Five retail marketing trends for 2014

From omnichannel marketing to the customer experience, several buzzwords have emerged in the retail industry as key developments for the coming year. Merchants are focusing on ways to integrate their technology and operations across channels to create seamless customer experiences.

"2014 will not be the year for retailers to become complacent. As consumers seek a richer, more personal shopping experience, retailers need to be a few steps ahead and look for new ways to remain relevant to customers," said Scott Gillies, director of retail at Manhattan Associates.

To stay competitive, retailers should keep an eye on retail business intelligence, such as the following trends:

  1. Greater degrees of personalization and targeted marketing. Retailers are using data analytics and retail technology to send promotions to individuals based on their shopping history and preferences. The Manhattan Associates noted that multiple channels for engagement, particularly online and mobile platforms, provide greater opportunities for merchants to collect information about their customers. By integrating this data into a single management system, retailers can optimize their marketing campaigns and plan better inventory strategies.
  2. Faster fulfillment and delivery. With customers more interested in shopping online, merchants are finding ways to get purchases to consumers more efficiently. The Washington Post mentioned the rise of one-day delivery services, even among small "mom-and-pop" retailers. To keep these faster transactions possible, the Manhattan Associates said, retailers need technological solutions that provide comprehensive, up-to-date information about their inventory.
  3. Social shopping and engagement. Merchants have already explored social media channels for advertising and establishing their brand image. The next step will be for retailers to offer options to purchase items directly through these channels, experts predicted. Chain Store Age also suggested merchants will take advantage of virtual currencies to create a more seamless shopping experiences on social networks.
  4. Outlets and physical storefronts. According to The Washington Post, outlets are the fastest-growing sector of the retail industry right now, and they're moving to major cities. Other stores are using retail intelligence to make the most of physical locations. For example, the source explained that exercise apparel merchants are capitalizing on proximity to fitness centers for a steady customer base.
  5. Experience and service-oriented. Merchants are offering exciting shopping experiences with retail technology and other perks. Retailers hoping to draw in families are adding attractions like Ferris wheels, and others are turning to services that can't be provided online, like hair salons and specialty restaurants, The Washington Post reported.

Location, location, location

Online commerce may have made significant gains, but retail customer trends point to the continued importance of physical store locations for merchants. In addition to preferring the brick-and-mortar experience for some products, customers are drawn in by on-hand merchandise and the convenience and novel experiences offered by retail technology. As multichannel strategies continue to merge into integrated marketing approaches, even previously online-only sellers are beginning to seek store space to take advantage of diversified opportunities, The Financial Post explained.

It's not just about having a store front, of course. Merchants need to find the right brick-and-mortar presence for their brand and customer base. For example, The Globe and Mail described how mid-rise project developers consider demographics and seek corresponding retailers to create the right overall experience in their completed projects.

"If you match the location with destination retailers, you can create character," Jason Lester, chief operating officer of Dundee Realty Corporation, told the news source. "Our strategy and approach is to define the type of retail that will go in on the ground floor."

In addition to integrated projects like Lester's development, merchants can draw on retail customer trends and business intelligence to identify areas where they'll be most competitive and isolate strategies that will appeal to targeted demographics.

Location-based mobile marketing yields gains for retailers

Retail customer trends have shown that shoppers are increasingly turning to their mobile devices to look up product and store information and to make purchasing decisions. Merchants are taking advantage of this trend by offering mobile apps and responsive websites to reach consumers more effectively. In fact, compared to other industries, retailers are now leading the charge for mobile apps.

According to Inside Mobile Apps, xAd's 2013 Year in Review Report showed that retail apps were the most popular category, ahead of auto, banking and finance, restaurants and telecommunications. This is largely due to the fast-paced nature of retail transactions compared to other sectors – shoppers often need to make decisions about products relatively quickly and want convenient options.

"The rise of geo-precise targeting is a testament to how effective techniques like geo-fencing and geo-conquesting are for driving customers to visit retail locations," said xAD CEO Dipanshu Sharma, as reported by Mobile Apps. "This is particularly true for retailers, where consumers are often looking to make a fast transaction."

Enhancing mobile marketing strategies, location-based services enable retailers to target their advertisements and promotions more effectively. The majority of customers are receptive to messages they receive while shopping in stores, Information Age explained. Stores can use geo-location technology, like iBeacons, or offer free WiFi to identify shoppers and send them promotions.

Emerging retail trend: browse online, buy in store

As merchants streamline their multichannel store operations and focus on enhancing the customer experience, many shoppers are choosing to return to stores to make their purchases. Even if they first browse online, consumers sometimes prefer to buy products in stores, where they can see the item and maybe try it on before completing the transaction. This trend, which Accenture calls "webrooming," demonstrates how integrated retail marketing approaches are changing the way customers shop.

