Stories that “retail is dead” are just noise—the retail market is thriving for companies who are embracing the changing nature of how people shop and for companies who are equipping their brick and mortar stores with lessons learned from digital-first brands like everlane, m.gemi, and Stitch Fix.
When we combine the best practices of e-commerce and in-person shopping, retail growth will be unstoppable. Here’s what’s happening, who’s doing it well, and why more retailers need to follow suit.
Customer Service Is More Important Than Ever
Companies that have the capabilities to understand each consumer intimately— their past purchases, when they shop—will be able to create more personalized shopping experience. This is the secret to StitchFix and Rent the Runway’s successes. Equipping associates with the power to see both in-store and e-commerce data, thanks to unified commerce, will help revolutionize retail.
The Rise of Mobile Payment
Convenience is king. Last year, $30 billion dollars was spent at in-store mobile-wallet terminals says Inc, and that volume is projected to increase 10 fold by 2022. “Mobile drives loyalty and drives sales. For business owners with loyal customers, mobile wallets—and especially the rewards programs often built into them—can be a powerful way to strengthen those ties,” says Chris Gardner, co-founder of mobile-wallet provider Paydiant.
Cryptocurrency Is Hitting Retail, Too
Whether or not you firmly grasp the value of bitcoin, Square just announced a test around buying and selling bitcoin, nodding to the fact that cryptocurrency and retail commerce are on the horizon. It’s too soon to predict if paying for boots with bitcoin will become the norm, but being ready to accept cryptocurrency as payment is the first step.
Consumers Expect Radical Transparency
That’s the secret behind everlane’s success. As they describe their ethos: In traditional retail, a designer shirt is marked up 8x by the time it reaches the customer. At Everlane, we believe customers have the right to know what their products cost to make, so we reveal our true costs, and then show you our markup. This is how the digital-first company has grown to $18 million in revenue. After swearing for years that they would remain a digital brand, everlane just announced they are opening two brick and mortar stores in New York and LA to foster an even stronger connection with their consumers. It’s this intersection between online community and in-store experiences that will pave the path for the future of retail.
Stores Are Offering Immersive Experiences
And less inventory. Taking a cue from retailers like Bonobos, Nordstrom just announced its small-store format, where consumers can “touch” products, but chosen purchases are ordered online and shipped to home. In place of racks and racks of clothes, a juice and wine bar, on-site tailor, and even manicures will be offered. Saks Fifth Avenue is also testing this concept with its Wellness floor in the New York headquarters. While Nike recently opened their 55,000-square-foot SoHo store in New York that’s equipped with a basketball court, soccer zone, and treadmills for testing shoes, they just announced they are opening a new Midtown NY headquarters with completely custom experiences, including a NikePlus members-only destination that offers exclusive access to products and appointments with Nike Experts.
Sophisticated Price Marketing Converts Purchases
Technology paired with consumer data is helping retailers target shoppers who leave items in online carts. The average abandonment rate is nearly 70 percent, so there is a lot of opportunity for improvement. Companies like PebblePost, which sends a physical postcard with a targeted discount toward an abandoned cart item, or providing steep discounts on cart items, are helping retailers reduce shopping cart abandonment. There is a lot of growth in this area—the key is to find the balance between enticing a customer with a great deal and reducing sentiments of privacy invasion.
This is an exciting point in retail as new technologies propel the industry forward. Brands have the tools available to better suit the needs of their consumers, wherever they shop. Those who figure that out will thrive. The rest– well perhaps for them, the industry will in fact be dead.
Since 1985, KWI has been a leader of cloud-based retail solutions. KWI offers a complete commerce solution for specialty retailers of all sizes. KWI’s cloud-based technology solutions include point of sale, merchandising, eCommerce, CRM and loss prevention for brands such as 7 For All Mankind, Bandier, Veronica Beard, David Yurman, Theory, Tom Ford, and Nars. The company is based in Greenvale, New York.
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