Top Retail Trends This Holiday Shopping Season and Beyond
Last year, the National Retail Federation (NRF) found that during the winter season, consumers planned to spend a total of more than $1,000 on average for items like decorations, candy and gifts, and a nearly equal amount of respondents planned to make their purchases online (56 percent) as did at department stores (53 percent).
Finding a balance between physical and digital channels is essential for retailers when competing during peak shopping months. And for retailers looking to maximize sales, these five trends will continue to be key to success.
Stores Move Up the Sales Funnel
Thanks to a rise in e-commerce, brick-and-mortar stores are serving as an opportunity for retailers to create a meaningful, memorable experience for consumers, who will then go on to remember their time in the store when making an actual purchase online.
A study conducted by Forrester Consultancy found that experience-driven businesses that focus on investing broadly in customer experience report 1.6 to 1.9 times higher year-over-year growth in customer retention, repeat purchase rates, average order values and customer lifetime value compared to companies not investing in the customer experience. The bottom line is in-store experience is still valuable in the sales cycle.
Pop-Up Activations Are Key
Pop-up experiences allow companies to extend their brand beyond the traditional storefront or digital channels, and create lasting impressions with potential customers. For example, Swarovski Crystal’s recent pop-up activation, which resulted in sales exceeding the company's target goal and increased store traffic.
By adding an additional, unique form of interaction, retailers can better engage with consumers in an uncommon and, therefore, more memorable ways. Brands that create memorable experiences this holiday season are the ones likely to see a boost in sales.
Voice Technology Speaks Volumes for In-Store Shopping
Voice technology is being used to drive shoppers into physical stores. Smart retailers are optimizing their voice strategy to ensure voice-enabled assistants like Alexa and Siri can accurately answer questions about store hours and locations. This gives retailers a leg up on competitors that haven't optimized this new channel and may not show up in a consumer’s voice search.
E-Commerce Brands Turn to Brick-and-Mortar
E-commerce accounted for just 10 percent of total retail sales in the second quarter of 2019. Direct-to-consumer brands are taking note that physical locations can offer entire sensory interactions, with both products and store employees, that are more multidimensional than any online platform can provide.
This trend is reinforced by e-commerce giants like Amazon.com, which is looking to go physical, with plans to expand to thousands of brick-and-mortar locations by 2021. Being able to foster in-person connections creates a differentiated experience that will keep consumers coming back to a brand, something a website alone simply can’t drive.
The Concept of 'Store as a Warehouse'
As the popularity of buy online, pick up in-store (BOPIS) continues to grow, more physical locations will begin acting as distribution centers. This trend allows traditional retailers to tap into their vast network of stores and give them an advantage in the speed to which they can put products in customers’ hands due to proximity. Target’s strong second quarter performance is a prime example of this. Offerings like in-store pickup, drive-up and delivery contributed to more than three-quarters of Target’s digital sales, which is up 20 percent year-over-year. Brick-and-mortar retailers that tap their network of stores for online sales will see a big return.
A common theme resonates throughout the biggest trends driving retail sales this year — retailers can’t focus only on online or in-store. The combo of both is what’s driving sales this holiday season.
Toni Thompson is president of retail solutions at RRD, a leading global provider of multichannel solutions for marketing and business communications.