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The future of retail: 6 growing trends in retail

The future of retail: 6 growing trends in retail

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One thing to remember about the future of retail is that it’s not a question of whether consumers are shopping online versus at a brick-and-mortar location. Instead, it’s about how internet-enabled technology will improve the consumer’s experience on all shopping paths, whether they’re on the internet or in the shopping aisle. Treating both as part of the same marketing strategy is beneficial, as evidenced by the fact that opening a new physical location increases a store’s website traffic by an average of 27%. Brick-and-mortar and e-commerce can complement each other. The future of retail will be all about blurring the line between the digital and physical space. 

Mobile will be a crucial aspect of these omnichannel experiences as it will be used as a vehicle for delivery. Already, mobile is edging out desktop in terms of internet usage, with 57% of traffic coming from mobile devices. Brands and retailers that want to market to these users need to be where they are, and that’s on mobile. Due to that, many predictions on the future of retail center around devices that travel with consumers. 

#1. Deep Learning Will Drive a Shift Towards Discovery Shopping

Deep learning algorithms that track consumer purchase patterns, preferences, location, and interest will enable retailers to provide more proactive recommendations. Even something as simple as the consumer’s facial expression could be used to determine customer satisfaction and offer guidance to improve experiences. 

This data is crucial in supporting the growing trend of discovery shopping in the digital space. In the past, consumers who shopped online typically searched based on a specific need. Now, however, they may be driven to buy based on information they see on social media or via a digital lookbook. Essentially, it’s a form of digital window shopping that allows consumers to view a wide range of products.  

These consumers aren’t looking to fill a specific need. Instead, shopping is a leisure experience where consumers browse for fun. Using data to better curate content increases the chance that these browsers will be intrigued to make a purchase. With discovery shopping, brands should focus on creating an engaging user experience which drives consumers to interact with their products in a digital space.
In a way, Amazon’s Prime Day could be considered a form of discovery-driven shopping. Consumers who follow the platform on Twitter will see notifications about deals on specific products. This drives interest and improves purchase intent. The platform also uses data to send notifications to mobile users who’ve purchased similar items before. Finally, it engages users by building up the products and not announcing the sale until the exact moment of price reduction.  

#2. Rapid Delivery Will Aid E-Commerce Leaders in the Future of Retail

Same-day delivery is no longer an added service. It’s something consumers expect. Twenty-five percent of consumers report they will abandon their online shopping cart if same-day delivery isn’t an option. Retailers enhance their distribution options to respond to this demand. They open more centers in various locations to serve a growing pool of consumers who demand immediate services. However, investing in a massive distribution network isn’t always an option. In those cases, retailers turn to one of three options: 

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For consumers who must have an item on the same day they order it, offering an option to buy online and pick it up at the store is ideal. Not only does this solution satisfy the same-day delivery need, but it also gets them to go to a physical location and possibly purchase more.

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Curbside delivery:

For some consumers, the inconvenience of walking into the store and waiting in-line is enough to make them abandon their cart. However, curbside pickup, where consumers can park in a designated spot and have their items brought out to their car, resolves this issue. This is a low-cost solution which provides the benefit of same-day delivery without the added expense.

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Third-party partnerships:

Some retailers are choosing to partner with third-party delivery services like Lyft to offer same-day delivery to consumers. This is especially popular in the grocery sector, as consumers are willing to pay more to receive perishable items the same day without the need to go to the store.

As demand for same-day delivery increases, so will the options for providing this outside of traditional mail services. Partnerships are likely to expand, which will enable stores to find more unique ways to offer this feature to consumers. 

#3. Brick-and-Mortar 2.0 Will Tie the Digital to the Physical Space

While online retail is popular, it’s still only expected to account for 20% of sales by 2025. Brick-and-mortar locations will still make up the brunt of transactions, but they’ll shift to support an increased need to be digitally connected during the path to purchase. This is the beginning of brick-and-mortar 2.0 and mobile optimization is needed for its success. 

Mobile connects consumers to the internet while they’re also browsing the shopping aisle, which exponentially improves the ability to market. Retailers and brands don’t even have to invest a lot of money into proprietary apps to make this happen. They can look to third-party partnerships. 

This is one of the reasons many brands choose to work with Shopkick. Shopkick partners with brands and retailers by giving them access to our highly engaged user base, which improves in-store engagement with products. This was the case when Rimmel London partnered with us on a campaign that leveraged consumer’s mobile phones to direct them to products in the shopping aisle.

Consumers could scan participating products with their phone’s camera and receive kicks (rewards points) which could later be redeemed for gift cards. Overall, this engagement helped the brand increase its market share in participating stores by 14%.

A plethora of options is available for brands who wish to partner with third parties to enhance in-store experiences. They should seek out those with a strong base of active users to garner the best results. 

