August 02, 2016
7 positive predictions for brick-and-mortar retail
By Mandy Hawkins
So you’ve done your homework and you’re beginning to see that the future of brick-and-mortar retail isn’t really all that dismal. In fact, there are some changes developing that are worth getting excited about. We have seven predictions for brick-and-mortar retail that indicate positive progress for the consumer journey and retail longevity.
1. Retail sales will continue to steadily grow.
Who doesn’t get excited about the words “steady growth”? After all, that usually means healthy, sustainable growth. According to Kiplinger’s second quarter results, retail spending made gains, and their prediction is for stable growth in 2017. Of course online retailers still hold a significant market share, but there is still a necessity for in-store purchases for a myriad of reasons: experiential shopping, tangible try-ons, the in-store experience, social shopping, and, of course, the instant gratification of taking your purchase home with you. 85% of consumers still prefer in-store shopping over online.
Millennials aren’t the only demographic effecting this gain, although they will represent about one-third of all dollars spent in the next few years. Baby Boomers and the growing Hispanic population also represent consumers with spending power. The bottom line: With a vast demographic of consumers ready to spend their income, brick-and-mortar retailers could continue to see positive growth.
2. Iot integration and “phygital” stores will be key to captivating customers.
...And bringing them back to your store. No, this is not a bad rendition of an Olivia Newton John song, it’s a brilliant way to merge the digital and physical experience for customers, and it’s going to be a game-changer.
When a customer can enjoy the satisfaction of a physical experience, combined with the limitless possibilities of a digital experience, the customer is likely to become a loyal fan. When a golf retailer got “phygital,” allowing customers to test their swing on a digital tee, they increased sales by 50%. That’s something to sing about!
3. Brick-and-mortar retailers who embrace omnichannel will be embraced by shoppers.
In particular, omnichannel retailers will win the digital natives and ever-growing pool - no, ocean - of mobile users. They SHOP, but they want to do it their way. “Omnichannel” should be a key word in the vocabulary of every brick-and-mortar retail brand that wants to see sustainable growth.
If the customer journey involves mobile technology (and it does), doesn’t it make sense to ensure that their experience is seamless between the digital and physical landscape?
How do retailers begin to embrace an omnichannel approach? According to Barnes & Noble’s Chief Digital Officer Fred Agir, it all begins when you understand how your customers want to shop. Once you know that, you figure out how to create the omnichannel experience for your brand and your customers to let them shop they way they want to.
4. Brand identity is more important than traditional retail tactics.
Playing pricing games, showcasing the highest quantity or biggest selection, and other over-used strategies for winning sales and customers just aren't as effective. Customers are more likely to be attracted to quality and personal value over an unknown bargain, but retailers must learn to listen to customer wants and needs.
By implementing a data-driven approach, emphasizing the value of the brand for the customer’s specific needs, and communicating that message across multiple channels, brick-and-mortar retail will build loyal customers who will certainly be spreading the message to their digitally-connected network.
5. Retailers who study and invest in great customer loyalty programs will succeed.
Retailers who commit to learning who their customers are, what they want and need, and how to best deliver those needs will gain a competitive edge. Loyalty programs need to be personalized and based on a relationship with the customer, not just data, in order to succeed.
The approach should be omnichannel, viewed as a way to create community, and seen as an emotional connection point for the customer. Bottom line: customers want to know there is a point to all of those points they’ve earned.
6. Data security will become an even more important topic for retailers of all sizes.
Nothing is more unnerving than knowing you could potentially be affected by a data breach. If the customer has provided data that ultimately effects the retailer’s bottom line, and their personal information is compromised, it is assuredly the end of that customer’s loyalty.
According to a Verizon Report, 6% of all data breaches in the US were retail-related. The National Retail Foundation is committed to increased security for customers, and wise retailers will be ready to enact all necessary security measures.
7. Retailers will learn to really, truly use all that ‘big data’ they’re collecting.
They’ll become more discerning about the digital tools/tech they integrate … and they’ll start providing immersive, personalized customer experiences that make shopping in-store a fun game that everyone wants to play.
Collecting data is about more than just knowing that shoppers are consistently buying XYZ Brand during specific cycles; it’s about taking that data, and showing some love to the willing-to-share customers. When customers feel the love, they’re going to return again and again. Maybe they’ll be digital customers. Maybe they’ll utilize the conveniences of brick-and-mortar. But if a retailer is smart, they’ve built a long-term, omnichannel relationship that will stand the test of time.