The retail news of 2017 often seemed to be dominated by negativity — stores failing, declining revenues, and shopping mall closures — but many positive trends also developed. Retailers are embracing technology to help meet expanding customer expectations. As you plan to grow your business in 2018, it's important to understand what we saw through the retail industry trends of 2017.
Top Trend for 2017: Smart Technology and Omnichannel
While each type of retailer has faced different challenges, the greatest demand across the board is meeting customer expectations. Amazon and other large retailers have set the bar high, and competing can feel like a Herculean feat. Perhaps the biggest story of 2017 was that retailers began using technology to help level the playing field and find ways to stay competitive rather than throwing in the towel to the giants.
Here are the five top retail industry trends of 2017:
Customers now expect personalized outreach and are frustrated by brands that don't adjust their offers and messaging based on their preferences. Today, personalization means more than simply using a customer's name in emails or having a "Recommended Products" section on the website. Customers want the same level of personalization online as they find in local brick-and-mortar stores. Retailers have recognized that providing this level of personalization doesn't just increase customer satisfaction, but sales as well.
2017 saw retailers commonly using personalized coupons, offers, and even web content. Many retailers now customize the images and products customers see when visiting their website based on that individual's preferences. Because personalization is only as good as the customer data available, retailers have focused on collecting customer data. Since online-only retailers do not have personal contact with customers, they continued to get creative by collecting data through social media, customer service calls, and other consumer data sources.
2. Artificial Intelligence (AI)
AI helped some retailers create their customers' expected level of personalization in 2017, but the technology was out of reach for many organizations in this market. Now, instead of having to customize algorithms and code to create homegrown AI, retailers have many out-of-the-box solutions they can integrate into e-commerce platforms. This trend began in 2016, but this was the year AI became the tool retailers of all industries and sizes have come to rely on to level the playing field and provide the level of personalization customers have come to expect.
Until recently, many retailers operated different channels (such as stores, mobile, customer support, websites, and social media) independently. This meant that if a customer interacted with a brand on multiple channels, they had a different experience each time. While omnichannel has been considered important for a while now, retailers began prioritizing this effort in 2017, with omnichannel experiences becoming standardized and more sophisticated. Brands now operate as one unit with information, personalization, and experiences shared across all channels. The result: Brands that are not providing a true omnichannel experience may now be at a real disadvantage.
4. Integration of Online Stores and Physical Stores
Continuing with the omnichannel trend, 2017 was the year retailers took the omnichannel concept to the next level and began integrating brick-and-mortar stores and online outlets more tightly. This was especially true for distribution methods. More retailers began offering ship-to-store or instore pickup options, and more physical stores began ordering products for customers online. This trend is likely to continue and expand in 2018, and could lead to more showroom concept locations — smaller stores with less inventory on hand that integrate online ordering even more. Showrooming works best for goods that are unique, such as furniture, home accessories, and fashion.
5. Digital Wallets
Finally, in 2017, more retailers began accepting payment by digital wallet, which includes apps such as Apple Pay and Android Pay. Small vendors, such as mall kiosks, farmers markets, and food trucks had already offered this alternative, but larger retailers also began supporting digital wallets in 2017. Online retailers continued to add alternative payment options, such as PayPal and Visa Checkout. This trend will continue to grow to the point that digital wallets will eventually become the standard payment method for many people.
As 2017 draws to a close, retailers must continue to look toward the future. It's impossible to predict exactly what customers will expect in 2018, but retailers that embrace and implement tools that allow personalized and seamless experiences to be created will come out ahead.
Contact Vonage Business to learn more about how omnichannel experiences and personalization can aid your company in 2018 and beyond.