Predicting the Top 9 Retail Trends for 2018
Now, retail is a relationship instead of a series of transactions. Technology is the great equalizer and the consumer is at the center of the new retail ecosystem.
The rise of e-commerce and customer experience has changed the face of retail. In its very early days, retail was built on a barter system. Now, retail is a relationship instead of a series of transactions. Technology is the great equalizer and the consumer is at the center of the new retail ecosystem.
Niall O’Gorman, ChannelSight’s CCO and co-founder, talks through some of the biggest trends we can expect in retail for 2018.
1. The marriage of Omnichannel and technology will drive sales
As a multichannel approach to retail, omnichannel provides an integrated shopping experience for the consumer. The idea is simple: give the customer a seamless retail experience between their channels, i.e. from their desktop to mobile phone to in-store experience.
For example, a shopper might start their transaction on desktop before later moving to mobile and then making the final purchase in-store. With omnichannel, the initial first touchpoint shouldn’t matter as the experience should be the same across every channel.
Of particular interest is Pointy, an Irish start-up which raised $6 million in funding in September 2017. Leveraging digital to drive in-store sales, Pointy’s tech links in with barcode scanners. Every time a product is scanned, Pointy automatically generates a web page for the item with real-time, localised product information. “The power of this is huge for smaller retailers which lack resources. This little widget is essentially a piece of plastic that plugs into the till and scanner.”
2. Personalisation will continue to grow
Personalisation is a tactic that small brands are using to go toe-to-toe with megaliths such as Amazon. The avenues for personalisation vary: it could be as simple as personalised packaging or as large as printed products with thousands of name variants, as Coca-Cola did with its Coke bottle campaign.
Digital personalisation is taking off too, with personalised video’s building momentum. One such example is Treepodia, a personalised video platform, that create real-time, shoppable video content. An example of some of Treepodia’s work is a video recipe for Cadbury – which worked to great effect.
“If you visit a site, you might see a slightly different version than someone else. The imagery, the messaging, and the promotional mechanics can be personalised around you.”
Likewise, websites are becoming increasingly personalised to users. Content is smarter with products and information changing to suit consumers’ past browsing habits. It could be as straightforward as providing similar products to once the user purchased or as complex as changing the call-to-actions relevant to the buyer’s purchase patterns.
3. Consumers are driving an information-economy – but rules will apply
Where websites were once linear, brands increasingly need to know who they are talking to – and how and when consumers want to be talked to. The array of pixels, cookies, and smart content/targeting allows for that – but there’s a caveat.
“Consumers now have the power,” Niall says. “They’re more in control. It’s going from the brand being king to the consumer being king. It’s the consumer choosing what level of contact, promotion, and content they want to be exposed to by brands, retailers, and organisations.”
For example, consumers can opt-in or out of your newsletter on a whim or they can choose to ignore or interact with your online advertising relative to how interesting it is to them. With so much choice for purchasing, consumers can afford to be flaky – someone else is probably selling the same thing for a comparative price.
With GDPR coming in in May 2018 this means that brands, publishers, and media companies will need to reconsider their opt-in processes and how consumer data is stored. Retargeting and hyper-targeted content are useful, but could be considered invasive – which in turn, reflects in the rise of AdBlock.
“There has to be balance between personalisation and privacy controls and data regulations,” Niall reasons. Brands need to accept that the path to purchase is no longer linear. Consumers are choosing how and where they convert.
To be truly effective, brands need to move away from the idea that social is strictly for selling. Social is a platform built on engagement and – if implemented correctly – has the potential to build long-lasting relationships with customers. It’s part of the reason why ‘Buy Now’ buttons are so powerful. When placed contextually and into a relevant step in the purchasing path, they can be the missing link for consumers to make the final step to conversion.
4. Voice search will gain wider proliferation
Voice search gained steam in 2017, but it’s still on the cusp of being mainstream. Where voice search on mobile is useful in the car or when you’re handsfree, the true benefit comes with IoT and smart homes.
It’s a simple equation that places retail at the tail-end. ChannelSight recently worked with Hi Mum! Said Dad to showcase the potential of the connected home in the FMCG space for FrieslandCampina. An app was created to link a fridge with reactive recipe suggestions.
It starts with a voice query: “Hey, Alexa, what’s in my fridge?”
Alexa and the smart fridge pair in real-time and the chatbot springs to life, asking if you’d like a recipe suggestion and later reading out the ingredients you’d need. You can then automatically make an order to replace the produce, down to payment and delivery.
Of course, as the technology progresses, the capabilities will go further: your oven may even begin to pre-heat based on when you want to make dinner.
5. The rise of conversational commerce
Chatbots bridge the gap between consumer and call centre by offering pre-programmed information on returns, pricing, size, stock, and promotions. In a recent project with Duracell, ChannelSight created a shoppable chatbot that was hosted on Facebook, giving consumers another conversion path.
