The Changing Face of Retail in 2013
February 19, 2013 2 Comments
Amazon, Crocs, Kohl’s, Lululemon were recognized by the National Retail Federation Board as innovators and leaders in retail industry because they successfully distinguished themselves as pioneers through the use of new, innovative or imaginative techniques, formats or services that are sustainable and can evolve with the industry. These awards celebrate individuals/businesses who have achieved international recognition for excellence in their native country and internationally.
Following the lead of these star performers, the retail industry strives to respond to consumers as they begin to get back their shopping appetite. Marketers look for newer, better ways to grow their brands and take advantage of marketing opportunities to better compete. Here’s a countdown of the top six trends that will drive the retail industry this year:
1. Social commerce: Where are people spending majority of their time online? Social media. Retailers have recognized this and integrated social media and e-commerce. A recent survey from social media curation platform provider Mass Relevance revealed some interesting facts:
- 59 percent of respondents reported they are more likely to trust brands that integrate social media.
- 75 percent of social networkers talk about brands; for 18-34 year-olds it is 91 percent.
- 62 percent are more likely to engage with social brands.
- 60 percent are more likely to share the messages of brands that integrate social experiences into their own digital properties, such as a brand websites or mobile apps.
- Where social commerce is concerned, nearly two-thirds (64 percent) have already made a purchase based on social content; that was true of 76 percent of 18-34 year-olds.
Retail websites are using the power of social media to drive sales. The model is designed in a way where shoppers browse through the shopping website, share their favorite products with friends and family through a social media plug-in like Facebook, Pinterest, etc., and get reviews that help them decide whether to buy or not. Consumers pay more attention to brands that create social media experiences and spend more time on websites when social media is integrated.
2. Using mobile to research and buy: Mobile has invaded retail sector at a mind-boggling speed. In a short time, QR codes, mobile coupons, mTickets, and in-store guide apps have become the norm of retailing. The technology has transferred the power into customers’ hands with the ability to search for product information, post reviews, look up store locations and make actual purchases. A recent Shop.org survey found that nearly half of retailers have an optimized mobile sites or smartphone apps, with 16 percent planning to increase their investment in mobile technology.
Here are some facts from digby.com on how mobile is influencing today’s retail industry:
- 80 percent of smartphone owners want more mobile-optimized product information while they’re shopping in stores.
- 68 percent of men are likely to make purchases thanks to mobile ads, whereas 58 percent of women are likely to make a purchase. Further, men are more likely than women to redeem mobile coupons (35 percent versus 27 percent).
- Mobile coupons are most popular at grocery stores (41 percent of mobile shoppers said they used coupons there), department stores (41 percent), and clothing stores (39 percent). At electronics stores, the majority (read reviews (73 percent), compare prices (71 percent), and scan QR codes (57 percent).
- 80 percent of mobile users prefer locally-relevant advertising and 75 percent are more likely to take an action after seeing a location-specific message.
3. Expansion to newer markets: As shoppers in mature markets continue to be hesitant buyers post-recession, they need to be lured with discount offers, coupons and ability to comparison shop both online and offline to help build the trust of this extremely value-driven market. Moving into emerging markets is an amazing growth opportunity, as such markets offer less competition along with customers who are curious and have a relatively high spending power. “Global expansion is no longer a ‘nice to have’ but a ‘must’ to overcome slowing growth in core markets,” said Hana Ben-Shabat, a partner at A.T. Kearney, and co-leader of their study. All the infrastructure-building activity has played a role in helping to drive a growing middle-class economy. With more disposable income and a young population that is concentrated in urban areas, the conditions are ripe for retailers. Some of the most promising new markets for high growth include countries such as Botswana, Georgia, Oman, Mongolia and Azerbaijan.
4. Increased video use: As Matt Lawrence, creative director of Studio at Huge says, “Companies need to realize that video has become the primary channel for consuming content online. Quality video content balances information and entertainment that viewers can relate to their daily lives, on a visceral level. The word of the year for 2013 is story.” Many of us are concerned about adding videos to our marketing because it slows down the customer experience. But this concern is slowly vanishing with internet connectivity becoming better and faster across the world. Retailers are much less restricted by broadband rates and have the freedom to use richer media content than ever before.
The biggest discussion that marketing teams across the globe are having is “how to make videos engaging”. A great example is the e-commerce video released by Barneys New York for their women’s and men’s spring 2012 collections. The twist in the video comes with models telling funny life stories, dancing and singing, all while wearing the latest looks. Interactive product thumbnails of the items being worn pop up throughout the video allowing shoppers to buy the clothes the models are wearing straight from the video. Video commerce solutions provider Liveclicker was used to create this interactive shopping experience.
5. New Google algorithm: With updates in Google’s Panda and Penguin releases, websites with decent content, well-developed platforms and authentic social media engagement can now hold their own and don’t necessarily have to rely on the work of good link-builders. This makes the industry more of a level playing field. SEO doesn’t just map the website content but also takes into account social media activity, including actions of Facebook fans, level of engagement on blog posts and responses received on LinkedIn discussions. This is a major reason why having a balance between SEO and social is so important.
6. The rise of responsive design to target multiple device users: With research indicating that 58 percent of the UK’s population now own a smartphone and 19 percent own tablets; responsive design has become ever more essential when we’re building websites. Responsive web design is a methodology that takes advantage of a fluid grid to allow optimal viewing experiences, regardless of the device websites are viewed on. With the tablet market rapidly increasing, it really is imperative that websites are now built using responsive web design, so that the user experience is never compromised.
As the evolution of technology sparks seismic shifts in the retail industry, what other trends you think are shaping up the retail sector to make it more customer-friendly and interactive?