Retail Trends and Predictions 2014

Vend's 12 predictions for retail in 2014.

Sometimes in the busy world of retail, it's hard to know everything that's happening now – let alone what's coming next! Well, we're here to help with that. We’ve prepared this handy guide, and made sure it is bite-sized, all killer no filler, so you can read it between the accounts and stock-orders.

Sprinkled throughout are some key comments gathered by Retail Touch Points, from their excellent 2014 Retail Technology Preview. We work with Retail Touch Points when we want to analyze the smallest consumer behavior, as well as the largest global trends.

Behold, the near future!

Vend dictionary retail shops

1. Omnichannel retailing will be the norm

Retailers will continue to realize that they need to connect with users on multiple channels and touch points simultaneously or even interchangeably. In 2014, more retailers will give customers the ability to interact and complete transactions on their own terms. In other words, if a customer wants to view an item online, purchase it using their phone, and return it by dropping by the store, they can do so in a smooth and seamless way.

UK fashion retailer Oasis is doing a very good job in omnichannel retailing. The merchant gives customers the flexibility to browse inside the store, then purchase online and vice versa. Shoppers can have their products shipped, or they can choose to pick it up. Additionally, the staff members at Oasis each have their own iPad which they use not just to process payments, but to assist shoppers when checking sizes, styles and availability. If a particular item isn’t available in the store, the staff can use their iPads to help shoppers place orders online.


2. The mobile wallet will continue to rise

Cash and credit cards won’t be things of the past any time soon, but mobile will definitely get a huge chunk of the payments pie in the coming year. According to Forrester Research, mobile payments will amount to $90 billion in the coming years. And we anticipate that in 2014, retailers will be taking big strides towards that number by adopting solutions such as PayPal, Google Wallet, Square Wallet, Dwolla, and more.

Take Pizza Express, for example. The restaurant developed a mobile application that allows diners to view the menu, book a table, and more importantly, pay bills via PayPal. That way, if the user forgets their wallet, or is in a hurry to leave, they can simply settle their bill with just a few taps.


3. Shoppers will get more personalized in-store experiences

One-size-fits all marketing just won’t cut it anymore, which is why retailers will start implementing solutions to personalize each customer’s experience.

While ecommerce sites have been doing it for years through tailored landing pages, offers, and recommendations, a lot of brick and mortar stores will also get in on the fun next year. Thanks to Bluetooth Low Energy (BLE), a technology that lets Bluetooth 4.0 devices such as PayPal Beacon, Estimote, and iBeacon communicate with smartphones, retailers will be able to send tailored notifications to each shopper’s device, depending on where they are in the store. Major League Baseball effectively demonstrated this technology when it tested Apple’s iBeacon at the Citi Field stadium in New York.

Users who have MLB’s app will be able to get customized messages, depending on where they are in the stadium. For example, when they arrive at the gates, the app can give them directions towards their seats. If they’re near a particular shop or booth (say a hotdog stand) they can get store-specific deals. The app can also send tailored offers, depending on whether someone is a first-time visitor or a long-time fan.

Daniel Druker - Chief Marketing Officer - MyBuys

@DDruker

"The idea of customer-centric marketing cuts across the major technology trends for 2014. It’s really about using technology to return to the early days of retail — when every shopkeeper knew each and every one of his or her customers as individuals — but at scale." Read more from Daniel at Retail TouchPoints 2014 Technology Preview.

www.mybuys.com

4. Technology will be even more integrated in brick and mortar stores

2014 will be the year when stores say goodbye to boring, antiquated layouts. It has started to dawn on retailers that if they want to keep people in their stores, they need to make their locations interactive and engaging.

This can be done in a number of ways, the most basic of which is by using in-store mobile devices. Tablets and smartphones are versatile and can be used in several ways, including taking payments, demonstrating products, offering more information, and encouraging social sharing. Here are a few examples that demonstrate the successful use of in-store mobile devices. (Expect to see a lot more of these in 2014):

Apple Store – Apple has armed all of its associates with iPhones, so they can assist customers and process payments anywhere in the store. The practice shortens lines and opens up space. Additionally, it lets associates interact with customers more freely.

Burberry – The luxury retailer once invited customers into its stores to live-stream the London Fashion week. Following the event, associates distributed iPads to customers so they can browse and purchase the items that they just saw.

Make Up For Ever – The cosmetics company put iPads in some of its stores to let shoppers browse products and virtually try various make-up combinations by uploading their own photos.

