Nothing stays the same for long.
Here’s our list of the top 10 technology, marketing and consumer trends that can have an impact on retail sales in 2016. See which ones can enhance your year.
Trend 1: WEARABLE TECHNOLOGY
Fashion and function are coming together in exciting new ways—fueling consumers’ craving for wearable technology. What’s hot? Wearable headsets, smartwatches, fitness devices, healthcare monitoring and bespoke fashion design. On top of that, wearable technology is promising to change how consumers shop. In fact, according to a study by eMarketer, 8 in 10 shoppers interested in wearables want devices to enhance in-store experience.1
Retailers should align the shopping experience with growing consumer adoption of wearables in areas such as payments
and personalized, real-time marketing.
Trend 2: NEW RETAIL HOLIDAYS
Consumers love holiday promotions. But why limit them to just the 20 holidays found in the standard U.S. calendar? To spur sales and increase customer acquisition, some retailers are creating their own shopping holidays—and reaping big rewards. For example, the Alibaba Group, a Chinese eCommerce company, logged a record $14.3 billion in sales on Singles’ Day, a holiday they created that’s similar to our Valentine’s Day and is targeted to singles.2
Large retailers have the clout and customer loyalty to create
their own sales holidays with great success. Consider opportunities that fit with your brand and be prepared to launch a competitive response when this happens.
Trend 3: VOICE TECHNOLOGY
Voice-enabled search is catching on in a big way with both teenagers and adults. Speed is the key advantage for both audiences. Searching for products and services via voice technology can be up to four times faster than type-and-click.
The retail advantages of voice technology go beyond search. For instance, a large home improvement retailer recently unveiled a robotic in-store assistant that customers can interact with via its touchscreen and voice recognition module. This technology allows retailers to enhance the customer experience in-store, make their large store less intimidating and free up employees to concentrate on more
Retailers should understand how consumer search behavior is becoming more voice-based and optimize online platforms for natural language.
Trend 4: VIRTUAL REALITY IN THE SHOPPING EXPERIENCE
Virtual reality (VR) is a computer-simulated reality, different from the physical reality in which we live. VR can create sensory experiences that the user can interact with. Progressive retailers are already using VR to create personalized immersive shopping for customers directly in their homes—everything from a virtual store tour to trying on new fashions. VR is a great fit for mobile, too. With their higher screen resolutions and processing power, smartphones are now capable of delivering a VR experience.4
Virtual reality can enhance the shopping experience for customers by providing them with a personalized, interactive retail context that can lead to more sales across all channels.
Trend 5: VIDEO STREAMING
Video streaming has taken off, particularly among millennials. Using video streaming in a sales context, retailers can answer consumers’ questions, show the product in action, explain its chief benefits and/or demonstrate how to use it. All of these retail applications can help increase sales. In fact, 85% of customers say they are more likely to make a purchase after watching a product video.5 With millennials driving this trend, video-on-demand traffic is expected to double by 2019.6
Retailers should assess where there might be opportunities in their own sales process to use online streaming video for product demos, display or customer service.
Trend 6: INTERNET OF THINGS
It used to be that retailers collected most of their consumer data at the point of sale. But the rapidly expanding Internet of Things (loT) is changing that. Today, retailers are deploying and connecting millions of low-cost microdevices and sensors (“Things”) just about everywhere in the retail environment. The payoff: more data collected in more places, providing rich and invaluable insights into consumer behavior, market trends, buying patterns, customer engagement and the like. IoT also helps retailers bring forth new revenue streams with new products and services. It can also lead to cost savings through productivity improvements.7
Retailers should leverage the data collected through connected devices to their best sales advantage.
Trend 7: MOBILE PAYMENTS & ALTERNATIVE PAYMENTS
While mobile payments accounted for only 1.6% of total retail sales in 2015, the percentage is expected to rise more than threefold in 2016.8 And, as more and more consumers adopt this payment platform, its impact on the future of commerce will be tremendous. Many market forces are driving this trend:
Retailers should monitor the ever-changing payment market closely and update their POS terminals and eCommerce platforms to accept new payment methods.
