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2017 Retail Predictions: Digital Gives Market Share Back to Brick and Mortar

Posted by Jason Smallheer on 1/17/17 5:30 AM
Topics: Higher Ed, college retail, Marketing to Students

Retail sales in 2016 were dominated by eCommerce and technology driving purchasing decisions. The forecast for 2017 predicts some of the same, but there is light at the end of the tunnel offering opportunities to the brick and mortar store owner.2017 Retail Predictions: Digital Gives Market Share Back to Brick and Mortar2016 retail sales topped more than $110 billion, driven primarily by eCommerce. Technology was the top reason retail numbers have grown at the highest rate since 2005. Consumers armed with smartphones and connected devices can make purchases while watching television, have the ability to comparison shop by scanning a barcode while in your store and simplistic options to pay for purchases have shifted shopping leverage away from the retailer and to the customer. Sam’s Club currently offers its members “Scan & Go.” Using a smartphone’s camera, consumers can scan the barcodes of items in their shopping cart, pay for them directly from the app and present their virtual receipt while walking out the door. Consumers who once loathed standing in long lines can now shop and pay on their own terms. The advances in technology will not change in 2017. However, the opportunity to offer customers alternative checkout methods through an app or mobile POS continues to grow.

Employees drive the ship

Brick and mortar stores made a comeback in 2016 as Amazon, who owns the majority of the online market, let some numbers slip. Best Buy has seen three consecutive quarters of in-store growth and Target has seen their in-store numbers increase as well. Retailers have more control over their products under their roof, as opposed to how a third party may sell them, and they also have their own people selling their product. In 2017, more companies will be investing in their people.

The store associate is about to become the knowledge hub of the store. They have a more intimate knowledge of their products and services, can easily answer customer questions and can uncover customer challenges. Websites do not offer the same level of personalization. Employees will also be the face of the retailer, giving the customer the “experience” they are looking for.

Online retailers recognize the need to meet the customer face-to-face. Technology is making the shopping experience more frictionless, and consumers are craving human interactions as part of their purchasing experience. More companies are going to invest in their frontline employees through salary and training, making them better equipped and less likely to turn over. An experienced knowledgeable staff results in a better customer experience and repeat business.

People like people

The National Retailer Association conducted a study last year of shoppers around the world and the results show 72% of shoppers prefer their experience inside a physical store to be the most important factor when making a purchase. As a result, more retailers are creating in-store experiences designed to capture the imagination of shoppers. Ikea is using virtual reality to help customers see what a new kitchen could look like and smaller retailers are offering opportunities to meet and mingle with authors and local celebrities.

While the online companies are fighting each other for larger online market share, ensuring the local customers continue to walk through your doors is another feather in your cap. Loyalty programs are an opportunity for the smaller retailers. While each loyalty program is as unique as the business itself, the value of a customer database built on loyal customers cannot be stressed enough. Another opportunity would be to employ a Customer Relationship Management tool. This application allows you to track your customer's buying habits enabling you to market to a specific niche at the appropriate time.

Consumers crave human interaction and the shift in shopping habits in 2016 demonstrated the need for an experience that cannot be found by clicking a mouse. The customer experience goes deeper than virtual reality and movie stars, it includes honesty, room temperature and your people.

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