In addition to tablets, we anticipate that major retailers will implement immersive experiences with the use of large, interactive displays that are meant to fully engross customers to the point where they kind of forget that they’re inside a store. To the customer, the experience is interactive, engaging, and powerful.

Examples of retailers already doing this include the Nike Fuel Station in London which has huge LCD displays that mirror shoppers as they move through the store. Similarly, Gucci has recently set up five columns of super high resolution displays that enable shoppers to browse various products using hand gestures.


5. The number of mobile businesses will increase

Thanks to mobile POS systems and other cloud applications, people can now do business from anywhere. This has paved the way for on-the-go stores such as food trucks and pop-up stores.

In 2014, as mobile technology continues to advance, we expect mobile businesses to evolve with it. For instance, aside from food trucks, expect to see more fashion trucks, flower trucks, and even hair salon trucks.

Pop-up stores, usually reserved for apparel retailers, will diversify as well. Amazon for instance, recently set-up its own pop up store in a San Francisco mall, while Google has its own Chromebook pop-up stores in various airports.

Learn more about Vend and PayPal make mobile retail awesome in the States.


6. Retailers will reinvent loyalty programs

A 2013 study by Maritz Loyalty Report found that “consumers on average are enrolled in 7.4 loyalty programs. However, each year 53 percent of these members stop participating in at least one loyalty program a year, citing irrelevant reward offerings (68 percent) and slow reward accumulation (50 percent) as top barriers.”.

That being said, we anticipate retailers to beef up their loyalty efforts in 2014. Loyalty cards are on their way out and will be replaced by customized rewards that incorporate social information, shopping behavior, and more.

Office Depot for instance, started implementing a program that gives customers rewards based on their frequently bought items, shopping behavior and the amount information that they shared with the brand. “Customers can sign up for one of three membership types that best describes them: Local Businesses, Loyal Customers or Star Teachers. Members will then receive personalized offers designed exclusively for them.”

Learn more about Vend’s built in loyalty program.

Karen Dutch - Senior Vice President Marketing - Revionics Inc.

@revionics

"We see a trend towards using social not only as a vehicle for inspiration and aspiration but as a mechanism to digitally engage, reward loyalty and drive shoppers to the register, online and in-store, with relevant offers that can be amplified through social channels." Read more from Karen at Retail TouchPoints 2014 Technology Preview.

www.revionics.com

7. Relationship marketing and thought leadership will rule retailers' sales & marketing strategies

Say goodbye to pushy sales people who follow shoppers around. Retailers will learn that going for the “hard sell” isn’t effective anymore. Instead, they’ll invest in cultivating relationships and establishing thought leadership.

In 2014, we expect more brands to employ likeable experts—store associates who aren’t there to sell, but rather to dish out advice, solve problems, and build relationships. As Internet Retailer puts it, “the role of the associate will change from an information provider to a facilitator of engagement.” Instead of just giving product and pricing information, they will leverage each shopper’s data (i.e. previous purchases, shopping behavior etc.) to provide tailored advice and shopper-specific offers. We predict that retailers will invest more in training their staff for this role, and they’ll also invest in arming them with the right tools.

In addition, businesses will spend more resources in thought leadership and content marketing to educate and engage with consumers. Kind of like what real estate company Kinleigh Folkard & Hayward did when it launched Completely London magazine in 2009—a time when the real estate market was down in the dumps.

The magazine offered city guides as well as informative and entertaining articles about the people, places, and properties in London. KFH’s efforts paid off. The magazine successfully positioned the company as a thought leader in the real estate space, strengthened its relationship with existing clients, and attracted new ones.


8. Customers' need for speed will grow in 2014

The "always connected" consumers expect fast answers to questions or requests, and businesses will need to work extra hard to get in touch with shoppers as quickly as possible. And while businesses have already started doing it via live chat, SMS alerts, 24-7 hotlines, and social media, we’re anticipating brick-and-mortar retailers to roll out solutions that would enable associates to give instant, real-time information to shoppers.

For example, shoppers who walk into Burberry stores will see that associates are armed with iPads that they can use to provide real-time product information and availability. Not only that, but according to Retail Info Systems News, associates also have a ton of customer information at their fingertips, “including if the consumer opts in, their shopping behavior, what shops around the world they purchase from, what they have in their basket online,” and more, enabling them to provide personalized offers and recommendations instantly.

Speed can also apply to order fulfillment. As Retail Customer Experience put it, "By 2016, 50 percent of national retailers, will invest in distributed order management, enterprise inventory visibility, and workforce management to enable same day fulfillment."

