2015 Retail Trends: Back to the Future

With the holiday shopping season in the rearview mirror and a new year ahead of us, retailers are counting up their 2014 profits and reflecting on the past year. The end of each year — and the close of the busiest shopping months of the year — brings forth new trends that will have a major impact on retailers as they're settling into their New Year's resolutions. As you toast to the New Year and look to continue to make investments in online and mobile, think about these trends that will impact you the most in 2015.

Mobile Takes the Lion's Share of Online Shopping
As we've seen in past years, e-commerce continues to grow, presenting a huge opportunity for retailers in the New Year. In particular, mobile has been the driving force behind online shopping growth. According to IBM's Digital Analytics Benchmark, mobile devices accounted for more than 50 percent of online traffic on Thanksgiving Day and one-third of overall online sales. 
In addition, mobile sales were up overall 27.2 percent during Cyber Week compared to the same period in 2013. To put that into perspective, just a few years ago mobile accounted for only a small fraction of online traffic (6.5 percent in 2010).


In 2015, we'll continue to see mobile taking a larger chunk of the online traffic pie, making it the biggest opportunity for retailers to engage with their customers.


However, despite a surge in mobile shopping, the outlook has been relatively bleak when it comes to expectations vs. reality for the mobile shopping experience. A Harris Interactive survey found that 85 percent of consumers expect the experience on their mobile devices to be better than using a laptop or desktop computer, but less than half (41 percent) thought the mobile experience lived up to their expectations. Mobile is seen as a quick, easy and more convenient alternative to other shopping channels, so consumers won't be tolerant of a slow, clunky or poor shopping experience. Retailers need to ensure they're listening to what customers want and are investing in the right areas of the mobile experience. 


To optimize their mobile properties, retailers need to understand consumers’ behaviors across various mobile devices (e.g., tablets vs. smartphones). Consumers are twice as likely to buy on a tablet, yet more likely to browse on a smartphone. This has huge implications for the ways retailers will optimize the mobile experience across various devices. Retailers must also understand that these devices aren't created equal. Smartphones, for example, have smaller screens, which call for a more streamlined experience. Tablets, on the other hand, have a larger screen, which makes it easier for consumers to enter their credit card information and view products. Optimizing your site to provide an engaging mobile experience that's device appropriate is key to winning a loyal customer base.

Offline and Online Experiences Are Converging
Despite the fact that online sales and traffic are growing at a rapid rate — increasing 12.6 percent during the five-day period now coined "Cyber Week" (Thanksgiving through Cyber Monday) — the fact remains that the bulk of retail sales still occur in brick-and-mortar stores. Consumers are relying heavily on their smartphones to browse for products before they purchase — even when they're standing in a store. It's become apparent that in-store and online are no longer disparate channels. 


Mobile helps to bring the best of online shopping into the store. The key to bridging the gap isn't just permitting shoppers to use their mobile devices in-store, but encouraging it. For example, retailers can offer guest Wi-Fi programs, which give consumers the ability to browse online while they peruse in-store. They can also see ratings and reviews for in-store merchandise as they interact with the physical product.

Many retailers are taking the in-store and digital experience much further than just offering Wi-Fi, however. Smart retailers are embracing (and some might say conquering) showrooming by becoming a showroom. Through price-match guarantee offers for in-store products, which consumers can validate online, retailers can move away from being the showroom and become the shopping destination of choice. Consumers enjoy the instant gratification that comes with buying a product in-store as opposed to purchasing it online and waiting for it to be delivered. 


The only way to combat showrooming is by embracing the trend and encouraging your customers to interact with your brand both in-store and online. Not only does it enhance the customer's shopping experience, but data gathered from these in-store interactions can be leveraged to obtain valuable insight into purchase behaviors.

In-Store Shopping Gets Personalized as Retailers Adopt Beacons and Micro-Location Technologies
In the coming months, retailers will invest in micro-location technologies like beacons and other Bluetooth Low Energy (BLE) technologies to further personalize the mobile shopping experience. These technologies allow retailers to deliver more tailored mobile messages and offers that are relevant to their customers’ locations within a store. 


When it came to mobile shopping, Apple iOS devices led the way, outpacing Android devices in three key metrics: average order value, online traffic and online sales. In terms of sales alone, Apple iOS sales accounted for 15.8 percent, nearly four times that of Android, which drove only 4.4 percent of all online sales. Given the dominance of Apple iOS devices and the recent launch of Apple Pay, retailers are exploring mobile payment technologies in an effort to converge the mobile and in-store shopping experience even further.

Thanksgiving, Black Friday and Cyber Monday Become Cyber Week
The "traditional" holiday shopping season is changing; it's happening earlier and lasting longer. In 2013, there were six fewer shopping days between Thanksgiving and Christmas. Panicked over the potential that a shorter shopping period would cut into their sales, retailers started their holiday promotions earlier. Following resounding success, retailers continued the strategy in 2014, starting their promotions as early as Nov. 1. Early discounts and post-Cyber Monday promotions fueled strong growth in consumers’ online shopping. Online sales were up 13.9 percent over the same period in 2013. 


Despite strong growth throughout the holiday shopping season, key shopping days like Black Friday and Cyber Monday are here to stay as evidenced by the 9.5 percent sales growth from 2013 on Black Friday and the 8.5 percent year-over-year sales growth on Cyber Monday. While Cyber Monday will continue to be the largest online shopping day of the year, these key days will have to share the spotlight with the entire holiday shopping season.

Analytics Key to Winning Customer Loyalty
Analytics provide retailers with the information needed to quickly make adjustments to price, delivery channel or product mix for any given promotion or campaign. 


Retailers can go beyond the analytics of clickthrough rates, mobile traffic and mobile sales to identify and explore the "why" behind mobile application failures, usability issues or other obstacles that lead to failed transactions, abandonment, poor App Store rankings and negative feedback. In the age of empowered consumers, the slightest nuance or misunderstanding can determine success or failure. By providing customers with personalized and relevant messages, retailers are positioning themselves to win their loyalty.


This past holiday season showcased the growing prowess and influence of mobile and online channels in driving sales. If the 2014 holiday shopping season is any indication of where digital commerce is headed in 2015, then retailers have a lot to be excited about.

Jay Henderson is the strategy director of IBM ExperienceOne, a provider of customer engagement solutions for marketers. Jay can be reached at @jay_henderson.