A sunny-but-disruptive outlook for retailers
The past year has been tough for the high street, with retailers struggling to drive sales and many high street stores shutting their doors permanently. By contrast, internet retailers saw resilient growth with online sales in November 2012 being up 18% year-on-year. Here, Jon Worley - director of customer interactions for The Logic Group - explains what is likely to be a sunny-but-disruptive outlook for the retail year ahead.
Among Worley's predictions for the shaping and reshaping of the retail landscape in 2013 are a number of factors, such as growing consumer expectations and usage of the continually evolving mobile channel - not only for finding things but for paying for them too - and marketers' smarter usage of increasing volumes of customer data, not only transactional but behavioural as well, and the devolution of the traditional multichannel model.
Here, then, are the key retail trends to watch for:
- The mobile's new role The choice of payment methods that retailers can offer to consumers seems to be constantly evolving and it's often 'make or break' in a purchase decision. As devices and network speeds improve and more brands take on a mobile-first approach, m-commerce will continue to accelerate and build momentum in 2013.
Alongside the growth of mobile transactions, NFC and contactless payment methods could dramatically change how people pay for products. Services like PayPal and Apple's iTunes have already begun to centralise payments on mobile, but the next step will be services such as iZettle and Square that offer sellers the ability to receive card payments with their existing smartphone and a simple plug-in device. Being able to accept payments either online or in-store will be invaluable for merchants of all sizes in the coming years.
- The digital wallet The digital or mobile wallet will offer more than just another payment option. Focusing on the mobile wallet from a pure payments perspective massively undervalues the impact mobiles can have. It could be said that tapping a phone is as useful as tapping a card, and as such, there's no real benefit to the customer. Thus, in 2013 payments will finally merge with loyalty and rewards. These three separate businesses will converge to make it easy for consumers and merchants to automatically leverage appropriate coupons and offers.
- Inter-connected consumer data Loyalty schemes and purchasing habits are two sides of the same coin when looked at from a data perspective. If approached correctly, this data can be incredibly valuable for brands in 2013, not just to build relationships with consumers but to drive sales. Loyalty schemes such as Tesco Clubcard, Nectar and Superdrug Beautycard are heading toward the point where they can connect up their huge data repositories with smartphones, in-store Wi-Fi, geo-location data, mobile coupons and purchase technology.
This kind of inter-connected data, and the pre-requisite opt-in from consumers, brands can target shoppers with personalised offers based on their own purchase behaviour. 2013 will see this sort of data turn consumers into fans and to drive sales.
- The devolution of multichannel Online only retailers such as Asos, Amazon and eBay are still very much the darlings of the e-retail world, and have in the past cast doubts on the future of the high street. Most high street retailers would do anything for the kind of growth reported by the likes of Asos, but the shift to multichannel by the high street means that online only retailers are now missing a key element, a high street presence.
This year will undoubtedly see multichannel in reverse, where online-only retailers will bring pop-up shops and digital windows to the high street using tools such as augmented reality (AR), QR codes and mobile apps to bring in the customers. eBay has already put this into practice by testing out its own pop-up shops during 2012.