Chatbots have the capabilities to look like a real person and speak naturally. Crucially, they can hand over to a human if necessary. “The benefit is clear,” Niall says. “The customer service team can spend longer and have richer conversations because they know that the virtual version of them can answer basic queries.”
It applies to omnichannel too, and the idea of conversational commerce. A consumer talk to a chatbot and then moves in-store. Their smartphone activates a beacon which pulls up the consumer’s details. The floor staff or salespeople will then see the important details of prior conversations and can take over from there.
6. Reality is virtual
The big drawback of virtual and augmented realities has been the slow adoption of its hardware and understanding of the differences of what each technology offers. For gaming and immersion, virtual reality works – but the headset can be a drawback for anyone wanting to passively experience something.
On a macro scale, augmented reality has a long way to go but it can translate in-store. If you’re walking into a store and you hold up your phone to find a certain item, your phone can activate to give you that information. Fashion and FMCG are also seeing the beginnings of AR adoption. Converse released the Sampler mobile app in 2016 where consumers could ‘try out’ the shoe on-foot by pointing their camera at their foot.
While the technology is still in development, expect a wider uptake in 2018.
7. The instore visit will be experiential
The format of the typical store is changing. Retail owners need to consider their shop’s role in the overall framework of how they attract, interact, and retain consumers.
Much consideration comes down to space and its utilisations. For example, Lidl’s AW17 fashion collection with Heidi Klum featured across small pop-up stores. As omnichannel grows, retailers will need to consider if they require a large physical store or if something more akin to a virtual showroom will suffice.
Make-up giant, Sephora, is known for its large storefront with rows of multi-brand product. However, in mid-2017 it launched its first Sephora Studio in downtown Boston. A much smaller affair, the studio aims to provide an intimate experience for consumers.
It’s all about finding the right balance for consumers and their shopping preferences. “There are so many different dynamics as to why someone might want to buy something in a given moment,” Niall says. “The worst thing you can do is try and sell something when someone doesn’t want to be sold to.”
8. The Internet of Things will change the face of delivery
When you think of advancements in delivery, you might think of drones. In practical terms, a sky full of drones is never going to happen. However, ‘ground drones’, or IoT-enabled mobile units, will likely be the future of delivery. Amazon has shown intent with the release of Amazon Key, a high-tech package delivery system. The idea is to create an Amazon-enabled delivery ecosystem: install the Amazon camera and lock on your home, and make your order.
The delivery person comes to your house, enters the code, and is given access to complete the delivery. In the future, it may even be a case that a drone could navigate its way to a consumer’s car for package delivery. A code would be sent to the customer’s phone for verification, they’d okay the delivery, and the car boot would pop open to accept the parcel.
The response, however, has been divisive: most Amazon Prime subscribers actually said that they don’t want to buy the Amazon Key to grant access to their homes. “If you think of it from a volume perspective and you want something to be really effective,” he says, “a lot of these things [in the IoT space] are just show and tell: shiny objects and innovation for PR. But from that comes innovation that becomes mainstream. Many of these advances then become the go-to and are used in home systems and security.”
However, Amazon don’t yet have the monopoly they may have envisioned: in September 2017, Walmart announced a partnership with August Home, a smart lock start-up, that would allow a delivery person enter a customer’s order, deliver their groceries, and even put them away in their fridge. Since January, an Estonian start-up, Starship Technologies, has been using robots to deliver food to doorsteps in Silicon Valley and Washington, D.C. While the future may not see swarms of drones, robotic deliveries are a foregone conclusion.
9. Influencer transparency will be a big shift in retail for 2018
Influencer marketing has taken a beating in the last six months, having reached critical mass (and critical disapproval). However, from a brand perspective, influencer marketing is still laden with potential – especially in instances where the brand is new and its awareness doesn’t yet exist.
To see ROI, retailers will need to look at the mechanics of how influencer and brand co-exist. As Niall says, it’s all about accountability. “There have always been influencers,” Niall points out. “It’s not a new medium. Just like there have always been rockstars and musicians and actors.”
It’s not so much about big influencers anymore, but leveraging brand advocates. “It’s democratising what an influencer can be,” Niall says. “It’s not the few; it’s the many. An individual can be an influencer if they’ve got something to say that people are interested in.”
The results speak for themselves too. ChannelSight worked with drinks company, Tassimo, to mobilise the power of user-generated content. Product pages enriched with user-generated review videos saw a huge uplift and brought a:
- 74% increase in add-to-basket conversion rate.
- 161% increase in session duration.
- 127% increase in pages per session.
User-generated content (and influencers) are great for providing social-proof, but brands still need to hold their influencers accountable as the digital landscape is in the midst of a reformation of metrics. It echoes in the biggest retail trend of all: the consumer is the heart of the new retail ecosystem – but that offers a window of opportunity for retailers who are willing to embrace it.