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10 Retail Trends Expected to Dominate 2017
In its latest market brief, Synchrony Financial predicted that technology and convenience will drive the segment this year.
New York--Technology’s influence is so strong in today’s world that it is starting to drive trends rather than just being a response to them.
In retail, it’s playing an equally large part as many of the trends that are shaping the market seem to be a confluence between the consumer behavior and tech.
Here are the 10 trends that will drive retail according to Synchrony Financial and what they mean for retailers.
1. Interactive shopping experiences. There’s a lot of research that shows that not only do consumers value experiences over owning things, but they will pay a premium for the experiences they think are worth it. This spans all income groups and generations.
The most innovative retailers are leveraging this trend to get consumers into stores by transforming stores into experiences themselves. Think Williams Sonoma with its in-store cooking classes and REI with its rock climbing walls.
Offering these kinds of experiences entice the consumer to stay in the store longer, browse more and feel more connected to the brand.
2. Augmented and virtual reality. Brands in all consumer product categories are using virtual reality for advertising purposes, not only for 360-degree and 3-D videos, but also for content creation with immersive storytelling and product demonstrations to help consumers experience the products in a way they wouldn’t have before.
A great example of how a virtual reality app can create excitement and engagement is the über- popular Pokémon Go game.
3. Healthy living. Consumer spending on healthy living goods continues to grow.
The Organic Trade Association said consumer demand for organic food has grown by double digits almost every year since the 1990s. Meanwhile, the number of gyms, health clubs and fitness clubs has grown over the past five years while sales for products related to the segment have grown and athleisure has drastically expanded as an apparel category.
4. The “robot invasion.” While not something quite as dramatic as what you might see in the movies, robots have quietly been making their way into the retail segment, mainly in the areas of logistics and customer service.
Some retailers also have brought robots and artificial intelligence into the store, where they have been used to identify products, retrieve items in the warehouse for shoppers and instantly order products.
Target, for example, recently started testing Tally, a robot that travels through the aisles and takes inventory.
5. “Socializing” between brands and consumers.
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The two talk via social media, and this communication has become as natural as connecting with friends on the same networks.
In Synchrony’s 2016 Digital Study, the company found that about half of those surveyed said they have purchased a product as a result of social media, compared with only about a third in 2015. The content that makes an emotional connection to the brand, offering a break from sales posts, is the most successful.
6. The ship-to-store option. The concept of ordering an item online and having it shipped to a store benefits both consumers and retailers, Synchrony said.
It saves consumers on shipping charges and the time it takes to browse through aisles for the product they want while retailers are able to drive traffic into their store where customers are likely to pick up other items.
It also gives the retailer the opportunity to fulfill the order from store inventory when available, eliminating additional transportation costs.
7. A new purchase channel: “conversational” commerce. With the launch of the Amazon Echo, a new channel of interaction for consumers was opened--the voice channel. Consumers can order directly from it simply by speaking to Alexa, the “brain” behind the Echo.
Now Google is getting into the game with development of the Google Home software. Even though this technology still is cutting edge, more retailers might also develop voice-based functionality for purchases as it becomes more widely adopted.
8. Partnerships and pop-ups. New retail models have sprung up as retailers look to innovate in the form of shop-in-shops and pop-up shops. They have become ubiquitous in all segments of the market and offer the opportunity for greater reach and to attract new consumers at a lower cost.
For retailers who want to test it out with a low cost and quick concept, partnering with other retailers or setting up a pop-up shop might be the best way to do so.
9. The emergence of a cashless society. Cash is no longer king. The movement started with credit and debit cards and continues today as new technologies take hold.
Though mobile wallets (such as Apple Pay and Samsung Pay) have been around for a few years now, consumer awareness has just started skyrocketing within the past year or so--it’s up from 55 percent in 2015 to 81 percent last year. Regular use is expected to increase again in 2017 as more retailers adjust their point-of-sale systems to accept the tech.
The benefit of a cashless society is not only ease and convenience for consumers, Synchrony said, but also for retailers, offering not only a seamless point-of-sale experience that speeds up checkout but also customized promotions and personalized marketing.
10. The Internet of Things. What is the Internet of Things? It’s the network of physical objects, like devices, buildings, etc., that are embedded with electronics, software, sensors and network connectivity, enabling them to collect and exchange data.
The tech behind it allows consumers to buy whatever they want, whenever they want.
The benefit for merchants in the Internet of Things is that more data is collected in more places, which can provide great insights into consumer behaviors, market trends, buying pattern and engagement, allowing for more personal interactions and offers.
In Synchrony’s 2016 Digital Study, the company found that about half of those surveyed said they have purchased a product as a result of social media, compared with only about a third in 2015. The content that makes an emotional connection to the brand, offering a break from sales posts, is the most successful.
6. The ship-to-store option. The concept of ordering an item online and having it shipped to a store benefits both consumers and retailers, Synchrony said.
It saves consumers on shipping charges and the time it takes to browse through aisles for the product they want while retailers are able to drive traffic into their store where customers are likely to pick up other items.
It also gives the retailer the opportunity to fulfill the order from store inventory when available, eliminating additional transportation costs.
7. A new purchase channel: “conversational” commerce. With the launch of the Amazon Echo, a new channel of interaction for consumers was opened--the voice channel. Consumers can order directly from it simply by speaking to Alexa, the “brain” behind the Echo.
Now Google is getting into the game with development of the Google Home software. Even though this technology still is cutting edge, more retailers might also develop voice-based functionality for purchases as it becomes more widely adopted.
8. Partnerships and pop-ups. New retail models have sprung up as retailers look to innovate in the form of shop-in-shops and pop-up shops. They have become ubiquitous in all segments of the market and offer the opportunity for greater reach and to attract new consumers at a lower cost.
For retailers who want to test it out with a low cost and quick concept, partnering with other retailers or setting up a pop-up shop might be the best way to do so.
9. The emergence of a cashless society. Cash is no longer king. The movement started with credit and debit cards and continues today as new technologies take hold.
Though mobile wallets (such as Apple Pay and Samsung Pay) have been around for a few years now, consumer awareness has just started skyrocketing within the past year or so--it’s up from 55 percent in 2015 to 81 percent last year. Regular use is expected to increase again in 2017 as more retailers adjust their point-of-sale systems to accept the tech.
The benefit of a cashless society is not only ease and convenience for consumers, Synchrony said, but also for retailers, offering not only a seamless point-of-sale experience that speeds up checkout but also customized promotions and personalized marketing.
10. The Internet of Things. What is the Internet of Things? It’s the network of physical objects, like devices, buildings, etc., that are embedded with electronics, software, sensors and network connectivity, enabling them to collect and exchange data.
The tech behind it allows consumers to buy whatever they want, whenever they want.
The benefit for merchants in the Internet of Things is that more data is collected in more places, which can provide great insights into consumer behaviors, market trends, buying pattern and engagement, allowing for more personal interactions and offers.
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