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The future of retail
Retail is a booming industry with no indication of slowing down. In fact the global retail industry is worth a staggering $3,000 trillion. In 2015 retailer The Hut Group topped Retail Week’s fastest growing retailers in the UK, with its international expansion and impressive ecommerce channel driving success and growth in the business. Earlier his year our Retail Study showed that retail is becoming more specialised. Fashion retailers for example are on the hunt for a higher calibre of candidates so that they can compete with online retailers. By hiring experts, retailers can add more value and improve a customer’s experience.
According to Ofcom’s Media Use and Attitudes 2015 report, it is estimated that adults spend roughly 20 hours a week online – an enormous increase on the figure from 2005, which was 10 hours a week. Ecommerce in China for example has exploded, with a year-on-year increase of 50% in total revenue. It’s clear then, we’re becoming dependent on the internet for everything we do, which is why the integration of digital in retail strategies is highly important.
Retailers are enhancing the in-store experience with seamless digital features to optimise the way in which consumers shop. A scan and go system in addition to virtual dressing rooms and predictive shopping are just a few examples of how retailers are leveraging the consumer experience with technology. Putting the power into the hands of the consumer, letting them find products at their own pace, scanning their products on a mobile device, paying for them and have it delivered to their home shows how retailers are empowering the customer and blending offline and online.
How will innovation change retail?
The benefits from combining instant gratification with a real experience are great and retailers are continuously adding this to their services. Take for example, the offering of in-store Wi-Fi, with the hope that shoppers will share their experiences or purchases on social media or review websites, or allowing customers to vote or interact with content on tablets at point of sale. Retailers have to make the decision to transform their stores into something more than just a showroom for their products and this interaction, personalisation and instantaneity is an indication of how this is taking form.
It isn’t uncommon for stores to track customers who connect to the Wi-Fi. Now, shoppers can be given tailored and specific offers and notifications as the store tracks their journey. In doing so stores can gather whether you’re a returning customer, where exactly you linger while in store, how you navigate around the space and how long you spend in the store. This data can be used to help benefit retailers optimise store design, merchandising displays, shopper traffic pattern and more. Automated purchasing and predictive shopping is also something that will very likely be on the horizon, where your desired purchase can be schedules for when it is back in stock, or given previous purchases, a summary of potential offerings can be sent to you to consider. All of this information means a store could easily send you a personalised voucher about those shoes you were thinking about 20 minutes ago.
Earlier this year Salmon conducted a survey that revealed that more than half of UK consumers are ready to embrace programmatic commerce within the next two years. Such programming will allow connected devices to make purchases on behalf of the consumers. 49% of UK shoppers reported that digital technology has “made the shopping process faster”, which seems to indicate a readiness for automated purchasing - taking retail into a whole new era.
What is expected, at least as a minimum, is an excellent product. But retailers are finding that they no longer need to treat their retail space as just a point of sale. The emotional connection we have with brands makes them stronger, as they increasingly have to focus less on sales conversion and more on how to convert people into brand ambassadors. The future of retail will mean that these point of sale centres will soon change into places which strike chords with consumers’ emotions. Take one of the Adidas stores in Tokyo, for example, which have rentable lockers and showers – perfect for the end of a run. It’s the combination of store as point of sale and quasi-museum wherein lies the future of retail.
Interested in knowing how the picture of landscape is globally? Read our report, here.