THE INSTOR BLOG

For Smart Retailers: Consumer Trends to Watch for in 2018

Retail is rapidly evolving in India with major brands entering with technology backing them. Intense competition and an ability to adapt to an aggressive competition are the defining factors driving them towards creating a more customer-centric environment. In 2017 alone there was demonetisation, GST and increased FDI norms, each affecting the industry as a whole. The traditional retail structure is facing a massive shakeup with reimagined store experiences on the rise.

Below we highlight the trends that are poised to dominate the retail sector.

1. Inclusion of Technology

Tech plays a huge role in all aspects of life, making it natural that retail embraces it too. A game changer has been data analytics. With analytics on consumer behaviour, sharper segmentation and more targeted advertising have been made possible. Conversational AI better known as chatbots are expected to be significantly utilized for creating new standards for business intelligence.

Tech-infused with the core of every store offered experience is also picking up the pace. Augmented reality (AR) and Virtual reality(VR) which were an afterthought are now coming to the forefront with the ushering of the digital era Most shoppers start with an online search, even if the end purchase is at an offline store. If stores learn to leverage this data to gain insightful information about the customer the experience can be heavily personalized.

H&M and Sephora have both introduced chatbots on the messaging platform Kik with positive results. The H&M chatbot allows people to pull together complete outfits from scratch and allows for the customer to have a highly personalized experience.

2. Resurgence of Brick and Mortar Stores

Immersive shopping experiences are all the rage. Despite the traditional format on the decline, people are embracing innovative designs, with a fresh shopping experience to offer. Brands are redefining what it means to have an offline store with creating stores which help forge a more emotional connection between customers and the brands.

In India, where e-commerce is on the rise, the physical shopping experience is still appreciated with the expected growth rate between 13-15% over the next couple of years. E-commerce still counts for only 2% of the total sales that take place, making it a smart move to venture into physical sales. Eyewear brand Lenskart, furniture store Pepperfry, and online retailer Myntra have been opening stores in not only metro but tier 2 and 3 cities to increase revenue generation.

3. Tailored Experiences

As big data becomes readily available to retailers across the board, shoppers now expect their purchases to hold personalized value. The specialized niche market is growing at a rapid rate, making the existing marketplace incompatible in both online and offline areas. A major push towards personalized experiences is being initiated.

Retailers who manage to tell a story, fit into a lifestyle or be completely unique all fit the bill of being embraced by customers. As far as tangible products go customers are becoming pickier. The era of going with the flow is ending and embracing a unique sense of style being adopted.Online startup for gifts BigSmall is a prime example of this with claims of an organic growth of 150% in less than 18 months of going live, the startup has been embraced by the Indian audiences for its quirky product line and unique options.

4. The Organic Movement

The increase in awareness amongst customers has led brands also to become more transparent about the process that is taken to deliver the finished product. Products are being chosen on whether or not they were sourced responsibly or if they are good for the environment.

Any brand that placed sustainability over everything else while curating their messaging will continue to thrive. The vegan revolution also ensures that the sale of synthetic luxury will also enter the Indian market. Fabric or man-made materials are here to stay. The quick rise of Patanjali stands testament to the growing awareness in the Indian consumer’s mind. Any brand with clean core values is ensured to survive in the retail market.

5. Customer Care & Engagement

Every brand needs to cater beyond the checking counter. Every brand is trying to attain returning customers, so it is essential the experience that a customer receives from both the online and offline commerce hubs remains effective and easy. Integration of tech is an essential factor to tap existing and potential customer base. The penetration achieved by Google voice, Alexa and Echo are great examples of what 2018 will offer customers in terms of a seamless platform.

Alexa and Siri have both achieved the AI technology strong enough to name places based on what the customer wants, harnessing data from these sources would give retailers an edge which allows for an engaging experience.

6. Frictionless & Consistent Omnichannel Approach

As illustrated above the channels taken by the customer to reach a particular product are diluting in one another. Any agile retailer knows that the integration of the online and offline shopping experience is essential as it benefits the customer shopping journey, making it wholesome.

Equipping the store associates with the right technology would also be heavily appreciated as the conversion rates would increase if the sales staff can genuinely help a customer. As far as omni-channels go, almost every e-commerce retailer with a physical presence offers home delivery as part of their strategy. Case in point, Lenskart and Zivame both take orders in the store but get it delivered to either the store or the customer’s house depending on the customer convenience.

7. Rise of the Digital Wallet

More than anything else demonetization has pushed this trend onto the retail industry. With the support of the government and easy adoption by the masses, it is slated to rise exponentially in 2018. With almost every major player out with a digital wallet, the trend will continue to gain momentum. Retailers need to incorporate multiple payment options in the interest of the customer and retaining their experience. India has adopted cashless experience and the growing fondness of the millennials to their mobiles will make sure it continues.

PayTm, the largest digital wallet in India has achieved a penetration of 230 million registered users in a year which is more than that of even WhatsApp’s 200 million user database, prompting big name brands like PayPal to try and enter the market.

Awareness has been steadily increasing in the customer base and now is the time to put them first. Quality of merchandise and service are essential but if 2017 was any indication, even one bad experience by a customer can change the complete outlook of a brand in the public eye. A smart retailer would make sure that the consumer trends are followed and the experience is seamless.

 

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