The pace of change in the retail industry and indeed customer demands is something that all retailers constantly have to adapt to. Not only are new technologies being introduced which are changing consumers’ expectations of services, but we are seeing disruptors enter the sector and push retailers even further in order to compete.
In 2016 we saw the introduction of Amazon Dash, bringing consumers one step closer to a more automated way of shopping. Uber Eats and Deliveroo this year also disrupted the market with real-time deliveries, and the recent launch of Amazon Go has the potential to change the face of the shop floor as we know it.
When looking ahead at next year, we will see the minimum wage increase come into play, and so retailers will need to think about how this affects them and how they can utilise technology to get the best out of its workforce. As well as this, the pending release of Amazon Go and a demand for more personalised and convenient services will all be significant factors which retailers need to consider and ensure they adapt to.
Here are our top five trends that retailers need to be aware of for the coming year:
The living wage increase
The increase in the living wage next year is no doubt going to have an impact on retailers and the way they operate. With the cost of staffing set to increase, this will undoubtedly impact profits and potentially business growth. As a result, retailers will want to be sensible with their spending, especially in uncertain economic times.
They will be looking for ways to manage their bottom line and reduce costs, which is where we expect to see digital transformation, automation, and robotics come into fruition. This will enable more administrative and time-consuming tasks to become automated and efficient.
Thanks to this increase in productivity, there will be more scope for employees to adapt their roles, and add higher values of service to the customer experience.
This will allow more personalised and curated shopping experiences, more shop assistant availability, and an improved experience in-store. Since expectations have reached such high levels, retailers are going to need to find ways to match consumer demands and ensure they are differentiating themselves from their competitors.
Let’s get personal
The shopping experience will come full circle in 2017, mirroring days past where retailers knew their customers on a personal basis. We have already seen the online experience master this already, and now it is the physical store’s chance. With loyalty so poor in today’s retail landscape with customers switching brands continuously, retailers need to be thinking about the personalised experience they bring in store, and the value that face to face adds to a customer journey. What needs to happen is a true integration between in-store and online to create a really personalised experience. An example of a company that is providing this new heightened level of personalisation is McDonalds as they now, through their in-store devices, permit customers to customise their orders to the last detail transforming the way people purchase fast-food.
Broadening horizons, collaboration is the key
Over the past year we have seen collaboration between retailers grow with the likes of the Post Office and WH Smith teaming up, Tesco and Arcadia doing more together, as well as the major acquisition of Argos by Sainsbury’s. Over the course of 2017 we anticipate that this collaboration will continue, as retailers find ways to maximise the in-store footprint, and see consolidation as an effective way of doing this. Collaboration also works in reverse, with physical retailers teaming up with online only players to widen their reach as we saw with Ocado and Morrison’s. Collaboration, whichever way retailers choose to do it, allows them to maximise their offering to customers and ensure that they are making themselves available at every channel. By teaming up with retailers that already do in-store or online well, they are able to deliver a better service offering and focus on delivering that customer experience, rather than starting from scratch.
The new one-stop destination
In 2017 we expect hospitality to take more of an integrated approach with retail as more destinations are created allowing consumers to shop, dine, and even catch a train all from one place. A great example of where this has already happened is Grand Central Station in Birmingham, where all three elements have come together and co-exist in a welcoming and seamless environment. As a nation the UK craves ease and convenience, so retail destinations where shoppers and commuters can do everything they need to all in one place is becoming increasingly appealing. As a result, retailers should look at establishing themselves in destinations where they can cater to those customer needs of ease and help serve their needs all in one place.
The changing face of the shop floor
The physical store and tilling as we know it needs to have a facelift. Shop processes for the most part have been the same for many years. However, the recent launch of Amazon Go has highlighted how retailers can again push the boundaries and innovate the physical store. The days of the in-store model where customers load their shopping baskets to then unload, scan, repack, and pay all of their items as they would have done fifty years ago are numbered. Amazon Go is just one example of how retailers can harness technology and embrace innovation in their physical stores to create that invaluable seamless customer journey.
Now that the level of customers’ expectations is at an all-time high, retailers need to find ways to match it and ensure they are differentiating themselves from their competitors. Shopping in-store is now very much experiential rather than transactional. By bringing in new innovative ways to shop, retailers can enhance the shopping experience to make it more interactive, and digitally enabled. Those that do will be the retailers that stand out against all of the noise in an increasingly busy and challenging landscape.