"Today's shopper expects to be able to shop easily across different channels to fulfill their shopping mission. In fact, it is expected that well over half of retail sales will be influenced by online and mobile, regardless of where the ultimate purchase is made," said Renato Scaff, executive partner of Accenture, according to MSNBC.

Accenture's study found that 78 percent of shoppers have looked at product information online and then purchased an item from a physical store location. In addition to the in-store experience, shoppers were motivated to purchase off-line if stores had the items stocked so they could take them home on the same day instead of waiting for delivery. The study emphasized the importance of seamless retail marketing for customers, who want to be able to choose how and where they purchase products without feeling a difference between channels.

How retail technology can empower your store clerks

Retail marketing is currently focused on improving the customer experience, but merchants should also consider how retail technology can benefit their employees. Not only do happier workers usually lead to satisfied customers and bigger profits, but technology can empower workers to be more productive and provide better service.

When choosing retail management systems and devices, such as mobile point of sale solutions, retailers should focus on improving their employees' workflows. After implementing retail tools, merchants should train their staff and adjust business processes to take full advantage of the opportunities offered by these resources. Here are a few ways that retail technology can impact employee performance:

  • Increased productivity. According to Gulf Business, companies can use the analytical capabilities of management systems to assess productivity factors, such as hours for shifts and tasks for particular groups of employees. Then, they can adjust their processes and change variables like the layout of their warehouse to make operations run more efficiently. Technology can also help employees to complete tasks more quickly and automate processes that workers previously had to perform manually.
  • Easier scheduling. Tools like mobile apps can be used to make it simpler for workers to schedule and track their hours. Managers can more easily see information about their employees' shift preferences and be notified if staff members have worked too many hours in a row without taking a break, the news source noted.
  • Access to information. By allowing store clerks to instantly look up product or inventory data, retail technology empowers employees to provide customers with the same kind of information they seek online. Instead of leaving customers to check the back store room, for example, clerks can immediately provide shoppers with accurate responses.
  • Mobility. Mobile POS systems and other technology give employees the ability to leave the cash register while still being accessible when customers want to make a purchase. In fact, they can even help to move sales along by reaching out to customers in the aisle. According to Business Wire, mobile POS is the top priority for retailers, ranking even higher than security in the January 2014 mPOS Tracker report.
  • Improved communication. Technology can help employees communicate and collaborate better. This can range from simple messaging services to innovative ideas, such as The Container Store's novel "Siri without a phone" employee communication system, as Retail Systems Research reported. The store implemented technology that allows workers to broadcast messages to specific coworkers, reducing the noise that typically attends walkie-talkie conversations.

‘Click and collect’ gains traction in U.S.

Click-and-collect services allow customers to order items online and then pick them up at a designated location or local store. In the United Kingdom, the 2013 holiday shopping season revealed the surging popularity of this option, particularly for urgent orders that could be held up by delivery. Click-and-collect programs haven't been as widely deployed in the U.S., but that could be changing.

Recently, Walmart decided to explore click-and-collect services for grocery items in Denver, Retail Solutions Online reported. Customers can place orders online and receive a notification when their items are ready to be picked up. From the parking lot, shoppers can call a store's number to have an employee bring their order to them. The click-and-collect option also makes it easy for customers to grab a few additional items at brick-and-mortar stores if they forgot to include them in their order. Retail customer trends show that shoppers prefer to pick up grocery items in stores rather than have them delivered, according to a Quail Digital survey.

Merchants are listening to customers' needs and tailoring their services to improve the shopping experience, Forbes noted, and this often includes using retail technology to integrate options across channels. Click-and-collect services provide the convenience of ecommerce while catering to consumer preferences.

‘Click and collect’ gains traction in U.S.

Click-and-collect services allow customers to order items online and then pick them up at a designated location or local store. In the United Kingdom, the 2013 holiday shopping season revealed the surging popularity of this option, particularly for urgent orders that could be held up by delivery. Click-and-collect programs haven't been as widely deployed in the U.S., but that could be changing.

Recently, Walmart decided to explore click-and-collect services for grocery items in Denver, Retail Solutions Online reported. Customers can place orders online and receive a notification when their items are ready to be picked up. From the parking lot, shoppers can call a store's number to have an employee bring their order to them. The click-and-collect option also makes it easy for customers to grab a few additional items at brick-and-mortar stores if they forgot to include them in their order. Retail customer trends show that shoppers prefer to pick up grocery items in stores rather than have them delivered, according to a Quail Digital survey.

