The retail industry is constantly evolving to meet changing consumer demand. Customers used to look at merchandise and compare prices by visiting their favorite brick-and-mortar stores. Online shopping portals revolutionized the retail industry by making it possible for customers to compare product features and prices without leaving their homes. Now retailers are looking to drive foot traffic and increase profits by capitalizing on industry trends. Here's how the retail industry might evolve during the next five years.
Many retailers are now using brand analytics to make business decisions. Management expert Peter Drucker once said that you can't manage something if you can't measure it. Brand analytics gives marketers insight into why customers are loyal to specific brands. Some of the factors influencing loyalty in the retail industry include accessibility, value, and emotional connection. Using brand analytics makes it possible for retailers to build strong brands, which makes it easier to increase market share, charge a price premium, and attract high-quality employees. Retailers will be using brand analytics to identify opportunities for building brand awareness and attracting new customers.
Customers typically pay for their purchases with cash, credit cards, or debit cards. These payment methods aren't going away, but more people will be using mobile payment applications to pay for their online purchases. Some retailers already allow customers to pay with Paypal, putting them a step ahead of their competitors. Within the next five years, more retailers will be accepting Square Wallet, Google Wallet, Paypal, and other mobile payment methods. A report from Forrester Research indicates customers will make approximately $90 billion worth of mobile payments in the next few years, making this a retail trend you can't afford to ignore.
Some retailers will also overhaul their loyalty programs. These programs drive in-store traffic and prompt customers to purchase featured items. Unfortunately, many customers do not continue to participate in these programs after signing up. This usually happens because the rewards linked to the program are not relevant, or because it takes too long to accumulate enough points to be eligible for a reward. Instead of offering the same rewards to every customer, some retailers will personalize their loyalty programs. These personalized programs will offer rewards based on shopping habits and the social information stored on each customer's card.
The retail industry is always changing, so retailers must be prepared to implement new programs and tailor their offerings to customers. Over the next five years, expect to see more retailers offering mobile payment options, using brand analytics to improve their businesses, and overhauling their loyalty programs based on shopping behavior. These changes will help companies in the retail industry do a better job of attracting customers, creating targeted offers, and increasing profits. Following these industry trends will also make retail companies more competitive in their target markets.
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