In this two part article we look back on some of the predictions that were made in December 2012 for this year. In reflection we seen there was an increased buzz around digital and social media. What also experienced increased velocity in Omni-channel initiatives, digital marketing, and (big) data. Some of these will certainly form predictions for 2014.
So here again were the predictions for 2013 followed by a year in review:
1) Bricks and mortar stores will shrink: This is not a prediction that more retailers will close their doors in 2013, this is a premonition that retailers will start to downsize their physical locations in line with their on their Omni-channel strategy. With rents only increasing and placing pressure on the cost of goods for B&M retailing, space efficiency will become paramount. Look for less clutter and more calculated space usage to include digital tools like kiosks for social convergence, augmented reality and even access to customer reviews based marketing in store.
Year in review: A number of retailers indicated that they would be looking at this structure in the future with David Jones actually opening their first ‘Village Style’ store in September. They say the new format will feature digital charging stations, complimentary customer Wi-Fi, an interactive tweet mirror and customer dwelling areas along with dedicated in-store areas to purchase merchandise online as well as collect online purchases.
2) Customers are the sales people: For decades retailers have been telling us how and what to buy. The shift (as with the previous point) will see customers selling to each other. As the number of shoppers researching products online increases retailers need to be more savvy and tuned in to what is happening via social media channels. Retailers are starting to embrace this in the US by providing customers a means to share their experiences via Facebook and Pinterest. Expect to see this conversation moving to digital access points in store.
Year in review: Regardless of which study you reviewed there is one common theme, customers influence other customers and people are listening to the wider community. Looking at the stats supporting this trend one survey stating that 93% of people are influenced by recommendation by friends, family or co-workers with 51% actually making a purchase based on that influence. Only 6% said they rarely used referrals when purchasing. Interestingly purchases influence as a result of advertising via TV, radio, magazines and newspapers continued to rate lower in the survey compared to internet site ratings reviews and social media channels. In fact Amazon has now become the highest single source for research prior to purchase. A survey by Market Force found that 81% of customers claimed to be influenced by a social media post, whether it be family, friends or even on-related parties.
3) Click to brick: A number of retailers are starting to incentive their clientele to purchase online and pick up in store. This fosters the physical relationship with the customer and enables upselling and crossing opportunities that may escape retailers with pure play online sales. Reference Best Buy in the US as they are already masters at this initiative.
Year in review: This year saw supermarkets in France and England introduce locations where customers could pre order online and pick up in a drive thru environment (similar to a loading dock). This prediction will be included for 2014 as Australia’s big two are already making noise around this initiative.
4) Retail CRM solutions are the best salesperson you have: Expect to see less blanket marketing and more customer specific targeted correspondence. Analysing your customers purchasing behaviour and targeting their interest will see a major shift in 2013. When we speak directly to our customers they are more likely to listen and customer relationship management solutions are the key to unlocking this data. They should be adopted heavily in 2013 and considered as a core retail competency moving forward.
Year in review: Recently, Gartner reported businesses that enable their sales representatives to leverage data on a day-to-day basis stood to increase revenue productivity by 17 percent. The largest issue currently for SMB’s adopting CRM and reporting across the related platforms is data integration. A study by integration specialist Scribe found that only 18 percent of retailers reported data as being fully automated within their CRM. As a result, there was an impact on targeted and automated marketing initiatives with 52 percent finding marketing reporting and 44 percent indicating sales reporting to be somewhat or very challenging. Look for 2014 to be a year that continues to focus on Business Intelligence platforms and integration.
5) It’s a mobile world: If it’s available digitally it must be mobile compatible. Mobility is the future of networking and commerce. Customers literally have the world at their fingertips and will be expecting to access information in a mobile friendly fashion. Expect to see more retailers adopting an M-commerce strategy as customer will be turned off by non-adopters.
Year in review: Where do you start when reviewing the impact mobile is having on retail? For 2014 see this as even more diversified in application. Deloitte Consulting released a study this year that claimed up to 21 percent of total retail sales were expected to be mobile-influenced by 2016. They went on to say "store-based retailers should consider mobile as a strategic imperative because it affects the entire business," the report went on to say "Mobile should be used as the strategic lever to boost sales across the business."
Part two to follow shortly.