The Future of Shopping: FIVE Predictions for 2017
As we move into the new year, it’s time to look ahead and predict what’s in store for the retail industry as it races to stay relevant in the Age of Amazon.
Here are five predictions to keep an eye on in 2017:
1. Retailers will invest heavily in transforming brick and mortar stores into mini-fulfillment centers: For the first time ever, online shopping outpaced in-store during Black Friday weekend this year, signaling a shift that we’ve seen coming for years. As the scales tip, traditional retailers will need to act fast to capitalize on the biggest advantage they have over their online pure-play counterparts: physical stores themselves.
By building “connected” stores that blend the digital and physical experience – allowing them to effectively double as flexible fulfillment centers – retailers can capitalize on their decades-long investment in building stores along corridors where people live, work and play. Retailers will also be keen on finding ways to equip their associates with tools that help pick and pack effectively for these programs, without adding extra burden to their current workload.
2. Retailers will want to provide more last-mile fulfillment options: Brick-and-mortar retailers will find new ways to meet the demands of their customers. Retailers will begin to invest more heavily into curbside pickup, as well as delivery through partnerships with companies like Uber and Postmates. As Amazon is reportedly planning no-checkout grocery stores where customers are automatically charged for their items through a combination of AI, computer vision and data pulled from multiple sensors, it further increases the urgency for retailers to act and innovate quickly.
3. New in-store experiences will draw shoppers to stores: As in-store sales decline in proportion to online sales quarter after quarter, retailers will develop new programs and incentives to build a better in-store engagement model with customers. One such idea is Nordstrom and is called Reserve & Try, where customers select merchandise through their mobile phone and have it placed in a dressing room so it’s ready and waiting when they arrive, with their name on the door. Experiences like this that expedite the shopping process will be key for retailers in 2017.
4. The true costs of same-day delivery will become apparent: On-demand delivery services have been popular in major cities around the country, however much of the true delivery costs have been subsidized. Net shipping losses are high.
As the subsidies come off, consumers that do not live in dense urban areas and are outside the highest income brackets will be resistant to added fees, opting instead for alternative, affordable fulfillment options that fit seamlessly into their day-to-day lives. On-demand delivery services will need to get creative to offset their fees or risk encountering major scaling issues.
5. Shopping malls will be reimagined: Similar to stores being reimagined as hybrid fulfillment centers, malls will need to evolve to meet the changing demands of today’s shoppers who increasingly are opting for faster and more efficient experiences.
In 2017, we’ll see an increase in in-mall interactive experiences, entertainment and designated spots to pick up orders from multiple stores – much like the Curbside Pickup Pod in Los Angeles.
Jaron Waldman is CEO of Curbside, which makes it easy to find, buy and pickup products at nearby stores.
Home improvement giant taps veteran as finance chief
Lowe's Companies has promoted a 20-year company veteran to CFO.
The retailer announced that Marshall A. Croom will succeed Robert F. (Bob) Hull Jr. as chief financial officer, effective March 3. Hull plans to retire after 17 years with the company.
Croom has served as chief risk officer for Lowe’s for the past eight years, with responsibility for providing oversight and direction for the management of all material risks across the company. Prior to leading the risk organization, he held several leadership positions in finance, including senior VP of finance, treasurer and assistant treasurer, including responsibility for investor relations and tax.
In addition, he served for three years as senior VP of merchandising and store operations support. Croom joined Lowe's in 1997, following a successful 11-year career with Ernst & Young, including two years in the firm's national tax department.
Retail fraud attempts up substantially
Retail sales weren’t the only thing that rose during the 2016 holiday season.
Fraud attempts increased by 31% during the past holiday season, according to data from ACI Worldwide, which, on the positive side, found the number of overall transactions increased by 16%.
The survey data, based on hundreds of millions of transactions from global merchants during the 2015 and 2016 holiday shopping season (starting on Thanksgiving and ending on Dec. 31) highlights key shopping — and fraud activity — trends.
ACI ReD Shield, a premier CNP fraud detection and prevention solution for e-commerce merchants, processed 7% of Black Friday’s online spend and 13% of Cyber Monday’s total online spend.
Principal findings include:
• From Thanksgiving to Dec. 31, 2016 compared to the same dates in 2015, the number of e-commerce transactions grew by 16%, while fraud attempts grew by 31%.
• Fraud attempt rates were highest on Christmas Eve (1.6 %), Shipment cutoff day (1.5%) and Shipment cutoff—express (1.7%). The trends driving these peak fraudulent days include shipment cut-off and buy online pick-up in-store.
• Average ticket price of an attempted fraud transaction decreased by 7% ($228 in 2016, down from $243 in 2015).
Reduced shipment price, low-priced electronics and promotions are driving this trend.
• During the 2016 holiday shopping season, the number of fraud attempts based on total population increased compared to the same time in 2015. In 2016, one out of every 97 transactions was a fraudulent attempt. In 2015, one out of every 109 transactions was a fraudulent attempt.
“Over the 2016 holiday shopping season, merchants experienced significant growth in their digital channels, coupled with a substantial increase in fraud,” said Markus Rinderer, senior VP, Platform Solutions, ACI Worldwide. “Given the consistent and alarming uptick in fraudulent activity on key dates, merchants must be proactive in their efforts to identify weak points — and define short and long-term strategies for improved security and enhanced customer experience.”