4 Retail Megatrends for 2013
By Justin Honaman
"To win with shoppers other retailers are pursuing, we must do things other retailers are not doing." The bottom line for retail in 2012 continues to be the imperative in 2013.
To be the retailer's most valued supplier, CG companies must live in their world; must understand the retailer's challenges; must understand the retailer's customer, shopper, and consumer; must recognize the value of technology and how shoppers are using it to make buying decisions – and bring products that are differentiated; must recognize that a product, service, and brand are only as good "in the media" as its most recent successful offering and that through an even stronger connected world, shopper sentiment can shift in hours, minutes and seconds versus days, weeks, months.
Here are four retail trends to consider in 2013:
The Extraordinary Experience
Winning retailers recognize the value of creating a differentiated in-store experience and while online shopping is growing, the in-store experience is a point of shopper interaction and inspiration – the place where personal connections can be made (or broken). The degree of interaction between shopper and store directly correlates to perceived value of shopping experience.
Front line employees will continue to serve as the "face-of-the-Retailer" – think smarter, more product-knowledgeable associate meets shopper. The employee is the brand and therefore, a reflection of the brand. Expect additional investments in people and employee recognition/incentive programs in store. Expect also that retailers will look to CG suppliers to provide content and information on new products to retailers and their store associates so that they may be product and service experts with the shopper.
In-store shopper engagement and transaction processes continue to evolve. POS systems are changing. No longer must a shopper checkout at the front-of-store register, but instead are able to pay transactionally where it makes sense in-store on an iTouch or similar device. With portable payment systems, retailers like Nordstrom simplify the checkout, return and receipt handling process – and enable a more intimate associate-shopper relationship. Retailers will look to balance convenience with the fact that the front-end is where incremental revenue is found via basket-impulse items.
Finally, augmented reality apps will enable an even richer experience in non-traditional aspects of a consumer's life. These apps enable a consumer to get information from pointing a smartphone or tablet camera at objects, products, surroundings – and by doing so, the app serves up information and opportunities to interact/make purchases of products that historically could not be curated in this fashion. These apps could also serve up unique in-store effects.
The Savvier Shopper
The savvier shopper takes advantage of technology pre-shop, in-store, and post-shop. This shopper is willing to share personal information and shopper preference data in order to receive a more customized shopping experience. And this shopper expects customized recommendations and contextually relevant communications. Showrooming is no longer new news and will continue to be more of a reality as more shoppers carry a smartphone and tablet. Shoppers are more educated than ever and the ability to check prices – look for value – on the fly has resulted in increased commoditization and a rethinking of how brands and retailers go about providing a differentiated offering.
Omnichannel Becomes Mainstream
The omnichannel retail strategy moves from cool new, over-used buzzword to mainstream strategy for winning with the savvier shopper. In order to implement an omnichannel strategy, retailers will invest in back-office platform and architecture (e.g. POS, EDI, data warehouse, analytics/BI etc.) to enable in-store and online shopping processes to be effective and customized. Shopper analytics will play an increasingly important role as retailers look to make sense of increasing volumes of available metric data to drive merchandising and marketing decisions while contextualizing communications to shoppers (expect to hear more about "Big Data" in 2013). While separate functions within many retail businesses, the web-based shopper experience and touch points will be unified or connected with in-store processes thereby unifying the shopper journey.
There will be an absolute explosion in mobile payment acceptance, utilization, and confidence in 2013. Leading the way will be PayPal, Google Wallet, Square, and retailer-centric mobile apps among others –already accepted in numerous retail outlets. As we have already seen in many service businesses (e.g. airline onboard food/services), cash will no longer be accepted which will have mutual benefit to the retailer and the shopper.