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Top Five Retail Trends to Give You a Competitive Advantage

Publish
May 04 2022

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Key Trends Retail Brands Need to Understand to Get it Right

The retail industry has seen tremendous changes over the past few years, marked by growing customer awareness, changing behavior, a rise in disposable income, and fast-tracked integration of online and offline retail formats. Digital transformation has already begun in retail supply chains to turn our challenges into new opportunities.

Every retailer is moving fast towards digital innovation to drive efficiency and meet entirely new customer expectations- contactless and frictionless.

So, what’s the new normal for commerce? And what can you do to take your experience to the next level? This blog presents top retail trends that will shape the future of retail and commerce.

Top 5 Emerging Retail Industry Trends

Here's a description of the top followed trends in retail:

Trend 1 - Omnichannel Innovation – Offline is Online, Online is Offline 

To adapt to new customer preferences and habits, retailers must review their omnichannel offerings and inject innovation to fill the gaps. 

This is one of the biggest retail trends, which include emerging technologies AI, ML, robotics, IoT, and extended reality (virtual and augmented reality). Such technologies play a vital role in enabling retailers to bring the convenience of online shopping to offline stores and vice versa. While the general trend has seen offline stores moving into ecommerce, more lately, it has been seen online retailers are focusing on building brick and mortar presence.

At its core, this trend includes big players like Amazon Go (letting customers pay for their groceries by scanning the palm of their hand) and Walmart's initiatives (facilitating customers to order and pay in-store and have goods delivered to their homes). On the other hand, the pop-up shop trend is getting popular amongst start-ups and mid-market companies in collaboration with more prominent brands. This is how technology inventions meet consumers where they are and on their terms.

AR and VR are already making an entry into digital retail. VR environments will pick up momentum to provide feature-rich shopping experiences. At the same time, offline retailers are experimenting with AR to allow customers to look into product details they find on the shelves. As this uncertainty continues, retailers focus on tech-driven solutions to enable customers to virtually try out products to encourage contactless shopping. 

Trend 2 - AI and Personal Voice Assistants – Ringing Up Gains

The AI trend is increasingly gaining momentum across the whole retail industry. AI and advanced analytics power customer and service personalization across all channels through which customers interact. Moreover, big data analytics allows companies to understand what should be stocked in the stores and streamline logistics operations. Retail trends for 2022 include recent developments in AI, such as chatbots and personal assistants. Like robots and intelligent forklifts have been helping out in inventory management, we can expect to see them on the shopping floors in the future.

Analysts have forecasted that retailers' global annual spending on AI will reach $12 billion by 2023, all because AI provides new ways to uplift customer experience and optimize operational efficiency.

AI-powered voice recognition assistants are now performing better. They can be used to add value in both the modes in-store and through ecommerce applications. Just like the trend of commanding our devices through voice has become prevalent, we are increasingly using them to get information and make purchases.

It's also important to note that personal assistants or chatbots can go beyond creating in-person experiences. For example, Opun Limited, a home improvement company, has created a chatbot assistant to help people get home improvement jobs. The chatbot system can handle various customer service requests – kitchen designing queries, appointment tracking, issue tracking, confirming availability, surveys, and more - just like humans do.

Trend 3 - Autonomous Delivery will Prosper

We're likely to see ideas such as drone delivery and self-driving vehicles coming to life. Autonomous delivery and fulfillment reduce risks like virus contamination, which is a crucial factor that leads to accelerated acceptance of these new advancements in the tech space.

Soon, autonomous delivery will act as a 'last-mile' solution. This will involve self-driving vehicles and airborne drones for trips between fulfillment centers and consumers' homes.

There are bright spots: Walmart has taken the next step in on-demand goods delivery by partnering up with Flytrex, an end-to-end drone delivery company. Walgreens is testing drone deliveries by partnering with the Wing drone delivery system.

This trend will involve several technologies, including AI, to drive efficiency from the logistics standpoint. Others like blockchain, which will ensure security and transparency along supply chains, and digital twinning, allowing massive logistics and fulfillment operations models to be built to drive efficiency.

Trend 4 – Personalized Shopping Continues to Rise

Today, customers expect a personalized experience while shopping. Thanks to online pioneers, such as Amazon and Netflix make, customers enjoy and expect personalized experiences at every step of their online journey.

A research conducted by Segment Research finds that consumers will do more purchases when their shopping experience is personalized.

Personalization, which was once limited mainly to targeted offers, is now ushering in a new form of extensive-level customization across a whopping range of products and services. Retailers are making customers part of every dialogue between the two and leveraging the data to create one-to-one relationships. Customers then receive information as an individual, with products, offers, and communication that is unique to them.

Just like an ML-based recommendation engine keeps track of our purchasing history, inside retail outlets, shop assistants are now armed with information on who we are and our history of purchasing.

One excellent example of personalized shopping is Sephora. This cosmetics retailer collects information on personal consumer choices about beauty products through an app. After creating a personalized profile for every customer who does the shopping online, they make that information available to sales staff when they visit in person.

Trend 5 - Influencer Marketing has become More influential than Ever

Influencer marketing has boosted retail businesses in recent years due to shifting customer buying preferences. The technique has become so common, efficient, and effective that it has become a crucial and most impactful trend in the retail business. 

More and more businesses have leveraged this technique to increase brand awareness and drive more traffic and customers to the business. Moreover, with influencer marketing, retail businesses can conduct genuine and authentic research on what the audience likes and demands. Thus, when planned and implemented correctly, influencer marketing has a direct positive impact on business sales. 

As per a research conducted by BigCommerce, 17% of companies spend 50% of their marketing and advertising budget on influencer marketing. Moreover,  the search volume for "influencer marketing" increases by 5000% each month as per Google trends. 

These stats clearly explain why influencer marketing has become a trend lately for businesses due to the visible quick benefits that retailers can leverage. 

Trend 6 - Social Commerce to Create New Shopping Experiences

Social commerce has the potential to grow faster than ecommerce. According to a recent study posted on NPR/Marist Poll, around 69% of customers in the US preferred online shopping over purchasing things from stores. This states that, while consumers may not interact as in person, socially driven commerce is embedded in their veins.

The social commerce market has the potential to grow by $7.07 trillion by 2030- Technavio

Social commerce provides shoppers with a very smooth way to shop across social media platforms. In 2020 alone, we saw an exciting partnership between TikTok and Shopify. Moreover, we saw an expansion of Snapchat's Native Stores and the launch of Facebook Shops. Social commerce holds tremendous potential to build purchasing intent. Moreover, it will create a smoother payment process that gives new meaning to "seamless."

Take Your Next Step to Adapt the New Normal in Retail

With evolving consumer choices and attitudes, retailers must adapt to the changes and prepare for transformation to provide a frictionless experience across every customer touchpoint. This is the time to strive for personalization, embrace omnichannel retail trends, and reassess stores' potential by integrating technologies like 5G, AI, ML, IoT, extended reality, and data. Revamp and recalibrate retail business strategies to yield positive outcomes quickly. 

Take a deep dive into what's next of retail. Know more about what's happening in retail and win customer trust in this dynamic world of ever-changing buying preferences. Explore Icreon’s Ecommerce Services.