Each year brings new patterns to the retail industry that can be leveraged to drive business strategy for companies with the capability to track them. Examining these trends can help retail leaders decide where to allocate funding, what sections of their organization need improvement, and how they can provide the best experience for their customers.
Experts have predicted that the following trends will help shape the way consumers do their shopping this year and beyond. Recognizing these patterns can put your company in the best position for success.
Strong retail growth for dollar, big box and department stores
According to the Chicago Tribune, experts expect considerable growth in the retail industry this year, including expansion for dollar stores, big box retailers and department stores. Considering that the industry's sales typically reach $2.6 trillion annually and make up 70 percent of the U.S. GDP, this is good news for more than just retail vendors.
In particular, dollar stores, mass merchants and department stores will see significant growth. The Tribune noted that there is rising demand for these types of retailers, both online and at brick-and-mortar locations. Kantar chief economist Frank Badillo noted that the bulk of this market expansion will be driven by younger consumers who have experienced considerable employment gains recently.
"As a result, smaller stores, from neighborhood convenience stores to upscale specialty stores, will be a key growth category because they appeal to younger people who tend to live in urban environments, dine out and shop on an as-needed basis," Tribune reporter Alexia Elejalde-Ruiz wrote.
Social media will provide purchasing power
In the past, social media has always offered a beneficial branding and marketing platform for retailers. A further shift is under way, particularly as top websites like Facebook and Twitter include buy button options enabling customers to make purchases directly from the platform. Currently, retailers like Target and Nordstrom are testing out these abilities through Twitter.
"A customer who'd like to purchase an item she sees on the retailer's feed can tap on the Like2Buy link found on…[the] Instagram profile," Vend explained. "Clicking on the link will take her to the retailer's Like2Buy site, which looks similar to its Instagram page. When the shopper taps on an image, she'll be taken directly to its product page, where she can find more details and proceed to checkout."
Social media buying features provide a more unified shopping experience for customers, especially as social media becomes increasingly popular with consumers. Thus, retailers must ensure their online footprint supports their brand and their clients' preferences.
Personalization through beacon technology
In addition to boosting online efforts, technology is on the rise in brick-and-mortar locations as well. Beacon systems - sensors placed at digital touch points in retailer's stores with the capability to connect with shoppers' mobile devices through wireless standards like Bluetooth - are being increasingly deployed. These systems allow retailers to better engage customers through a personalized in-store shopping experience.
This is often a way for brick-and-mortar companies to compete with e-commerce giants. Just as online retailers offer customized recommendations for consumers based on the items they view and purchase, beacons will enable brands to do the same in their physical locations. Vend noted that several vendors have already seen success with the beacon system.
Mobile will continue to be an essential channel
The further rise of smartphone and tablet use has significantly changed the way consumers connect with brands and shop. Mobile will continue to play an important role in retail this year, particularly as brands offer more applications for mobile ordering, loyalty programs and mobile payment.
One of the biggest changes seen in mobile retail is the increase in mobile payment systems like Google Wallet and Apple Pay. These technologies utilize near field communication systems to enable customers to pay from their phone instead of using cash or payment cards. These require specialized consoles at in-store locations to allow the use of these mobile payment technologies. As more smartphones come equipped with NFC, it will be important for companies to support this new payment trend.
Overall, this year will continue to bring considerable growth for the retail sector, particularly as brands work harder to offer a customized shopping experience based on consumers' preferences.