In early March, more than 8,000 retail professionals attended the Shoptalk 2019 retail conference in Las Vegas to learn how retail is evolving and how to plan ahead to boost sales and stay competitive. To help retailers, suppliers and their technology partners gain clarity on the most relevant, overarching retail trends, we found the following themes permeated this year’s Shoptalk discussions.
Omnichannel investments increased
To keep up with consumers’ heightened expectations of service across retail touchpoints, retail companies continue to adapt to the different needs of online and in-store shoppers.
At one end of the retail spectrum, traditional brick-and-mortar retailers are embracing a more innovative mindset. They are adapting their business strategy to include online shoppers’ needs for seamless online service, reliable logistics and product reviews to boost consumer trust. 1 Stendardo, Rich. 4 Key Takeaways From Shoptalk 2019. Total Retail. March 12, 2019. For instance, apparel retailer Farfetch was inspired by the fact that 85% of in-store customers are not digitally connected to retailers, which prompted the company to add digital experiences to its stores. Farfetch’s goal was to improve the in-store experience by allowing consumers to use technology to connect with design creators and to access products from the company’s entire global assortment to maximize variety. 2 Maras, Elliot. Innovators share ways to eliminate buying friction while boosting omnichannel presence. Retail Customer Experience. May 19, 2019.
At the other end, pure-play e-tailers are acknowledging that foot traffic remains a key factor in retail success. According to Internet Retailer, brick-and-mortar stores still accounted for 86% of total retail sales in 2018, although that figure has steadily declined from 95% in 2007, as the convenience of e-commerce lures consumers online.3 Ali, Fareeha. A decade in review: Ecommerce sales vs. retail sales 2007-2018. Digital Commerce 360. February 20, 2019. Physical stores act as effective destinations for consumer engagement, faster returns, pickups and alterations, and brick-and-mortar stores often support their local communities.4 Petro, Greg. Shoptalk 2019: What’s Next For Retail? Forbes. March 14, 2019.
Also, since purchases are still primarily emotionally driven, physical stores are where multisensory experiences and customer relationships are created.5 Gonzalez, Melissa. 6 Provocative Takeaways from Shoptalk 2019. Advertising Week. March 15, 2019. That helps explain why Gap is building physical stores in areas shoppers already visit in person, such as next to a Trader Joe’s, rather than in malls.6 Stendardo, Rich. 4 Key Takeaways From Shoptalk 2019. Total Retail. March 12, 2019.
Ultimately, retail channels work together to impact sales. For instance, more than half of Nordstrom store visits start online, and nearly half of shoppers use their smartphones in stores to look up product and company information. In addition, almost 30% of Nordstrom’s online purchases start in stores.7 Heller, Laura. 8 Things We’ll Talk About Long After Shoptalk. Forbes. March 13, 2019.
AI’s influence expands
At Shoptalk 2019, many retailers and suppliers spoke of the common challenges of drowning in data and lacking an effective strategy on how to use artificial intelligence (AI) to connect with consumers.
Currently, 20% of brand marketers are using AI; however, 75% of companies recently surveyed say they will actively use AI in the next two years. This is good news, as retail companies need to learn how to apply AI and retail data insights to accurately anticipate shopper behavior to predict successful new products, target new customers and drive sales. 8 Petro, Greg. Shoptalk 2019: What’s Next For Retail? Forbes. March 14, 2019.
Today, progressive retailers are creating more personalized customer experiences, including using AI for personalized marketing.9 Petro, Greg. Shoptalk 2019: What’s Next For Retail? Forbes. March 14, 2019. This trend matters because a new study found 93% of companies with a personalization strategy boost their revenue.10 O’Shea, Dan. Study: 93% of companies with a personalization strategy boost revenue. Retail Dive. March 18, 2019.
Another booming AI trend reflects the adage ‘What’s seen is sold.’ Visual search, namely using prominent product images for efficient product search, is driving sales. For instance, Pinterest lets retailers share images of their entire product catalogues to evolve from e-commerce to social commerce.11 Heller, Laura. 8 Things We’ll Talk About Long After Shoptalk. Forbes. March 13, 2019. More than 50% of all consumers trust images more than textual information, and the figure exceeds 80% for apparel and home furnishings, especially among younger shoppers.12 Heller, Laura. 8 Things We’ll Talk About Long After Shoptalk. Forbes. March 13, 2019.
AI can also help to solve out-of-stocks and abandoned carts. Out-of-stock remains a trillion-dollar problem in retail and consumer goods. Seventy percent of customers still leave a store without making a purchase, and an average retailer reports 60% demand forecast accuracy, at best.13 Anand, Sahir. ShopTalk 2019 recap part 3: AI can check age-old retail problems. Microsoft Industry Blogs. May 21, 2019.
Loyal consumers are the retail jackpot
A growing number of retail leaders are investing in strategic marketing to boost brand reach, sales and loyalty. For instance, Mattel is investing more in digital content to expand the American Girl brand to online movies, TV series, gaming, and other digital content.14 Stendardo, Rich. 4 Key Takeaways From Shoptalk 2019. Total Retail. March 12, 2019. In addition, Dollar Shave Club has launched a new men’s magazine called MEL to boost men’s awareness of the importance of self care, and build brand engagement and loyalty.15 citation stuff
Another way retail companies are trying to attract loyal consumers is by creating marketing campaigns that reflect consumers’ personal, social, and environmental values. An estimated 68 million American adults base their purchasing decisions on their values – and say they will spend up to 20% more on environmentally sound products.16 Petro, Greg. Shoptalk 2019: What’s Next For Retail? Forbes. March 14, 2019. Also, a recent survey found sustainability was a product attribute that 87% of U.S. Millennial Internet users would be willing to pay more for.
As such, strategic marketing can help retailers and brands boost engagement, sales and loyalty to maximize lifetime value per customer.
Amid the complexity of industry upheaval, retail events like Shoptalk illuminate major market trends – including omnichannel, AI and loyalty-building – helping retail companies gain clarity, establish their priorities and focus on improving the consumer experience to stay competitive.