We believe that in 2014, retailers will find ways to streamline and speed up order fulfillment so they can get products into customers’ hands as quickly as possible. Just take a look at what Amazon is doing. The company recently generated a lot of buzz when it announced its plans for Prime Air, a drone-based delivery service that aims to complete deliveries in 30 minutes or less.


9. Retailers will continue to invest in Big Data to track shoppers

Studies have found that “Fifty-four percent of marketers already have invested in Big Data solutions, and nine out of 10 marketers plan to do so in 2014.”

Why the focus on Big Data? It’s because businesses have realized that in order to predict shopper behavior and provide truly personalized experiences, they would need to gather as much information about the behavior, history, and whereabouts of consumers. Big Data enables retailers to implement dynamic pricing, personalized recommendations, shopper-specific discounts, and more.

Nordstrom is among the top retailers leveraging Big Data. The department store gathers and analyzes massive amounts of information from in-store sales, online behavior, social media, and more to determine which products to promote and how to market them. It even launched the Nordstrom Innovation Lab, “a team of techies, designers, entrepreneurs, statisticians, researchers, and artists, all trying to discover the future of retail.”

Learn how Swarm can give the big data advantage to the little guy.

Jonathan Levitt - Chief Marketing Officer - OpinionLab

@JonathanLevitt

"Powerful new analytics are emerging as retailers track how people move from site to store and how they interact with information, associates and merchandise prior to the sale. Measurability brings new efficiencies and opportunities." Read more from Jonathan at Retail TouchPoints 2014 Technology Preview.

www.opinionlab.com

10. Big Data will lead to bigger privacy concerns for consumers

People will get uncomfortable when they realize just how much they’re being tracked, which is why we’re anticipating consumers to push back a bit, and try to find ways to stop businesses from “stalking” them. They may start using “Do Not Track” solutions such as the recently-launched AVG app that blocks WiFi location tracking. We expect more services such as this to emerge next year.

Retailers may be able to address privacy concerns by educating shoppers about the benefits of Big Data analytics. They need to communicate that they’re gathering data to improve shopper experience and not to steal information or breach privacy. In addition, businesses need to build trust by being transparent and empowering users to take control of their information.


11. Social media will heavily influence product decisions

We predict that social media will play a much bigger role in retail decision making. Currently, most retailers are using social sites to monitor feedback and connect with customers. In 2014 though, they’re going to take it a step further and use social media when developing products and marketing campaigns.

Nordstrom for example, has started using Pinterest to decide which products to display in their stores. According to Business Insider, “popular items on Pinterest will be displayed with a red tag identifying them as popular in the women's shoe and handbag departments of Nordstrom's 117 stores.”

Similarly, Target launched Awesome Shop, a site that showcases Target’s “best-reviewed” and “most-pinned” items.

True, by the way, have you liked Vend on facebook?


12. Retail will grow in emerging markets

Brands are starting to see that they have huge opportunities in emerging markets such as Brazil, China and India, and we predict that they will strongly go after those opportunities in the coming year.

In fact, we can already see signs of this happening. Burberry for instance, has reportedly closed 14 stores and opened eight to reflect a focus on “’high potential markets’ including China, the Middle East, India, Brazil and Mexico”. Recent reports also state that “Tiffany & Co. will spend more on marketing in China than any other market next year as it strives to build the same kind of reputation for its brand there that it enjoys in the US.”

Lori Mitchell-Keller - Head of Global Retail Industry - SAP

@LoriMitchellKel

"The retailers that are able to tap into integrated customer data repositories, mine it for consumer insights and then execute promotional campaigns that are truly relevant to the consumer will be the big winners in 2014." Read more from Lori at Retail TouchPoints 2014 Technology Preview.

www.sap.com

Bottom Line: The future lies in the hands of consumers

A lot of the predictions on this list demonstrate the power shift away from retailers to customers. In the early days of retail, producers had the most say about pricing and distribution. Overtime though, the web brought about more information and transparency in the form of review websites, price check apps, and social media.

As a result, shoppers now have more control over what to purchase and where to buy it from, leaving retailers with the challenge of vying for consumer attention. And that’s why the emerging trends of 2014 are all about grabbing and keeping the interests of shoppers. Retailers are learning that their survival depends on how well they adapt to this customer-centric reality.

What do you think of these predictions? Can you relate? Share your thoughts in the comments below.


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