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The Top 10 Trends Expected to Drive Retail in 2016
In its latest market brief, Synchrony Financial predicted that technology will shape eight of the top 10 trends expected to have the greatest impact on retail sales this year.
New York--Though trends in retail often tend to be consumer driven, these days the influence of technology is increasingly apparent.
In its latest market brief analyzing the retail environment, Synchrony Financial identified a number of trends impacting retailers nationwide. Synchrony developed the list from ongoing retail and consumer research, and by tracking emerging as well as well-established trends that continue to be important in the marketplace, as well as those impacting the payments space.
According to Synchrony, technology is part of eight out of the top 10 trends expected to have the greatest impact on retail sales this year.
Here are those trends and what they’ll mean for retailers.
1. Wearable technology. Fashion and function continue to mix, driving consumers’ desire for wearable technology. What’s more, wearable tech continues to change the way consumers are shopping, with eight out of 10 shoppers who are interested in wearables indicating they want their devices to enhance their in-store experience. Retailers should make sure that the in-store experience they’re creating is aligned with wearables, especially in areas such as payments and personalized, real-time marketing.
2. New retail holidays. To spur sales and increase customer acquisition, some retailers have been creating their own shopping holidays beyond the 20 found on the standard U.S. calendar and are seeing big rewards--the Alibaba Group launched Singles’ Day this year and logged $14.3 billion in sales. With large retailers having more clout and customer loyalty to create their own successful holidays, smaller retailers should consider the opportunities that might fit with their brand and launch a competitive response when this does happen.
3. Voice technology. While the main advantage to voice technology is quicker searches with audiences, it goes beyond that. Synchrony noted that one retailer unveiled a robotic in-store assistant with which that shoppers can interact (think: an in-store Siri), enhancing the consumers’ experience. Retailers should understand how consumer search behavior is trending toward voice-based and optimize their online platforms to fit this.
4. Virtual reality in the shopping experience. Virtual reality can create sensory experiences with which users can interact. Some progressive retailers already are using it to create immersive experiences for shoppers directly in their home, such as a virtual store tour or trying on new styles. Virtual reality can take the shopping experience to a
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new level, providing consumers with a personalized, interactive retail context leading to more sales across all channels.
5. Video streaming. A trend that has taken off particularly with millennials, video streaming in a sales context can allow retailers to answer consumer questions and show the product in action, helping to increase sales. In fact, 85 percent of consumers have indicated they are more likely to purchase after seeing a product video, Synchrony said. Retailers should look at where there might be opportunities in their own sales process to use online streaming video.
6. Internet of Things. The Internet of Things is the network of physical objects--such as devices, buildings, etc.--that are embedded with electronics, software, sensors and network connectivity, enabling these objects to collect and exchange data. Rather than just collecting data at the point of sale, retailers are able to gather it in more places, providing further insight into consumer behavior, trends, buying patterns and more. This also can lead to cost-saving through productivity improvements.
7. Mobile payment and alternative payments. Though the percentage of total retail sales paid through mobile payments remains small (less than 2 percent in 2015), it’s expected to more than triple in 2016, especially as more smartphones offer mobile wallet apps such as Apple Pay and Samsung Pay, and as more wearable are equipped with near-field communication. Retailers should keep an eye on the payment market and update POS systems and e-commerce platforms accordingly.
8. Social network buy buttons. Most of the big social networks have added the capacity to shop directly from their sites now. Even though adoption has been slow with millennials, the growing use of mobile will continue to advance the trend. It will be important for retailers to make sure their marketing message is integrated with top social channels so that products are in front of consumers.
9. Increased spending on pets. Synchrony said that consumer spending on pets has risen 25 percent over the past five years and likely will continue to rise for a number of reasons--urban couples are opting to get animals as they wait longer to have children, and more pet owners are thinking of their pets as family. Retailers who find a way to appeal to animal-loving consumers will benefit.
10. Personalization. Consumers today are looking for personalized experiences and offers, with more than three out of four shoppers indicating they’d be more loyal to a store that provided their preferred loyalty benefits. Thanks to data and the Internet of Things, retailers now can give them that. Department stores are using beacon technology to push ads to mobile devices while shoppers are still in store, online retailers are enabling product recommendation based on browsing history and some retailers are tailing loyalty programs to boost customer loyalty and repeat spending.
5. Video streaming. A trend that has taken off particularly with millennials, video streaming in a sales context can allow retailers to answer consumer questions and show the product in action, helping to increase sales. In fact, 85 percent of consumers have indicated they are more likely to purchase after seeing a product video, Synchrony said. Retailers should look at where there might be opportunities in their own sales process to use online streaming video.
6. Internet of Things. The Internet of Things is the network of physical objects--such as devices, buildings, etc.--that are embedded with electronics, software, sensors and network connectivity, enabling these objects to collect and exchange data. Rather than just collecting data at the point of sale, retailers are able to gather it in more places, providing further insight into consumer behavior, trends, buying patterns and more. This also can lead to cost-saving through productivity improvements.
7. Mobile payment and alternative payments. Though the percentage of total retail sales paid through mobile payments remains small (less than 2 percent in 2015), it’s expected to more than triple in 2016, especially as more smartphones offer mobile wallet apps such as Apple Pay and Samsung Pay, and as more wearable are equipped with near-field communication. Retailers should keep an eye on the payment market and update POS systems and e-commerce platforms accordingly.
8. Social network buy buttons. Most of the big social networks have added the capacity to shop directly from their sites now. Even though adoption has been slow with millennials, the growing use of mobile will continue to advance the trend. It will be important for retailers to make sure their marketing message is integrated with top social channels so that products are in front of consumers.
9. Increased spending on pets. Synchrony said that consumer spending on pets has risen 25 percent over the past five years and likely will continue to rise for a number of reasons--urban couples are opting to get animals as they wait longer to have children, and more pet owners are thinking of their pets as family. Retailers who find a way to appeal to animal-loving consumers will benefit.
10. Personalization. Consumers today are looking for personalized experiences and offers, with more than three out of four shoppers indicating they’d be more loyal to a store that provided their preferred loyalty benefits. Thanks to data and the Internet of Things, retailers now can give them that. Department stores are using beacon technology to push ads to mobile devices while shoppers are still in store, online retailers are enabling product recommendation based on browsing history and some retailers are tailing loyalty programs to boost customer loyalty and repeat spending.
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