The retail sector continues to evolve at breakneck speed. New consumer preferences are forcing the market to adapt in order to survive. Today’s retail innovations are becoming more diverse, and often technology and personalization are part of them.
So, what do retail brands and marketers need to do to thrive and prosper? Here are a handful of the trends of 2019 that continue to gain a strong foothold in 2020.
In the competitive world of retail, customers now expect companies to personalize and customize products to fit their requirements. Creating personalized items has also been a great technique to promote loyalty and create a stronger connection between the brand and the consumer. More importantly, it also generates sales. One popular example from back in 2014, is the ‘Share a Coke’ campaign. By making personalized bottles the sales of Coca-Cola grew for the first time in 10 years. And it was no surprise. A study by Deloitte found that consumers are also happy to pay up to a 20 % premium for personalized products.
"A study by Deloitte found that consumers are also happy to pay up to a 20 % premium for personalized products."
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Whilst the trend towards personalization has been commonplace within the e-Commerce space for a number of years, bricks and mortar stores are now playing catch-up. Physical shops are now offering different options for customization, such as clothing with embroidery, monograms or different color schemes. Nike, for example, lets shoppers personalise their trainers, whilst Levi’s offers customised embroidery on jeans.
Brands will continue to focus on the shopper’s experience. From physical experiences to capture their customers’ attention to hi-tech treasure hunts and product discovery, brands will rely on knowledge of their shoppers and products to deliver the best offerings. A study by Gartner has shown that in 2020, customer loyalty will be driven more by experience than price and product.
Luxury furniture brand RH, for example, has integrated the hospitality experience to their stores with luxury cafes, barista bars, and entertainment spaces. Sephora’s Beauty Hubs offer digital apps to test products, browse look books and watch beauty tutorials. Our Tokinomo device is also focused on improving the shopper experience. By using retail technology that harnesses sound, motion, and light it creates a truly memorable experience for the customer — an experience that will improve brand awareness and recollection.
Many digital native brands, such as Casper, Adore Me and Allbirds are now opening physical stores, using data-driven consumer knowledge and technology to transform the experience. According to property experts, digitally native brands are set to establish 850 stores in the US within the next five years.
Whilst many argue that bricks and mortar shopping is losing importance in an increasingly digital world, this way of shopping still accounts for over 85% of global business to consumer trade. The secret to success is merging the two (in-store and online) and creating an effective omnichannel experience. This means creating a seamless brand experience on various channels. A great example is NIKEiD, a software Nike created that lets customers create a personalized sneaker online which can then be picked up offline.
AI has now trickled into many elements of daily living and retail isn't an exception. Retailers continue to invest in artificial intelligence (AI) and tools to help improve customer experience. According to one study from Juniper Research, spending on AI within the retail sector will grow to $7.3 billion by 2022. There are many ways AI is being used in retail, including the increasingly popular use of augmented reality (AR).
Last year, Coty launched a ‘magic mirror’ in its Paris boutique, which integrates physical products with digital content to create a ground-breaking AI beauty experience. Another example is the Paint manufacturer Dulux. They now have a Visualizer App, designed for homeowners to visualize how different colored paints will look on their walls before making a purchase.
With consumers becoming increasingly mindful about their purchases and choosing brands that support their values, businesses investment and focus on sustainability will continue to increase. Shoppers now assess products and brands according to company values and ethics, and they request transparency about the brand's processes. This focus on authenticity means consumers want to know more about how products are made and sold and this is a key part of brand-building and trust.
Have you started seeing these trends for your brand or shop? Have you been using any retail technology or perhaps you started improving your customer's experience, even with baby steps? Let us know how the changes are affecting your business and if you are seeing any positive results.