What’s next for retailing in 2018? March 15 2018
Retail is transforming. Retailers need to reduce costs and increase efficiency in a challenging market where consumer spending is being squeezed and costs are rising. At the same time they need to invest in online, refresh core systems, and develop smarter, personalised offers in addition to rethinking the role of their stores.
Retail Trends 2018
2017 was tough, but there are signs that 2018 could be a better year for consumers as inflation is set to reduce and wages may start to rise. Less of a squeeze on consumers should be good news for retailers, but rising costs will continue to exert pressure on margins and force retailers to focus on cost reduction and operational efficiency even as demand starts to pick up.
2018 could see a further acceleration in store closures as retailers finally get to grips with transforming their real estate portfolios, to be fit for a market where online continues to outperform the rest of the market. The store still has a key role to play, but there will be fewer of them.
They are also facing increasing competition from a number of consumer brands that all want a closer connection with their consumers. There will be more competition for consumers, for the best locations and for the best people as automotive manufacturers and consumer product companies look to develop their presence on the high street and in shopping centres
1: Reimagine the store
The store has a great future but it will be different to its past.
Be more than a store – Retailers need to ensure that their stores remain relevant and are places that consumers want to keep coming back to. Experience is more important than ever, and retailers’ stores need to be more than just places to transact.
Put digital in your physical – Retailers are realising that the biggest impact that digital can have on their business is in-store. Some of the most innovative and compelling stores make digital a core part of the store experience.
Selling online offline – Online retailers are turning to stores to help them grow their businesses and help service their customers. But these are very different stores, ones that look to replicate the online experience in the offline world.
2: Experiment with experience
The only right way to innovate your business is to experiment.
Shop in magical reality – Augmented Reality (AR) and Virtual Reality (VR) are set to transform the retail experience both online and offline, often connecting the two with more immersive experiences.
Get personal with AI – Artificial intelligence (AI) allows retailers to personalise the shopping and products experience and to do so at scale, utilising large amounts of data.
Design for the eye – Visual search is changing the way that consumers shop for products, with more and more consumer journeys starting with an image or a photograph.
3: Transform your business
Your customers, competition and culture are always changing.
Try, try, try before you buy – We are increasingly seeing payment postponed, first through the checkout-less store and now through checkout-less online. In the competition for the millennial customer, who is seeking seamless experiences and instant gratification, we will see the growth of try before you buy services.
Answer the direct question – Everyone wants to be a retailer. New technologies and platforms are already enabling brands to go direct to consumers, and we predict an increase in activity in 2018. Brands are targeting individual consumers with individual offers and experiences and retailers need to respond by intensifying their focus on their consumers and what their offer means to them.
Discover the value in your values – Brand authenticity and sustainability are becoming increasingly important in retail. Consumers want to associate themselves with brands that have a sense of purpose and represent their views, beliefs and values. They are also becoming increasingly intolerant of brands who aren’t transparent and who don’t follow through on their promises.