Trend 8: SOCIAL NETWORK BUY BUTTONS
Good news for retailers—social network providers are going commercial. They’re adding Buy buttons, which allow users to shop directly on their sites. While adoption has been slow with millennials and retailers, the growing use of mobile is advancing this trend. That’s because, functionally, it’s difficult to navigate between apps on a device. So the ability to shop directly inside the app you’re already using rather than being directed to a new site or app is likely to be a tantalizing one for consumers and retailers alike.9
Integrate your marketing message with the top social media companies to ensure your products have presence where consumers are “browsing.”
Trend 9: INCREASED SPENDING ON PETS
Americans love their pets. And the numbers confirm it— 79.7 million American households own at least one pet and 42% of all households own more than one pet. It’s little wonder, then, that consumer spending on pets has risen a whopping 25% over the past five years.10 What’s more, we expect sales growth will continue to rise, fueled by changing mindsets toward pet ownership and consumer demographics:
Retailers and veterinarians should focus on understanding the Millennial pet owner’s needs and resource appropriately for the increasing demand.
Trend 10: PERSONALIZATION
The days of the one-size-fits-all customer experience model are waning. Consumers today want personalized experiences and offers tailored to their unique needs. In fact, 77% of shoppers would be more loyal to stores that provided their personal top three customer experience benefits.13 Thanks to data analytics and loT, retailers are now able to deliver exactly that. Large department stores are using beacon technology to push relevant ads to customers’ mobile devices while they are still in the store. Online retailers use product recommendation engines to recommend products based on consumers’ previous browsing history. And some retailers are tailoring their loyalty programs to customers’ specific interests.
Retailers should invest in personalization tools to boost customer loyalty and repeat spending.
For more information about how Synchrony Financial can help grow your business, go to www.synchronyconnect.com or email email@example.com To view additional retail insights and thought leadership, go to www.synchronyfinancial.com/insights
1 “Are Wearables the Next In-Store Shopping Buddies?” eMarketer, 29 May 2015. www.emarketer.com
2 “Alibaba Singles’ Day Sales Reach $14.3 Billion, Smashing Record.” Bloomberg.com. Bloomberg, 10 Nov. 2015. www.bloomberg.com
3 “A Vision for Voice.” National Retail Federation. MindMeld, 12 Nov. 2015. www.nrf.com
4 Guppta, Kavi. “Four Questions on the Future of Retail.” Forbes. Forbes Magazine, 14 July 2015. www.forbes.com .
Burgess, Matt. “WIRED Retail 2015: Virtual Reality Shopping Will Give ‘Tailored’ Experiences (Wired UK).” Wired UK, 27 Nov. 2015.
5 Morris, Leighann. “Digital Marketing and the Impact of Video (Infographic).” ClickZ Digital Marketing and the Impact of Video Infographic
Comments. Video Explainers, 8 Apr. 2015. www.clickz.com
6 “Cisco Visual Networking Index: Forecast and Methodology, 2014-2019 White Paper.” Cisco, 27 May 2015. www.cisco.com
7 ”How the Internet of Things Is Reinventing Retail—A ComQi White Paper.” ComQi, 2 June 2015. www.comqi.com
8 ”Trends for 2016: Six Predictions for What Will Happen.” eMarketer, 14 Dec. 2015. www.eMarketer.com
9 ”Buy Buttons: The Next Step in Social Commerce.” eMarketer, 9 Nov. 2015. www.eMarketer.com
10”Pet Industry Market Size & Ownership Statistics.” American Pet Product Association. www.americanpetproducts.org
11“Veterinary Services in the US: Market Research Report.” IBISWorld, 2014. www.ibisworld.com
12“The Millennial Pet Owner.” February 2014, conducted for Wakefield Research by Nathan Richter. www.wakefieldresearch.com
13“The Retail Customer Experience.” September 2015, conducted by Synchrony Financial. www.synchronyfinancial.com
Synchrony Financial has over 80 years of retail heritage.
This content is subject to change without notice and offered for informational use only. You are urged to consult with your individual business, financial, legal, tax and/or other advisors with respect to any information presented. Synchrony Financial and any of its affiliates (collectively, “Synchrony”) make no representations or warranties regarding this content and accept no liability for any loss or harm arising from the use of the information provided. Your receipt of this material constitutes your acceptance of these terms and conditions.
© 2016 Synchrony Financial. All rights reserved. No reuse without prior written consent from Synchrony Financial.