There’s no shortage of companies calling out 2016’s top retail trends and, undoubtedly, most of them center around the technology takeover. But new research from Synchrony Financial points to a few trends retailers may have yet to take heed of.
In short, “The pace of change is accelerating,” the company’s marketing innovation leader John P. Williams said.
The consumer financial services company said technology is driving eight of the 10 trends that will have the biggest impact on retail sales this year. And with the underwhelming sales most major retailers saw in the fourth quarter, Synchrony’s 10 Things to Know – the Top 10 Retail Trends for 2016 seems well timed.
That technology and fashion are crossing paths may not be news, but the smartwatches, fitness devices healthcare monitors and bespoke fashion design consumers are calling for aren’t quite enough. They now want devices that will enhance the shopping experience.
“Retailers should align the shopping experience with growing consumer adoption of wearables in areas such as payments and personalized, real-time marketing,” Synchrony said.
New retail holidays
Last holiday was a frenzy of promotions, as was most of 2015, with retailers growing increasingly desperate to get shoppers into stores. Now there may even be more excuses for a sale.
According to Synchrony’s findings, retailers that are shirking sales on just the standard holidays and creating their own holidays are winning big. Alibaba’s Singles’ Day holiday should be case in point. The Chinese e-commerce king brought in a record $14.3 billion in sales on the Nov. 11 day that’s similar to Valentine’s Day but targeted to singles.
“Large retailers have the clout and customer loyalty to create their own sales holidays with great success,” Synchrony said. “Consider opportunities that fit with your brand and be prepared to launch a competitive response when this happens.”
It’s all about ease and speed with today’s consumers—and they want to search for products using their voice and not just their fingers.
Searching for products and services via voice technology can be as much as four times faster than type-and-click, Synchrony found. But the benefit for retailers can go beyond just search.
Retailers are tapping into robotics to accommodate demand for voice-enabled interaction using robotics, like Pepper, as in-store assistants that consumers can interact with, which not only frees up employees but makes the shopping experience more fun.
As Synchrony explained, “Retailers should understand how consumer search behavior is becoming more voice-based and optimize online platforms for natural language.”
Virtual reality in the shopping experience
Most retailers know the consumer wants an elevated shopping experience, and some have already figured out how to use virtual reality to create personalized, immersive shopping for customers right in their homes—like virtual store tours or “trying on” new fashions using virtual versions of their human selves.
And with the higher screen resolutions and processing power smartphones have, mobile can get in on the action, too.
“Virtual reality can enhance the shopping experience for customers by providing them with a personalized, interactive retail context that can lead to more sales across all channels,” Synchrony said.
Streaming videos has already taken off with the younger generation, namely Millennials, so retailers should tap into the technology as a sales tool. Using video to answer consumer questions, show a product in action, explain its benefits or demonstrate how to use it, can all help boost sales.
A ClickZ Digital Marketing study last year found that 85 percent of consumers said they are more likely to make a purchase after watching a product video, and a white paper from Cisco put video-on-demand traffic doubling by 2019.
According to the report, “Retailers should assess where there might be opportunities in their own sales process to use online streaming video for product demos, display or customer service.”
Internet of Things
The Internet of Things—or the idea that our everyday items will soon be able to send and receive data just like the Internet does—will continue to teach retailers more about their consumers.
Point of sale isn’t the only place for collecting consumer data anymore.
“Today, retailers are deploying and connecting millions of low-cost microdevices and sensors (“Things”) just about everywhere in the retail environment,” Synchrony said. “The payoff: more data collected in more places, providing rich and invaluable insights into consumer behavior, market trends, buying patterns, customer engagement and the like.”
The Internet of Things could also help generate new revenue streams with new products and services plus boost productivity, lowering costs as a result.
Mobile and alternative payments
Mobile payments may only have made up 1.6% of total retail sales last year, but the number is expected to triple in 2016.
Here’s what Synchrony points to as the driving forces behind this trend:
- More smartphones are offering mobile wallet apps (e.g., Samsung Pay) and capability (NFC + biometrics)
- More wearables like watches are featuring NFC payment capabilities (e.g., Samsung Gear S2 w/ Samsung Pay)
- More retailers are transitioning to NFC POS terminals
- More banks and retailers are launching branded wallets
“Retailers should monitor the ever-changing payment market closely and update their POS terminals and e-commerce platforms to accept new payment methods,” the report noted.
Social network buy buttons
Facebook, Twitter and Pinterest have all added buy buttons to their platforms in hopes of helping retailers catch consumers where they already spend heaps of time, but adoption has so far been slow going.
The growth in mobile is expected to change that, however.
“That’s because, functionally, it’s difficult to navigate between apps on a device. So the ability to shop directly inside the app you’re already using rather than being directed to a new site or app is likely to be a tantalizing one for consumers and retailers alike,” Synchrony said citing an eMarketer report from November.
Increased spending on pets
This trend has been a bit more under wraps than others, but consumer spending on pets increased 25 percent in the last five years and Synchrony said it expects that growth will continue on because of these three reasons:
- 63 percent of U.S. pet owners consider their pets a member of the family
- Many urban couples are now opting to become dog owners as they wait longer to have children
- 76 percent of Millennials are more likely to splurge on a non-essential item for their pet than themselves
“Retailers and veterinarians should focus on understanding the Millennial pet owner’s needs and resource appropriately for the increasing demand,” Synchrony said.
“The days of the one-size-fits-all customer experience model are waning,” Synchrony said. “Consumers today want personalized experiences and offers tailored to their unique needs.”
Seventy-seven percent of shoppers said they would be more loyal to stores that provided personal customer experience benefits. And with the access to data and the Internet of Things aiding retailers, many should be able to offer those tailored experiences.
So far, department stores are using beacon technology to send ads to consumers while they shop on-site, online retailers are using product recommendation engines to show consumers more things they might like based on previous searches, and some retailers are offering loyalty programs tailored to consumers’ interests.