#4. Technology Will Enable More Self-Driven Customer Service

Consumers in need of assistance with a product prefer to help themselves before they seek the aid of an associate. In fact, 67% of consumers prefer self-service over speaking with a company representative, with 75% noting it’s the most convenient way to resolve customer service issues. There are many options to provide these services, which vary widely in sophistication. Here are a few:  

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Forums are probably the least sophisticated option, but they’re still a solution for helping customers help themselves. Individuals can publicly post their questions and receive answers from the company as well as from company personnel.

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Basic FAQs:

It’s crucial that all companies have some basic questions listed and answered if they’re frequently asked the same questions. These are often the first stop for a consumer with a problem, and when their issue is covered, the fix is simple.

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Interactive FAQs:

Smarter FAQs can take consumers through a series of questions to best determine their issue and help them resolve it. These troubleshooting programs are excellent for self-service as the individual gets a customized answer without the need to reach out to customer service.

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Sophisticated chatbots:

Chatbots have become so sophisticated that often, consumers don’t even know they’re talking to a computer program. These chatbots run on data which is analyzed for context and can guide them to the best solutions for these answers. As artificial intelligence grows, these bots will only become more sophisticated and capable.

The need for consumers to have access to self-service assistance is also a boon to retailers, as they save time and labor costs in responding to customer inquiries. By providing methods where consumers can get most of their questions answered, retailers and brands build affinity and prevent poor reviews due to response delays.

#5. Direct Sales Will Increase Across All Categories

The reason challenger brands have seen so much success is that they’ve been able to cut out the retail middle man by leveraging the internet to sell directly to consumers. This isn’t a strategy that works for all brands, as the product must be unique or offer an added service. 

Russel Stover is one such brand that has a unique selling point which works to drive direct sales. While the brand offers its pre-packaged candies in the store, consumers can also visit their site and make use of their “Build-a-Box” service to create customized treats. This provides added value to the product and encourages consumers to purchase directly from the brand.
Customization will drive a shift towards direct sales for all brands. The hardest-hit categories are likely to be items that consumers either buy on a schedule, like razors and vitamins, or need assistance buying, like baby care products. Brands in these categories should begin exploring direct sale options now to prepare for the future. 

#6. Online Search Will Move Beyond the Screen

It’s estimated that by 2020, 30% of all searches will occur without screens. This is largely interpreted to feature voice search but could also include more immersive categories like virtual and augmented reality. These new types of searches could present a paradigm shift for retailers, who have relied heavily on keyword-based text searches in their digital strategies. 

While this is a difficult category to predict, retailers should begin to focus on market leaders who gain the most attention from consumers in relation to their screenless experiences. Amazon, for example, is a market leader when it comes to smart speakers, which is why brands would do well to improve their listings on the Amazon platform to prepare for voice searches. 

Augmented and virtual reality are a bit more difficult to pinpoint as so many companies are delving into these areas. However, we can expect to see some movement from major retailers. Walmart, for example, has already filed patents for at-home virtual reality shopping experiences and it’s likely other retailers are developing their own solutions.
Of course, consumer adoption will play an integral role in how lucrative these new search options become. Voice was slower to take off as consumers haven’t quite gotten over the learning curve. Virtual and augmented reality will probably face the same issues. The screenless searchers retailers will see over the next few years will stem from early adopters and their retention rates will help them determine if the avenues are worth pursuit. 
Digital experiences that work both in the store and out are the future of retail. Today’s brands and retailers are leveraging better technology to provide faster shipping and aid customers. They’re also boosting their marketing results with better direct sales options, in-store mobile experiences, and updated features like voice search and augmented reality. All of these options improve the customer experience and can be used to enhance sales along with market share. 
Shopkick aids our partners in capitalizing on the future of retail by providing an innovative app with an active user base. For more information on how our app increases shopper engagement, see some of our success stories.  



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Dima Volovik

EVP of Product and Engineering

Dima Volovik is the EVP of Product and Engineering at Trax Retail — Shopkick.

Dima Volovik is the accomplished product and engineering leader who led teams to deliver innovative and commercially successful e-commerce products, marketplaces, and enterprise solutions for Amazon, Comcast, Fandango, and Universal Music. Before joining Trax, Dima was the Director at Amazon, where he led product development and Engineering for Amazon Appstore and Amazon Prime Video, CTO at Fandango, and Paciolan, head of technology at Golf Channel/Golf Now, and Global VP of Direct to Consumer Technology at Universal Music Group. Dima’s expertise includes developing consumer products, marketplaces, and enterprise solutions.

Dima grew up in Baku, Azerbaijan, where he received his MS in Electrical Engineering from Azerbaijan Oil Academy, and he currently resides in Los Angeles, California, with his family.