Top 10 Disruptive Retail Trends for 2016
Enterprise technology provider Software AG is expecting retail to become an increasingly seamless and store-centric proposition in 2016.
“The worlds of e-commerce and brick-and-mortar retail are now seamlessly merging with retailers evolving towards an omnichannel approach to their businesses,” said Oliver Guy, retail industry director, Software AG. “Mobile, cloud, analytics and social media will be fully integrated into a unified merchandising system designed to vastly improve customer engagement. The notion that ‘the store is dead’ is not, in our opinion, the future – rather, stores will become highly technology-enabled to deliver a super-personalized customer experience and become the hub of omnichannel customer-centricity. These new predictions highlight our view of the retail industry in the coming year.”
Here are Software AG’s top 10 disruptive digital trends it is predicting for 2016:
1. Brick-and-mortar stores will add fewer new outlets as they take a “hub and spoke” approach, acting as pick up and fulfillment centers with the “endless aisle” concept extending shelf space to the brand’s full catalogue of products and accessible content.
2. Customer-centric personalization will be the must-have differentiator for retailers and will become much more targeted as retailers tap into internal information, known preferences, and social media data to better understand and delight their customers.
3. Differentiation by price will be much more dynamic in nature, with real-time electronic shelf pricing replicating customers’ online experiences.
4. The complexity of omnichannel processes and how these interact with multiple systems will need further control; a kind of “mission control” center where retailers can see and control every activity across all channels.
5. Predictive analytics in retail will enable stores to know, with a great deal of certainty, what customers are going to want and when.
6. The Internet of Things (IoT) is going to revolutionize the store of the future, with its sensor-oriented devices enabling the most detailed and targeted customer centricity.
7. Futuristic technology, such as augmented reality, beacons, and anonymous analytical face detectors, will immerse customers in the shopping experience.
8. Real-time monitoring capability will be critical for the store of the future, in order to sense, correlate and automate processes from staffing to inventory.
9. Retailers will further customize and personalize instant gratification “buy buttons”, with the expectation that these will translate into higher earnings. But they will need to make strategic technology investments to ensure real-time inventory is understood and the complex processes involved in new channels are orchestrated correctly.
10. Real-time inventory visibility will dominate as retailers strive to keep the customers informed of stocks at all times. Retailers will control inventories by applying technology that shows inventory levels across all channels.
Target aims for shoppers who like surprises
Target is looking to generate excitement online this holiday season with a just-launched promotion aimed at shoppers who love subscription services like Birchbox.
Target has just launched a specially designed collection of boxes called Wonderpacks, which the retailer says are “meant to inspire and capture family fun.”
The kits, available on target.com, are curated and contain a combination of products to create experiences, from a game-packed road trip to sledding after sunset, the retailer says.
The retailer plans to release a total of 12 themed Wonderpacks including “Disco Bath Time,” to make bath time for the kiddos "way more fun," “Couch Camping,” which includes s’mores without the campfire, and more designed to appeal to everyone from children to grandparents.
Target is also using Facebook's Canvas e-commerce ads to push sales of Wonderpacks. A corresponding ad campaign will employ Canvas' full-screen mobile ads to show people what the product looks like.
To see a gallery of Target's Wonderpacks, click here.
Subscription box services like Birchbox or Target's new Wonderpacks offer a convenient way for shoppers to try different and new products without the legwork of actually going to stores and browsing. Many of these services have been thriving as their unique value proposition, which can’t be matched by brick-and-mortar retailers, appeals to more shoppers.
Nordstrom invests in on-demand custom shoe experience
Nordstrom continues to invest in new shopping models with the announcement that it is expanding its partnership with Shoes of Prey, a start-up that enables women to customize shoes online.
The department store retailer, which has rolled out Shoes of Prey design studios in six U.S. stores to date, is now an equity partner in a $15.5 million Series B capital raising round that was led by BlueSky Venture Capital and also includes Greycroft and Khosla Ventures. It is the largest round of funding that Shoes of Prey, which moved its headquarters from Sydney, Australia to Los Angeles earlier this year, has received to date.
The brand plans to use the investment to help fund omnichannel growth in the United States, and to increase production capacity in its dedicated factory in China. Looking ahead, Shoes of Prey plans to accelerate future expansion into new products, starting with women’s handbags.
The brand, which is also available on Nordstrom.com, offers a virtual design experience that places a high degree of control in the hands of the customer. The in-store design studios at Nordstrom, located in the shoe department, include a “statement” shoe wall that exhibits the variety of styles available to the customer.
With styles ranging from flats to stiletto heels, in-store shoppers use iPads to customize their selection, selecting from hundreds and hundreds of different styles, colors, materials, and heel heights. Special “shoe stylists” are also be available to guide customers through the design process. Every pair of shoes is made to order and customers may pick up their shoes at Nordstrom or have them directly shipped to their home in four weeks or less.
Especially for a high-end retailer like Nordstrom, whose customers have extremely high expectations of personalized service, this type of custom design capability could prove a crucial competitive differentiator. As Nordstrom deepens its partnership with Shoes of Prey, the retailer should also be looking ahead to the possibility of 3-D printers allowing shoes to be manufactured and delivered to customers within minutes of order, either in-store or at home.
“We want to serve customers in many different ways to deliver highly relevant experiences,” said Scott Meden, executive VP and general merchandise manager, shoes, Nordstrom. “With personalization becoming more important to how the customer views good service, it’s important for us to find opportunities to stay increasingly relevant. Shoes of Prey offers us a way to enhance and deliver a great customer service experience that aligns well with our strategic vision and long-term goals as a company.”