the store) and make purchase decisions.
Content-rich experiences extend beyond the web to the store. In 2015, retailers will continue to find new ways to differentiate the in-store shopping experience from the one shoppers find online – testing, trialing, and sampling new ways of engaging with shoppers in-store thereby keeping the store relevant in the retail landscape.
Marketers have been challenged to produce content for more channels (social, websites, search, newsletters, paid, owned, etc.), and have been challenged to make that content meaningful and informative. Content will continue to be a central directive for retail marketers in 2015.
Finally, top-end retailers will offer increasingly personalized and exclusive in-store only events and services; and invest in guest experience aimed at bringing customers to stores and keeping them there (driving incremental purchases).
3. Big Data "Buzz" Disappears, Analytics Shines Bright. While retailers are at times, slow to adopt data-enabled insights and analytics best practices, a small subset of global retailers are heavily investing in data scientists, data and analytic discovery platforms, and new analytic tools that go well beyond traditional vertical and horizontal views of the business. New analytics, insights, and resulting decisions will fuel the "potential" for growth while maximizing existing investments – and allow for faster business decisions based on new performance metrics.
From a customer experience perspective, in a world of increasing choice, algorithms curate and drive a unique experience focused on convenience for customers. Built in feedback loops, ease of access and user experience are at the heart of marketing strategy. Retail marketers must consider how to curate better experiences for consumers. That are data-driven. That's what drives underlying consumer and shopper decisions in retail.
4. Mobility No Longer The E-xception. In 2015, mobile payment capabilities will grow exponentially as retailers look to deploy apps with capability similar to Starbucks (pay by scan – while developing a loyal following willing to share consumer data) and with the growing adoption of Apple Pay. While cash is still accepted at many retailers, cashless check-out will be an evolving trend (airlines are already training customers for this eventuality). Note that most retailers will say that cash can never go away completely (due to consumers not having credit cards, bank accounts, or smartphones) but cashless will grow substantially with the capability in 2015.
Financial institutions, payment networks, mobile network operators, merchants, and mobile technology providers all have a vested interest in the deployment of a profitable mobile wallet solution and are battling for their own piece of the action. From a loyalty perspective, expect an increase in personalized offers, services, and rewards (vs. traditional points programs).
5. Digital Marketing Spend Blast-Off. From an engagement perspective, according to a recent survey, over 80% of marketers are doing some sort of personalization, but only 19% are doing it in real time. Most are missing out on context.
Digital channels represent 25% of today's total marketing budgets, and with the adoption of smartphones, digital commerce, and growth of social networks, digital marketing spend is expected to grow to one-third by 2017. The rise of digital channels comes with its own challenges as they can be difficult to integrate with existing systems in place within the retailer's ecosystem (due to inflexible, costly-to-change back-end IT systems). Integration is essential to communicating across departments, and focusing the business in support of strategy, be it customer centricity or operational. In 2015, full integration of new tools with existing systems will be the top priority when evaluating new technology, competing with resources focused on privacy and data security.
Marketers are increasingly aware of inconsistencies between their own marketing channels (emails, websites) and paid channels (display, mobile and social advertising), and they are grappling with how to bring this all together. Retail marketers are realizing that they need a more holistic approach to interaction management. Using customer data and integrated approaches to individuals drives much better results. Ad campaigns driven by customer data have high click through rates and nearly 500% return on ad spend.
6. Tech Explosion. There are several technologies that are sure to change the face of retail this year, some of these include:
- POS evolution will be top priority for a number of retailers in 2015. The inability of retailers to provide a personalized customer experience is what makes the flexibility of new POS systems attractive. New POS systems allow retailers to diminish lines and reduce customer service wait times. Newer retail operations will center POS investments on cloud-based POS systems vs. traditional inflexible, resource-heavy solutions.
- Wearables (fitness monitors, watches, glasses, etc.) are expected to double in market size in 2015 according to a recent analyst report. The question for retailers will be how they can leverage wearables to market and/or serve customers.
- iBeacons will continue to be deployed across retail outlets providing a new source of data to retailers already short on analytic resources. iBeacons allow for personalized, micro-location-based notifications and alerts. This technology allows for accurate placement of shoppers within a retail outlet and can provide store employees with information on the shopper and their digital metrics – an opportunity for the store to present "surprise and delight" offerings.
- Augmented Reality was a hot topic of discussion in 2014 but showed up in few retail locations – more often showing up in vendor showcases at NRF, shop.org, and other major retail shows. Expect retailers to continue to trial the technology in store in 2015. A-R is excellent for creating an interactive product experience and for providing additional detail on products, better navigate a store, and more.
One last thought. NRF and Shop.Org…Relevant and Growing.
NRF continues to grow as retailers look to take advantage of the best practices found in meeting and collaborating with other retail leaders while learning about the best and brightest tech offerings. Retail technology solution providers and consultants continue to spend big bucks to be at the largest and best-attended global retail events as in many cases, one or two big customer opportunities more than pay for the price of admission.
Shop.Org has grown substantially with the continued fast-growth of social, mobile, and other interactive shopper engagement technologies supporting in-store and online technologies. Shop.org looks to be following the NRF formula for format and trade show and even feels like NRF, just in another city. If shop.org wants to truly establish "THE" digital environment for retailers, their trading partners, suppliers and partners, they should look to bring in elements of "SXSW meets TED Talks" to create an experience different from that of NRF. Otherwise, it's just another NRF – give vendors, partners, and retailers a reason to invest in both (vs. choosing one over another). Perhaps it's just my creative imagineering of what could be with shop.org being something other than the digital/ecommerce version of NRF. Imagine the possibilities!
Game on!
Justin Honaman is managing partner for CPG and Retail Industry Consulting North America at Teradata, a provider of enterprise big data analytics and services that include data warehousing, data-driven marketing, BI and CRM.