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Trends that can change the game for retail in future

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It is that time of the year where retail takes the forefront, courtesy the festive and holiday shopping extravaganza created by retail brands to entice shoppers and ring in more sales. And as the year draws to a close with the buzz around the New Year’s curtain raiser, it is time for retailers to peek into the crystal ball of the future and get a preview of the trends that could prove to be the game-changers in the year 2018 and beyond.

Predictions of what lies ahead for retail in 2018 are already doing the rounds and it is no surprise that Artificial Intelligence (AI), Virtual & Augmented Reality i.e. VR and AR, Internet of Things or IoT, self-checkouts, drone based delivery, and so on, would appear in most lists. The fact of the matter is that these technologies have already begun impacting the retail sector and 2018 will see this impact intensifying multifold. As such, retail businesses must look to invest in some or all of them if necessary to keep up with the trend.

Having said that, going into 2018 most retailers will still need to work on some extremely vital aspects as these will not be mere trends but rather a necessity and benchmarks for customers to pick and choose the brands they would like to associate themselves with.

The 3 important aspects are:

Omni-channel: The top priority for most retailers will be to streamline their businesses in-order to offer a unified omni-channel customer experience. So whether it is adding new channels or  integrating systems, operations, processes or handling supply-chain and omni-channel fulfillment or providing features like click-and-collect & endless aisle, retailers must get it right in omni-channel retail using the right omni-channel retail solutions.

Mobility: Based on the data from the major shopping events in 2017, mobile proved to be a force to reckon with. As mobile shopping has become a new norm, retailers looking to ‘omni-channelize’ their businesses need to integrate this channel seamlessly. Other aspects of mobility such as mobile payments and mobile POS systems would continue to be essential technologies that retailers would need to keenly invest in.

Analytics: The power of big-data analytics is something every industry has recognized and so is the case with retail. However going into 2018, analytics will have to be woven into the fabric of the retail business through the right technology to enable retailers to take important business and strategic decisions as well has help in planning promotions, providing personalization and planning seasons ahead.

Like in 2017, even in the New Year, retail will be customer-driven. Retailers must realize and appreciate the importance of focusing on the customer rather than the products, the channels and other aspects. As such, customer-centricity must run deep down in the DNA of their business to have a Happy and Prosperous New Year 2018!

Conversion Rate Optimization in Physical Retail

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Like online retailers, brick-and-mortar retailers need to focus more of their efforts on converting the store traffic that they receive. In today’s retail environment, no retail business can afford to fritter away their store traffic – it should be treated as a valuable, non-renewable resource. Conversion rate optimization (CRO) when effectively applied, can be the difference between delivering positive same-store sales or not.

Here are some statistics that shed light on the conversion rate scenario of brick-and-mortar stores:

Physical stores have a higher conversion rate than online

Conversion rates vary considerably across retail categories, but they also vary significantly within the same chain as a result of variations in store format, geographical location, product mix, inventory levels, and most importantly, store personnel who serve the shoppers. The reality is, each and every brick-and-mortar store is unique and in order to optimize conversion rates, these unique characteristics need to be considered.

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Impact of Click & Collect on Conversion Rate

Customers expect a seamless experience regardless of how they engage with a retailer and these expectations are blurring the lines between online and physical stores. Concepts such as Click and Collect are impacting store traffic patterns and conversion rates.

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At the store depicted here, the store traffic counts went up from 10 to 12 after the implementation of omni-channel retail solutions that enabled Click & Collect, sometimes also referred to as Buy Online, Pick-up In-Store (BOPIS) functionality.

Since three of the 12 traffic counts generated were ‘pre-converted’ i.e., already purchased online and came to the store to pick-up their purchase; they didn’t generate a sales transaction. If we don’t track that Click & Collect transaction and factor it into our conversion rates, then the only thing that we will conclude is that our conversion rates have dropped from 50% to 42% in this example.

Reasons why in-store shoppers didn’t convert

The most cited reasons why in-store shoppers didn’t purchase are:

  1. They could not find anyone to help them; and
  2. They did not want to wait in a queue at check-out.
  3. They could not find what they were looking for or the preferred item was out-of-stock.

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This draws attention to the impact in-store staff have on conversion rates. Getting the store teams engaged and encouraging them to apply insights from traffic and conversion analytics can play a winning role in driving the conversion rates at the store.

Solutions such as mobile POS, self-checkouts can address the long wait-time at the checkout counters by enabling effective queue busting at the store.

The merchandising and product availability challenges can be countered by deploying omni-channel features such as endless aisle.

