We’re well into 2017 and it’s the right moment to discuss the current and upcoming trends in the retail industry. It’s clear that with AI, big data, and machine learning on the rise, the way we sell and purchase will be tremendously transformed. The fact that the Chinese online shopping giant Alibaba dethroned Walmart from the position of the world’s biggest retailer indicates that the winter is coming for brick-and-mortar retailers and that they have to change their game profoundly if they want to survive in such a fiercely competitive market.
Does this mean that we’ll see the end of physical retail store concept in the near future? Not so fast. Even though it will have to undergo some severe cuts and facelifts, B&M can still cope with the challenges of modernization.
The omnipotence of the omnichannel
If you can’t beat them, join them. The omnichannel model combines both physical stores and various online options, and it allows retail businesses to take advantage of big data analytics. In order for all these joint efforts to come to fruition, the showroom option has to be included. Namely, the omnichannel marketing strategy is very costly, as retailers have to manage several supply chains, logistics, inventory, and staff. On the other hand, online-only retailers have some other issues, one of which is making their online visitors actually convert and make a purchase.
Another downside of this shopping method lies in the fact that customers can’t feel the fabric, try on, and see whether they like the goods in person. All this can be overcome with the use of showrooms. That way, customers will be able to get familiar with the products with the help of attentive, skillful salespeople, while the retailer won’t have to hemorrhage money on countless physical stores and they’ll be able to downsize and cut expenses. Potential customers will be served in showrooms that stock only the number of products that allow them to select and order what they want, which means just one supply chain will be managed. The purchasing process will be performed online, and the system will memorize customers’ sizes and preferences, thus making upselling and cross-selling much easier, while a face-to-face contact with product-knowledgeable salespeople will increase conversion rates.
Basically, the first step towards enjoying the benefits of both worlds is establishing a functional and easily-navigated online store.
As gross as it may sound, but a stunning 75% of Americans use their mobiles even in their bathrooms. It can’t be stressed enough how mobile optimization of your website is important for growing your business. Namely, an increasing number of people are more willing to make an online purchase through their mobile devices. According to relevant stats, by the end of 2015, the mobile share of ecommerce transactions was 40%, and it was predicted to reach 70% by the end of 2017. This is the result of improved mobile security and the dynamic encryption keys.
In 2016, mobile devices accounted for 51.3% of the global internet traffic, thus exceeding desktops and laptops for the first time. It’s much more convenient for customers to browse and research the products they’re interested in through mobile devices, as they can do that while in public transport, at a restaurant, or any other place where they don’t have their laptop. That’s why it’s essential to optimize your website and make it mobile-friendly because your visitors will be quick to bounce if they can’t easily navigate and make a purchase via their smartphones.
AI & AR
The future of the online retail industry lies in the automation. As customer experience is one of the most important factors in customer retention, it’s of vital importance to help them get the best service. Artificial intelligence and augmented reality are becoming staple technologies in ecommerce. AI and machine learning allow online retailers to collect and analyze massive amounts of data about customers, and use it to predict future buyer behavior. Moreover, these sophisticated technologies are capable of helping online retailers be aware what their customers want before they themselves realize that. Almost all successful ecommerces utilize recommendations based on the history of customer behavior.
Augmented reality, on the other hand, lets retailers provide their shoppers with a pretty useful option to walk through a physical store and observe shelves through their mobile device camera, thus receiving various additional information about the products they’re interested in, or even remove certain merchandise from their sight in order to help them declutter the retail environment and focus on particular products. With the appearance of low-cost AR glasses, retail stores will be able to offer their customers an advanced experience and make it possible for them to view and browse only through, sugar-free, low-fat, or other specific product categories, while other surrounding products will fade into the background.
Finally, chatbots have become indispensable for any well-designed website, and they can accelerate the purchasing process by answering some of the most common questions about the products, and assisting visitors in picking what best fits their needs.
The latest technologies will improve the online retail industry, and at the same time give traditional brick-and-mortar stores a good chance of survival.