Craig Smith, VP of Solutions and Customer Success at Amplience, a leading digital content provider, takes a look at the consumer trends influencing the industry landscape this year.Understanding and adapting to consumer trends within the retail industry can help a business to flourish. In this feature I take a look at five key movements set to dominate 2017, from social media shopping to the rise and rise of personalisation. But first, let’s begin with the mass move to mobile.
New mobile payment methods took the retail sector by storm in 2016, with Apple Pay allowing consumers to pay for their goods with just a touch of a finger. Through the holiday shopping season and into next year, we’ll see shoppers shift from simply browsing, to completing the entire shopping journey on their mobile devices. The attention span of shoppers is dwindling so people are increasingly turning to mobile shopping for its convenience and speed. Currently around 50 per cent of shopping is done on mobile and this is only set to rise in 2017 as people are finding fewer reasons to shop in physical stores.
Many retailers are struggling to adapt to this new shopping habit and aren’t creating engaging apps or content; this must be a focus in the coming months in order to keep at the front of shoppers’ minds. Expect to see fashion retailers upping the ante and transforming their mobile apps into a rich and enticing experience rather than a convenient ‘nice to have’. Currently, 87 per cent of mobile owners are using apps but only 3 per cent of these are retail apps. The app market is a crowded space but there is a great opportunity in the year ahead for retailers to embrace the appetite for mobile.
Social networks, meanwhile, have taken ‘fast fashion’ to the next level. If a celebrity is spotted wearing a covetable item on social media, fashion retailers must design, source and get it up on their site within weeks in order to stay relevant. This trend is only set to continue in 2017 as the likes of Facebook and Instagram experiment with new ways to get shoppers clicking the buy button. Retailers need to become more agile by streamlining their infrastructure in order to keep up with the demands of today’s fast fashion. By rethinking their approach to content production, retailers can keep up with the influx of content and stay fresh, up-to-date and relevant.
Charlotte Tilbury is proof of the power social media holds over today’s retail landscape. Born out of her YouTube make-up tutorials, she grew her brand through Twitter and blogging, gaining a loyal following in the process. Today, Charlotte Tilbury is the second most popular brand in the Selfridges Group, overtaking traditional brands that have been frontrunners for years. Other retailers should follow suit and find their audiences in the places where they look for inspiration online in order to capture their hearts and wallets.
“Marketplaces are conquering the retail sector at an alarming rate. The juggernauts Amazon, Alibaba and eBay are posing a threat to mass merchants, and the bad news for them is that marketplaces are here to stay.”
The next 12 months may also see a decline in department stores. Marketplaces are conquering the retail sector at an alarming rate. The juggernauts Amazon, Alibaba and eBay are posing a threat to mass merchants, and the bad news for them is that marketplaces are here to stay. It is anticipated that global marketplaces will own 39 per cent of the online retail market in 2020. Once their key differentiator, department stores are no longer able to compete on range, and many have forgotten the art of curating and bespoke service. If department stores want to re-establish themselves, they should think less about price and volume, and more about brand and customer engagement. Selfridges is a prime example of a department store fully embracing cutting-edge retail technology. In 2016, it debuted a shoppable app including a ‘shop-by-Instagram’ functionality, using self-generated content as a means to drive sales.
In 2017 we’re likely to see other stores following Selfridges’ lead in providing variety in combination with a tailored experience. Missguided is an example of an online retailer fusing the online and instore experience to create an immersive shopping experience. Its newly opened physical store encourages shoppers to Instagram and Snapchat their experience, placing reminders and hashtags throughout the shop floor to create a social buzz.
Personalisation, meanwhile, is widely recognised by retailers as a key driver of sales, yet many are still failing to execute effective strategies. Previously, this was understandable given the fine line between bespoke deals and an overbearing retailer bombarding the shopper with too much information. Yet in 2017, with the tools available to retailers, there should be a dramatic departure from shooting blind.
Aside from the ethics of personalisation, the cost of content production is spiralling. With the number of channels to communicate with customers growing, serving highly relevant content becomes much harder. To top it off, production costs are escalating in line with the need to cater to mobile and multiple markets, making it harder for retailers to be agile. In 2017 and the coming years retailers must focus on streamlining their infrastructure to allow for smooth-running omnichannel personalisation.
As the Internet of Things (IoT) continues to creep into our everyday lives, retailers have more opportunities to provide customers with informed recommendations by gathering more information from a range of devices. We are going to see fridges telling consumers when they are out of milk and existing smart home technology, such as the Amazon Dash Button, becoming more advanced and widely used. It’s time retailers fully embrace the opportunities they have to provide customers with a bespoke experience and engage with them to deliver the best messages at times when the customer is most receptive.
Last but certainly not least, what consumers are looking for in a shopping journey is convenience. Retailers shouldn’t lose sight of this, but should instead make this a priority for customer engagement strategies in 2017. Same-day delivery has become the norm thanks to Amazon Prime, yet promises of delivery within the hour come with a hefty price and demand a highly developed infrastructure. Many brands are failing to profit on their products by simply trying to replicate Amazon’s promise.
What customers really want is a slick and seamless checkout regardless of the device. Retailers need to work on making the online experience, from browsing right down to the delivery, as smooth as an in-store purchase would be – without the queuing, of course. Customers have high expectations, and this is only set to grow. Retailers must step up in order to avoid basket abandonment at the final hurdle.
In the coming year, we’ll see retailers turning to methods that smooth the purchase process and draw in customers without bending over backwards to slash delivery times. Whilst Apple Pay has paved the way for online payments, the checkout experience is still holding back conversion on mobile devices. In 2017 retailers should spend less energy on elaborate fads and hone in on what the shopper really wants.
Craig Smith is VP of Solutions and Customer Success at Amplience, a leading digital content provider that works with retailers such as Saks Fifth Avenue, Tumi, JD, Mulberry, Halfords, Shop Direct and Panasonic to manage digital content and enhance the online customer experience.
For more information, visit www.amplience.com.