2017-03-08 00:00:00 Running a Business English Learn about several trends transforming the retail industry and how those changes will affect consumers' shopping experience. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/retail-clerk-scans-item-during-checkout.jpg https://quickbooks.intuit.com/ca/resources/business/trends-predicting-future-retail/ Trends Predicting the Future of Retail

Trends Predicting the Future of Retail

4 min read

Look at any report that discusses retail sales data or just look at how people are shopping, and one overwhelming trend emerges. More people want to do their shopping online. Global online retail sales as a percentage of total sales has been growing for years and is expected to continue growing into the future. Worldwide, the percent of sales coming from online is expected to grow from 7.4% in 2016 to 8.8% in 2018. In Canada, online sales project to increase from 6.6% to 8.2% over the same time frame. Online sales are expected to grow to nearly $2.5 trillion globally in 2018. The migration towards the online channel and away from traditional brick-and-mortar is perhaps the biggest trend in the retail industry, but it’s far from the only one. Keep an eye on these six retail trends.

Using Big Data to Drive Sales

The most successful companies are going to be the ones that leverage data to identify customer needs effectively. The ability to capture data on customer preferences and buying habits to anticipate what they need next will be key in driving additional future revenues. Have you ever seen those customer satisfaction surveys at the bottom of store receipts? That information goes straight into the company’s marketing database and gets combined with purchase history, social media profiles, and demographic data to give you a very personalized shopping experience. The use of big data for customer insight and analytics should only continue to grow with those maximizing the information within their databases likely coming out ahead.

The Growing Impact of Social Media

People who like or follow a social media profile are essentially opting in to receive promotional materials. That gives your business a platform to easily build a potential customer list. It’s also a way to spread the word about products and services to the masses in a way that allows small businesses to compete more effectively. Successful businesses will use platforms such as YouTube, Instagram, and Facebook to combine product advertising with socially relevant content, how-to videos, and other freebies to create deeper engagement. Social media can give your small businesses the ability to create a considerable marketing reach at minimal cost.

Automated Purchase and Product Delivery

Consumers are increasingly looking for ways to get their shopping done without spending time shopping. Enter automatic purchase programs, such as Amazon’s Subscribe & Save, that allow you to get regular delivery of items that you need on a continuous basis without ever visiting the website or the store. As an added bonus, many of these programs offer discounts on items ordered through the service. This kind of service lets your consumers score additional savings while helping your business lock in future sales and drive more predictable revenue streams.

Digital Payment Solutions

Cash, debit, and credit cards are no longer the only ways to pay for things. Retailers have already begun integrating mobile payment options to their systems. The number of mobile transactions completed annually is expected to rise to more than $1 trillion globally by 2019. Larger companies, such as Starbucks, may build their own mobile payment solutions, but many businesses will find it easier to adopt large-scale third-party payment options, such as Apple Pay, Samsung Pay, and Android Pay. Smart devices can be made into a point-of-sale solution with a simple card reader application. Adoption of these technologies is still in the early stages, but given the rapid growth that is coming, your company would be wise to begin implementing their solutions sooner rather than later.

The Use of Artificial Intelligence

Artificial intelligence will begin showing up in all aspects of business, from inventory management to marketing. From the customer standpoint, shoppers will use AI to get product recommendations and gift ideas through the use of interactive touchscreen and voice-recognition technology. Business owners can use AI to automatically replenish stock, assist in pricing, and even take into account factors such as weather to optimize cost structures and save money.

Free Shipping

Free shipping used to be a perk offered by stores only on large purchases. Then, businesses began lowering the minimum required to qualify for free shipping as competition grew. Now, free shipping has almost become an expectation for shoppers that buy anything online. Smart businesses have begun modifying their supply chains to get products closer to the consumer right from the outset as it’s ordered. That cuts down on shipping costs and expedites the time it takes to get the product to the buyer’s front door. Many companies are working towards same-day delivery to satisfy customer demands, while new technology, such as drone delivery, may start cutting the order-to-delivery time down to mere hours. If your business isn’t taking advantage of the major shift towards the online channel, it could be missing out. Speed, convenience, and data integration continue to transform how the industry operates – and will continue to affect how consumers shop for the foreseeable future.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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