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I had the pleasure of attending RISE (Retail Innovation & Shopper Expertise Symposium) on 16 January 2016. I listened to experts talk about single households as an untapped customer segment, how to address current issues with the retail industry and under hyped future trends in retailing.
As of 2014, the number of households headed by a single person slightly edged out the number of households headed by multiple people according to the US Census Bureau. This changed in demographics prompted research from TPN Retail, along with C&R Research, to better understand this consumer segment.
There are four main drivers of the trend are: the recession (which has delayed household formation), urbanization, more women in the workforce and the removal of stigma around “uncoupling.” TPN Retail believes that this will be a long term trend with one in four Millennials and Generation Zers not getting married in the future.
The research found that this consumer segment accounts for over US$500 billion in annual spending. It also revealed that singles shopped differently. They tend to shop without lists and rely on inspiration in the store. The segment is also 21% more likely to buy for themselves than other groups and to shop to celebrate their personal milestones, such as promotion or buying a house.
TPN Retail had several recommendations to tap into this neglected consumer segment. Retailers should use technology to make shopping easier with personalized offers, real time inspirational messaging and mobile payment solutions. Another suggestion is to be creative with promotion calendars to encourage the celebration of self and non-traditional holidays.
Bricks and mortar retailers have been slow to adapt in the age of the connected consumer. These retailers still have an organizational and incentive structure that favours the bricks and mortars part of the business. While legacy technology could be a barrier as well, the cost of technology has declined significantly and shouldn’t be an excuse to hide behind.
Lori Tauber Marcus, founder of Courtyard Connections and Kim Feil, CEO of biz hive, recommend that retailers need to view the ecommerce and bricks and mortar retail units as one—not as competitors. More importantly, ecommerce needs to be seen a mobile first.
To help with decisions in this new world view, retailers need to break down all of the internal siloes when it comes to organizational structure, capital expenditure and information. All of the resources must be pooled together to solve the customer’s problems, not according to the desires of a business unit.
The conference was filled with talk of trends, but there a few that stood out to me as important yet under hyped.
Joe Jensen, VP and General Manager of Retail Solutions at Intel, stated that the costs of sensory technology and data collection are going to zero. The implications for the customer experience and for backend technology are significant in the long term. He gave the example of being able to detect who is walking into the store and personalizing that person’s experience.
Personalization is also important to Danielle Yacobovsky, co-founder of BaubleBar. Her company is working diligently to personalize marketing and product assortment for their customers, because she believes that is the future of retail.
On the backend, Ruchika Kumar, co-founder of skuIQ, believes that there is an opportunity for real time inventory management and getting to the point of on-demand inventory. There’s enough information available now (and the ability to collect it) to embrace better inventory management based on what consumers are currently buying as opposed to manufacturing based on an arbitrary production calendar.