A look at five retail trends expected to develop in the year ahead.
Online entertainment and media retailers are doing particularly well as legal downloading and streaming services gain in popularity. The resulting losers have been high street chains like HMV, Blockbuster and Jessops.
To put web sales into context, in December 2013 they only made up 11.8% of total sales in the UK, excluding petrol (ONS Retail Sales bulletin, December 2013). However, this will doubtlessly continue to grow. The IMRG Capgemini e-Retail Sales Index, which tracks online sales, recorded a rise between August and September of 13%, the highest growth for this period in the 13-year history of the Index.
Businesses that have both a web and a face-to-face retail presence can do well by offering flexible return and collection options. ‘Click and collect’, which allows people to buy online and then collect from a local store, joins up the advantages of both ways of shopping.
To increase sales, 16% of UK SME online retailers expect to either open their own physical store or seek space in one during 2014, according to research by the Royal Mail.
Famous online brands Amazon and Google are experimenting with this too. Amazon has trialled a pop-up store in a San Francisco mall, while Google opened ‘Winter Wonderlab’ pop-up shops so customers could try out their Chromebook laptop during the 2013 Christmas shopping season.
Retail store designs are becoming more interactive, taking advantage of new technology to provide an immersive and entertaining experience for shoppers – almost as if they’d stepped into a website.
Meanwhile websites and apps are finding ways to recreate the advantages of physical stores and shop assistants:
Real-time, relevant sales data is a huge benefit for businesses in making decisions about their product range. However, a general lack of investment in IT and data management is holding many businesses back in assessing their sales analytics. Relying on gut instinct to make decisions is a dangerous approach and a missed opportunity.
Social media sites will be used by companies to decide which products to develop, through identifying popular items on sites like Pinterest or Twitter. These real-time insights are potentially quicker and cheaper than traditional market research.
Ensuring methods of payment work across multiple devices and browsers, from mobiles to iPads, will be increasingly important. Pizza Express now has a mobile app that allows diners to book a table and even pay for their meal via PayPal.
Offering customised products, for instance giving customers the opportunity to put their own message on an item or choose from a rainbow of colours, can be a way for retailers to offer something unique to customers.
Social Location Mobile (SoLoMo) marketing is a new way for retailers to send personalised offers to customers’ smartphones while they are actually in the store – known as ‘hyper-targeting’. In 2013 Apple launched iBeacon, a low-cost way to send customers in-store notifications of items around them that are on sale or they may be looking for. Businesses using these techniques must be careful not to irritate their customers!
Online food retailer Ocado has begun emailing its customers recipe suggestions based on their shopping orders. This is a cheap and clever way to give customers something personal to them, hopefully generating feelings of good-will towards Ocado.
The ICAEW Library’s Economic indicators: retail and wholesale page provides a range of reports and online resources providing quick links to statistics and commentary.
The latest Audit Insights: Retail 2014 report is available from the ICAEW Audit and Assurance Faculty. This report seeks to explore issues that may not have reached an audience outside the retail sector, as well as investigating the trends and issues that interest auditors and affect every retail stakeholder.
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