What Last Year’s Retail Trends Mean for 2012
In a presentation she delivered at the National Retail Federation's Annual Convention & Expo in New York City yesterday, Forrester Research's Vice President and Principal Analyst Sucharita Mulpuru reviewed four retail trends her firm identified from the recently completed holiday shopping season, along with what the findings will mean for retailers looking to get ahead in the new year. Here's a look at those trends:
1. The online pie grows. The consumer migration to shopping online continued in last year's fourth quarter. Fifteen percent of all holiday sales were transacted online in 2011, up from 6 percent in 2005 and 13 percent in 2010. Consumers are heading online in droves not only for the convenience of the channel but for the deals that can be found on the web. One such deal is free shipping, which consumers now expect as part and parcel of the online shopping experience, Mulpuru said. This phenomenon is helping spur the growth of shipping clubs (e.g., Amazon Prime, ShopRunner). In 2010, 9 percent of online shoppers were enrolled in one of these types of programs; that number swelled to 12 percent last year. These programs are adding incremental shoppers for brands, Mulpuru noted.
2. Search and email still win. While newer technologies such as mobile and social media may get all the headlines, standbys email and search marketing still produce best. The channels continue to dominate retailers' marketing spend (54 percent of their total marketing budget, on average), and for good reason. According to Forrester's State of Retailing Online 2011 report, more than 50 percent of transactions for hard goods retailers that were marketing driven had search or email as the first or last touchpoint. For soft goods retailers that number was greater than 60 percent.
3. Mobile is making a retailer's job a lot harder. Consumers increasing use of mobile devices is no secret. Consider the following: 28 percent of consumers said they shopped via a mobile device over last year's Thanksgiving weekend; just 9 percent of retailers said their company doesn't have a mobile strategy, compared to 26 percent in 2010; and 28 percent of retailers consider their mobile strategy to be "evolved" vs. just 20 percent who thought so in 2010. Direct sales are only a small part of the mobile equation at this point (accounting for $6 billion in sales in 2011, just 2 percent of all retail sales). It's the cross-channel impact of mobile marketing and commerce that retailers should be concerning themselves with, Mulpuru said. Technologies such as 3-D cameras and near field communication are great, but consumers are most frequently using their smartphones for simple tasks such as checking a store's hours, looking for the nearest retail store or looking up product information.