2017: Top Six Trends to Look Out for in Retail
As we ring in the New Year, below are top six retailing trends to watch out for in 2017.
Pursuit of omnichannel proficiency: The global retailing landscape is evolving quickly with the rise of omnichannel retailing. Omnichannel retailing is a customer-centric, channel-agnostic approach to retailing through which retailers provide seamless shopping experiences across all of their physical and digital channels. Shoppers increasingly value convenience when shopping and omnichannel capabilities allow them to seamlessly switch from one channel to another. By the end of 2016, the vast majority of retailers were struggling to be omnichannel. The most common challenges that retailers face include tracking sales, inventory planning, overcoming organisational barriers and legacy technology, last mile delivery, providing secure methods of payment, and appropriately adapting their physical stores. Retailers will continue their quest to achieve omnichannel proficiency in 2017.
Evolution of convenience: The ways in which retailers are delivering convenience is evolving as demand for convenient retail offerings continue. Drivers of convenience include global urbanization, growth of smaller households, ageing population, and hyperconnectivity. Convenience in retailing now extends beyond what was previously offered by convenience formats. Retailers from various channels in retailing are adapting to the demands of the modern and digital world to offer convenience, leading to channel blurring as well as advances in various online commerce options. Meanwhile, existing convenience stores around the world are responding by modernising and evolving to become more than a place to buy a quick snack and beverage and aiming to become a key part of the daily activities of shoppers. Retailers will continue to innovate to offer added convenience to shoppers’ daily lives.
Conversational commerce: Chatbots and voice-activated assistants that are designed to work with existing digital devices to perform tasks are on the rise. Although their impact on retailing landscape is still in its nascent stage, they are likely to create new opportunities for retailers in the near future. 2016 was the year of chatbots. Facebook launched chatbots for Messenger and Apple’s iOS 10 gave iMessage an app store in which developers can add chatbots. Google launched its new messaging service, called Allo. Allo uses artificial intelligence, like the chatbots, to respond to a user’s questions. Amazon sold a record-setting number of its Echo devices in 2016, and others such as Google and Lenovo are introducing their own voice-activated assistants. As chatbots and voice-activated assistants’ existing features are honed and new ones are added, more retailers and manufacturers will prioritize adapting their businesses to be compatible with these products.
Marketplaces continue to experience growth: Marketplaces continues to experience growth globally, playing a major role in the future of both small and large businesses online. Online retailers that host third party merchants are the leaders of internet retailing and are continuing to gain share. Third party marketplaces enable all types of retailers and tech companies to take advantage of the growing e-commerce and m-commerce markets through existing infrastructure that is already trusted by shoppers. Despite challenges that marketplaces face like the fight against counterfeit goods and overall quality control, they are expected to continue becoming a larger portion of all online sales. In particular, along with the growth of m-commerce, mobile-first marketplaces are quickly gaining traction. More and more marketplaces, particularly those in the fashion category, are focusing exclusively on mobile.
Emerging commerce platforms: There are various emerging commerce platforms that can potentially have a significant impact on the future of retailing, and retailers will strategize appropriately to participate in this market. Leaders in this space are aiming to differentiate themselves by being present where the customers already are through IoT devices, introducing new ways to access their brands and make transactions. Emerging platforms to keep an eye out in 2017 include smart appliances, virtual reality (VR), augmented reality (AR) and connected wearables (such as smart watches) and cars.
Mobile commerce: In 2016, mobile commerce accounted for US$512 billion in sales (approximately 44% of online retailing). The figure is expected to nearly double by 2021 to US$1.3 trillion in sales (approximately 56% of online retailing). In addition to retailers making many of their promotions online and on mobile, and making some of these promotions only available through mobile apps, there are larger factors at play driving mobile sales. Smart phones and tablets’ penetration rates continue to rise, smartphones are becoming bigger and easier to use, and retailers and technology companies are investing to improve the mobile shopping experience, such as launching in-app payments. Additionally, with smartphones being the sole way of access to the internet for many households, especially in low income households, mobile commerce is positioned to see continued growth in 2017 and beyond.