The boom of online shopping and changes in customer behavior exert great pressure on businesses to innovate if they want to remain competitive. There are five key retail trends that have emerged and have been discussed in the latest KPMG International 2018 Global Retail Trends report.
In fact, what makes or break a retailer isn’t whether or not they are selling through online channels or physical stores. By January 2019, 90 percent of all retail will still be operating from physical stores. What is more important, however, is the experience that meets or exceeds customer expectations. The new Nike store in New York is a good example of this; it opened a five-story store that is comparable to a theme park for sports lovers. Among other things, it features a mini basketball court, treadmill, system that simulates runs in different locations, and a shoe bar where customers can customize their own Nike shoes. This demonstrates how a brick-and-mortar retail can create a memorable customer experience in the age of e-commerce.
In 2018, we will see AI adoption continue to rise, with chatbots being one of the leading technologies. Due to increasing ease of deployment, instant availability and improved quality, chatbots will become more and more common to manage customer service queries and to make intelligent purchase recommendations. Alongside having the technology available, retailers now also have a significant amount of data to power AI and deliver personalized, customized and localized experiences to customers. This will be able to answer to the demands of customers for better, faster and personalized experiences.
Customers are demanding transparency as they take an increased interest in the ethical practices of the brands they buy from. For example, research from YouGov and the Global Poverty have shown that many customers are willing to pay more for a product if there are guarantee that workers were being paid fairly and working in safe conditions.
We've arrived at the intersection of elevated consumer expectations and technical possibility. This is the consequence of significant behavioral shifts over the last few years. New technologies have put the power in the customers’ hands. With instant messaging applications, instant gratification has had a deep impact on customer expectation. Brands that can offer immediacy, instant gratification, personalization, authenticity and accessibility will win.
The juxtaposition of what is happening in the West and the East will dominate the retail landscape with the latter in many cases moving faster than the former.
China has developed a unique innovation ecosystem that has resulted in a revolutionary approach on a mass scale. Already today, more Chinese consumers use mobile phones to access the internet than those in America, Brazil and Indonesia combined. About half of China’s online sales take place via mobile, compared to barely a third in the US. In China, users can shop and pay within the apps. Advances in the East could be an indication of how retail will change in the West.
As the global consumer and retail industry is being transformed by three revolutions at once –geographic/geopolitical, demographic and technological – the tools, strategies and technologies required to be successful in this new world are available, and it’s up to retailers to choose the right tools from the toolbox in order to grow their business.