Trends come and go. The retail industry is intimately familiar with this reality, as what’s “in vogue” today – from fashion sense to what’s considered good business sense – can literally change over night. This requires the nation’s 3.7 million retail establishments – according to the National Retail Federation – to be nimble, tailoring their product offerings and service capabilities on the fly so that they align with the needs and wants of their loyal customers.
Here are five retail concepts that industry insiders believe will be all the rage for the foreseeable future.
1. Increased adoption of Artificial Intelligence
Whether it’s to cut back on labor expenses or provide quicker, more convenient customer service to clientele, artificial intelligence is no longer the wave of the future – it’s the stuff of the present. Virtually every subsector and industry has adopted AI in one form or another, retailers included, evidenced through voice-recognition services available at checkout counters and throughout stores, assisting customers while they shop.
Charlie Cole, chief of e-commerce at Samsonite, told Forbes that AI adoption may not be uniform or executed perfectly from subsector to subsector, but noticeable nonetheless.
“For example, categories like consumables will start to take off in voice, but categories like fashion may have a harder time,” Cole explained. “No one is going to say ‘Hey Google/Alexa, order me a $1,200 cashmere sweater.'”
Alexa, the voice-enabled personal assistant available through Amazon’s Echo device, has been a smash hit since debuting in 2014. Indeed, according to data crunched by Edison Research, an estimated 16 percent of adults in the U.S. own an Amazon Echo or Google Home, Forbes reported. Home is the smart speaker equivalent that the search engine conglomerate introduced in 2016.
2. More stores leveraging e-commerce capabilities
When it comes to convenience, customers don’t just want it all – they expect it and the ability to buy exclusively in-store, online or a somewhere in between. Most major retailers have an online presence and an increasing number of small-business owners do as well, particularly among restaurateurs and apparel outlets. To stimulate increased customer traffic, industry experts at a recent National Retail Federation event said they anticipate more retailers adopting buy online, pickup in-store service enhancements. A WD Partners study found 53 percent of Americans express interest in this method of buying. Additionally, 66 percent of those who buy online and pick up at their nearest location say it made their shopping experience more enjoyable, according to an NRF Consumer View study.
3. Doubling down on omnichannel
Mobile point of sales has led to the explosion of omnichannel marketing.POS systems for retailers have enabled companies to better personalize the buying experience for customers so it’s consistent, regardless of the means or shopping vehicle they’re using. As noted by Forbes, franchises investing in omnichannel has helped stimulate customer traffic in brick-and-mortar locations, such as Macy’s and The Children’s Place. Macy’s Executive Chairman Terry Lundgren noted omnichannel has revitalized the in-store shopping experience by making it easier for customers to find what they want and be on their way, having already ordered it from their mobile device or desktop computer.
“Physical stores are not going away,” Lundgren stressed. “Customers will always want the option of coming into the store to try on jeans instead of buying three different sizes online.”
Consumers grab their credit and debit cards even for small purchases.
4. Alternative payments the new normal
“Cash only” was a common sign seen at many store locations as recently as 10 to 15 years ago. It’s just the opposite today, given the decreased reliance on dollar bills. Based on a 2016 survey from Gallup, less than 25 percent of Americans pay for items or services primarily with cash, down from 36 percent in 2011.
Some companies are scrapping cash entirely. Dos Toros, a Mexican food fast-casual restaurant chain with locations in Chicago and New York, stopped accepting cash when 2017 concluded, The Associated Press reported. The company hasn’t looked back since – nor has the franchise’s frequenters.
“For the vast majority of customers, there’s no reaction at all,” co-owner Leo Kremer told the AP. “They’re already paying with their cards. And the significant majority of cash customers don’t have any problem with it either.”
Kremer added the transition has made service faster and also helped lower their operating expenses.
“Retail brick-and-mortar locations experienced a net increase of 4,000 stores in 2017.”
5. More brick-and-mortar store locations
Given the financial struggles of chains like Sears and Toys “R” Us, it seems like brick-and-mortar stores are closing with more people buying online. But a deeper dive into the numbers suggests otherwise. Last year, roughly 4,000 more physical store locations were built compared to 2016, according to IHL Group data compiled by the NRF. Additionally, for every store that closed in 2017, a corresponding 2.7 opened.
Michael Brown, partner for the retail division of management consulting firm A.T., Kearney, told RetailDive brick-and-mortar locations aren’t ending, they’re evolving.
“And we expect the cycle of change to continue for a number of years as retailers continue to find the balance of physical and digital assets required for omnichannel success.”