Merchants are listening to customers' needs and tailoring their services to improve the shopping experience, Forbes noted, and this often includes using retail technology to integrate options across channels. Click-and-collect services provide the convenience of ecommerce while catering to consumer preferences.

How retail technology is enhancing the in-store experience

Online sales are booming, but retail technology isn't just for ecommerce. Retailers are taking advantage of exciting new devices and software to provide interesting shopping experiences and enhance their store operations. From convenience to novelty, these initiatives are aimed at assisting customers and drawing them back to the store time and again.

High-tech brick-and-mortar
Contrary to concerns that ecommerce would make physical stores unsustainable, retailers are finding ways to bolster their sales using technology and an integrated, multi-channel marketing approach. In fact, a recent report by Accenture revealed that 88 percent of consumers research products online and then head to a store to make their purchase. While online advertising is important and influential, retailers can play on the strengths of their physical store locations to offer customers opportunities not possible through online channels.

Retailers are integrating technology into their brick-and-mortar operations in innovative ways. Here are a few examples:

  • North Face has introduced Watson, IBM's contextual computer that acts like a shopping assistant, in some of its stores, The Huffington Post explained. Shoppers can ask a kiosk questions and receive personalized answers that take shopping history, weather, location and other factors into consideration.
  • Sephora created a "fragrance finder" to help people match scents with products, drawing on a database of information and using Big Data analytics to assist customers in real time, the source reported.
  • Many retailers, such as Apple, are using mobile point of sale systems to provide convenient check-out options for shoppers. This technology also enables store clerks to better engage with customers, since they're able to assist people in the aisle and offer additional information about products.
  • Nordstrom Rack is tracking in-store shopping habits to drive major retail business intelligence initiatives. The news source added that the store is using analytics to make small – but powerful – adjustments to its store layout and other operations.
  • Ikea offers an in-store companion app to help customers navigate the store, according to the news source. Retail Wire also noted the growing range of opportunities that mobile apps offer for retail marketing. Merchants should focus on making the in-store experience more convenient and provide incentives to get consumers to install the app, the source suggested. For example, Walmart offers a "scan and go" app in some stores that saves shoppers time at the check out. 

Overall, retailers are thinking outside the box to revolutionize shopping experiences. The Huffington Post noted that the majority of customers will shop in-store if they're offered a memorable experience, according to research by Jack Morton Worldwide.

Taking the customer experience mobile

Mobile apps and shopping sites offer a great deal of convenience to consumers, but retail marketing leaders should keep the customer experience in mind when implementing their mobile options. Merchants have been focusing on enhancing the shopping experience for customers, whether that means making check-out processes more efficient or providing personalized suggestions online.

Many of these ideas come from the classic strengths of physical stores, demonstrating how excellence on-site and online can go hand-in-hand. Forbes magazine encouraged mobile app designers to take some lessons from brick-and-mortar customer engagement strategies. For example, the source explained, local stores often prioritize building relationships with patrons, which can sometimes slip through the cracks during digital interactions.

"Mobile shopping apps and sites need to offer greater levels of personalization, service and support to consumers," Brent Cohler, director of mobile product marketing at SAP, told Retail Customer Experience. "Mobile commerce is about much more than just the payment."

One way a store can improve its engagement strategy is to learn more about its customers, Forbes added. Merchants can collect data for retail customer intelligence to better tailor their apps according to shoppers' needs and preferences. The point is to be flexible and let customers see that their opinions and feedback are being taken seriously.

Ecommerce inspires push for new business rates in UK

With online sales gaining popularity in the United Kingdom, retailers are seeking ways to keep the playing field level for ecommerce and brick-and-mortal store operations. The British Retail Consortium (BRC) is currently pushing to change the way merchants are taxed, The Telegraph reported. The group argued that rate adjustments, such as taxing based on energy usage rather than property value, would help brick-and-mortar retailers stay competitive, explained The Guardian.

"Our fundamental premise is that something significant needs to change that will remove the disincentive we have at the moment to operate from property," Helen Dickinson, director general of the BRC, told The Guardian.

The group outlined three options that would help retailers operate alongside large ecommerce firms, such as Amazon.com, the news source added. These include:

  • Rate discounts for merchants who pay UK corporation taxes
  • Taxes based on energy usage to replace the business rates
  • Discounted rates based on the number of staff employed

The BRC is still refining its recommendations. In the meantime, merchants in the retail industry have found innovative ways to use retail technology to keep customers interested in the store experience and to make shopping more convenient for consumers.