In conclusion, modern day retailers need to implement innovative software solutions that allow them to transform their business in to omni-channel as well as equip them with the power of capturing and analyzing data across channels. This will help them boost the conversion rates at the brick-and-mortar store.

Source: http://www.retailwire.com/public/sponsors/headcount/assets/HeadCount-Conversion-Rate-Optimization-2017.pdf

Black Friday and Cyber Monday 2017 – key takeaways

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As the Black Friday weekend came to a steady close, the Black Friday and Cyber Monday sales statistics are now in the books and with that data in hand, it is time to dissect it, dive deeper into various aspects of it, analyse it, and make note of the inferences and learnings to be used for the future.

To begin with, it was reported that American consumers spent over US $19 billion online over the five-day period from Thanksgiving through Cyber Monday in 2017. This was a 15 percent rise in spends as compared to spends done during the same time-frame last year.

Moving on, more than 64 million Americans used both online and physical stores to carry out their purchases from Thanksgiving Day through Cyber Monday. Consumers who shopped at both online and brick-and-mortar stores spent US $82 more on an average than online-only shoppers, and US $49 more on an average than brick-and-mortar stores-only shoppers. Black Friday 2017 seemed to be the most popular day for brick-and-mortar retail stores with more than 70 million shoppers, followed by Small Business Saturday (Nov. 25, 2017) with about 55 million shoppers.

One of the most important takeaways for retail businesses basis the above statistics is both offline and online retail channels were used by consumers to shop. In fact, consumers who used more than one channel to shop spent higher on an average than those who used only a single channel.

Mobile shopping or m-commerce has developed in to a popular channel for consumers to discover and buy products. And this popularity reached new levels this year as mobile purchases surpassed those on desktop throughout the entire Black Friday weekend. Mobile sales accounted for more than 60% of orders overall, an increase of 10% over the last year. Thus, retailers across the globe need to definitely harness this channel to boost their sales in the future.

With online, offline and mobile – 3 important channels at play significantly in this year’s Black Friday and Cyber Monday shopping event, a very important learning for retailers is that omni-channel retail can help them maximize their sales.

Another important aspect of this year’s Black Friday shopping event was that, though dominated by U.S., other countries across the globe also noted a significant spike in their sales on the same day. Reports state that countries like South Africa, Spain and the United Kingdom saw over 3 times as many orders on Black Friday, whereas Germany, Canada and France witnessed over 2 times the orders. Other countries like Ireland, Singapore and China also noticed a bump in the number of orders on Black Friday 2017. Thus Black Friday is becoming a global phenomenon soon. For retail businesses across the globe, this translates into an opportunity to attract more customers and drive higher sales.

Retail brands looking to strike big in the near future must pay heed to these key takeaways and use the right combination of people, processes and technology to succeed.

This festive shopping is going Omni-channel

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The Singles’ Day shopping extravaganza would not have become a huge phenomenon nor would it have been a record-breaking event had it not been for disruption technology such as omni-channel. That’s not all. As per a survey, 81 percent of holiday season shoppers use up to six channels to make their purchases for the festive season. These are significant numbers and must not be overlooked. All these are clear and straight-forward indications that omni-channel is the best step for retail businesses in the right direction during the upcoming Christmas shopping season.

It would not be an understatement to state that ‘for most retail businesses and other entities ‘omni-channel’ should be their go to strategy this festive season. What this implies is, retail owners need to channelize their efforts in delivering a unified omni-channel customer experience throughout the shoppers’ journey right from research through purchase to returns. Enabling omni-channel fulfillment options like click-and-collect, endless aisle, click-and-deliver, drop shipping and so on would definitely help the cause. To make it more impressive, adding new and innovative options such as ‘reserve online, try in-store’ or ‘book online, pay in-store’, could not only pave the way for retailers to have an edge above their competitors, but also prove to be ‘deal clinchers’. Going the extra mile, omni-channel returns also need to be taken seriously. While handling returns the right way should be a priority for brands, they need to improvise on the way returns are accepted so as to make it easier and faster for the end customer. For example, retail companies can provide customers with kiosks at malls and stores for returns.

To be able to do all of the above, retailers need to get these 4 fundamentals right:
– Making their business customer focused or customer-centric
– Integrating all channels (processes, operations, systems) seamlessly
– Having a consistent branding across all channels
– Enabling accurate, real-time information accessibility wherever necessary

Offering a unified omni-channel experience and the challenges of getting that right should be top of mind for retailers looking to bolster their sales this Christmas and New Year. However, retailers who are determined to get their fundamentals right to the ‘T’ as well as adopt forward looking, innovative omni-channel retail solutions could emerge trailblazers in the festive shopping arena.