Retail Isn't The Same Anymore. Here's How Smart Companies Are Responding.

Friday, July 6, 2018

  By Ian McCue, senior associate content manager at NetSuite

In short: 

  • It's no secret that retail is changing: Many thanks to connected devices – smartwatches, phones, and voice-controlled speakers – consumers can shop almost anywhere, and they expect their items to be delivered quickly.
  • In response, the smartest retailers are altering store layouts and partnering with quick-delivery services.
  • The next major opportunities retailers should plan for? Continued proliferation of voice, and online grocery shopping.

The last few decades have transformed the retail industry more than anyone could’ve predicted.

But the biggest changes are yet to come.

Soon, retail will be woven into our daily lives. As consumers get more used to shopping anywhere, anytime and via any channel, the walls around traditional retail will fall, according to Erin Jordan, who leads the retail practice at public relations agency Walker Sands Communication.

During a session at the IRCE retail conference, Jordan shared statistics from a survey Walker Sands conducted for “The Future of Retail 2018” report. Its takeaways can help retailers plan wisely for the future.

As we know, today’s consumers can shop anywhere.

Online shopping is more popular than ever: Almost 60 percent of consumers shop online at least once a month, and 4 percent buy something online every day. (Both of these numbers increase in younger age groups.)

And a growing number of shoppers have an arsenal of “connected devices” -- from smartphones to smartwatches to voice devices -- which integrate retail experiences into everyday life. A mother might order diapers on her smartphone as soon as she realizes she is running low. A son might use a smart home device to place a last-minute order for Mother’s Day flowers.

Smart home devices, or smart speakers, let users order household items from the comfort of their couch.

“Connectivity isn’t about technology anymore,” Jordan said at the conference. “It’s a lot more about the overall integrated consumer lifestyle. It’s about experiences across channels, and it’s about shopping habits that cross different channels.”

And they want their items FAST.

Just as shoppers’ preferred channels have changed, so have their expectations. About 40 percent of shoppers said next-day or same-day shipping would make them more likely to shop online, per Jordan, and major retailers are listening.

Target, for example, acquired grocery delivery service Shipt to offer customers in certain markets same-day delivery., owned by Walmart, recently launched a program in New York called Jetblack where members pay $50 per month for access to personal shoppers who deliver orders same-day or next-day. Members request products by text, and Jetblack knows their preferences.

These acquisitions position big-box stores to capitalize on the ecommerce grocery market, which is gaining traction. Amazon’s purchase of Whole Foods for $13 billion last year spoke to the promise it sees in grocery, and competitors followed suit.

“I think it’s clear that Amazon has this opportunity to expand into consumer lifestyles, from everything from grocery to how you’re getting groceries delivered to how you’re watching TV,” Jordan said. “They’re starting to bring these things together, which I think is what’s made them so powerful.”

In response, smart retailers are changing their "store" experiences.

As much as retail has changed, one statistic remains the same: the majority of retail sales still happen in-person. The retail store experience is not dying; it’s just evolving. Retailers are beginning to understand stores are only one touchpoint in the customer journey, and they’re rethinking these physical spaces.

For example, last year Nordstrom opened a couple of locations called Nordstrom Local that have no merchandise for sale. Rather, these small stores are a place to try on clothes, pick up online orders and get alterations. Personal stylists are available to offer advice or pick up clothes at a full-sized store nearby, and customers can enjoy coffee or wine while they wait.

Meanwhile, athletic apparel retailer Outdoor Voices launched a new running collection that was exclusively available through its augmented reality app, for a limited time only. To score items from the collection, shoppers used the app to visit “virtual pop-up stores” at pre-set locations on running trails, soccer fields and other recreational areas across 25 cities.

Outdoor Voices is known for a cutting-edge customer experience. Furthering its social-media savvy, the brand launched an augmented reality app this year.

“More people want to shop online, but they’re still really relying on in-store as the number-one channel,” Jordan said. “… while more consumers are adapting online experiences, and mobile and voice are more likely to touch a consumer’s purchase, consumers still really want that in-store opportunity to be there.”

And the smartest ones are exploring voice. 

Twenty-five percent of the people Walker Sands surveyed own a voice device, and 64 percent of them use it at least once a week. Most consumers have yet to purchase anything with their smart home devices, but Jordan expects that to change soon. People feel comfortable purchasing food, groceries and consumer-packaged goods through voice.

Businesses are already exploring this channel. Walmart, Target, Costco and others partner with Google to sell their products through Google Home, while Amazon’s clients include Best Buy, REI and 1-800-Flowers.

Retailers of all sizes need to understand their audience in order to thrive in this new era. Walker Sands’ numbers reveal the type of experiences modern consumers seek and how retailers can satisfy those expectations. Businesses that can put all the pieces together will set themselves up for unprecedented success.

  Like what you see? Sign up for The Grow Wire Email Newsletter.