The last few years have been extremely dynamic for retail. From the introduction and integration of social media to the booming growth of mobile e-commerce to the trend of the sharing economy, the industry is constantly changing and evolving.
Which trends are going to determine the direction that retail is going to take this year? In this post, you’ll find out more about the most impactful strategies that can help your business stand out and take the quality of your services to the next level.
Top 10 Retail Trends to Watch in 2020
Retailers have already seen the advent of many trends we now take for granted — such as same-day delivery or personalized shopping offers. Some changes in the industry are incremental while others can make or break the success of your business. It’s better to be prepared for what the future holds ahead so that you are not caught unaware when new changes arise. Here are the 10 most significant trends in retail for 2020:
1. Further development of mobile retail
The rise of mobile shopping apps is not news to seasoned retailers; however, in 2020, the integration of mobile will penetrate all facets of the industry — searching for a physical store, paying for a purchase, or connecting with favorite brands. The applications of mobile technology in e-commerce are numerous:
- Mobile wallets. The growing popularity of Apple Pay and Google Pay will result in the substitution of credit cards with mobile wallets. For retailers, this creates payment processing challenges — business owners need to make sure they are fully equipped to accept payments from smartphones.
- Mobile apps help create new in-store experiences. With an app, you can connect with store visitors inside and outside the physical shop. Walmart, for instance, uses a mobile app to help users to order food online, Sephora sends texts and notifications to make sure a prospective customer doesn’t miss out on updates and special offers.
- Loyalty programs go mobile. Smartphone-based loyalty programs help diminish the skepticism customers usually feel when it comes to collecting bonus points after in-store purchases since they have no idea how to benefit from them later. With an app, a retailer can explain how the loyalty program works in detail and let users track their balance and reap benefits at all times.
2. Logistics and supply chain automation
All parties involved in supply chain activities are greatly affected by automation. Although we are still a couple of years away from fully integrated autonomous vehicles becoming a reality, companies like Amazon already use robots to run errands in the warehouses. Other automation tools in the logistics sector include:
- Blockchain-powered supply chain trackers that help trace errors back to a responsible party.
- Intelligent fleet management systems that help supply chain managers control processes remotely.
- Wearables that track employee safety and improve the quality of performance monitoring.
- Drone-based last-mile delivery.
3. Deeper integration of CRM tools
The growing popularity of CRM platforms is not news — they have been on everybody’s mind for at least a few years now. In 2020, customer relationship management solutions will become essential — after all, market value is expected to reach 80 billion dollars by 2025.
Platforms will become smarter and more versatile, as well. Right now, there are few tools that offer integrations with IoT or AI — but the potential of pairing CRM and innovative technologies has been recognized in Silicon Valley and amongst other tech hubs. According to statistics, the introduction of AI to the CRM sector can bring retail business owners an additional $1.1 trillion by the end of next year.
Self-service platforms and tools for managing VR/AR experiences are also expected to be integrated into customer relationship management platforms by the end of the year.
4. Personalized e-commerce
E-commerce business owners have to deal with a lack of physical connection with customers. Shoppers prefer to purchase goods in-store because, this way, they can make more informed buying decisions and avoid disappointment.
To gain a competitive advantage, e-commerce store owners have started using personalization strategies — offering personalized recommendation reels to users that match their preferences and interests. In 2020, personalization will be even more precise and data-driven. Here are the practices retailers need to consider implementing this year:
- Using omnichannel personalization through social media targeted ads, RFID, and Bluetooth beacons. Companies like SearsHometown have already launched ads that tell users where the nearest brand inventory is.
- Machine-learning solutions become more widespread and help retailers offer Netflix- and Spotify-like personalization, adjusting not only the reel but the thumbnail of the product and the page layout to users’ on-site behavior.
- Remembering which items a user checked out and starting new sessions from where they left off. Online shoppers will be able to experience continuous customer journeys.
5. Cloud computing spread
Although many retailers are using the cloud as-is, the types of platforms they choose are likely to change by next year. According to McKinsey, the number of on-premise storage platforms is likely to decrease by almost half — out of 43% of business owners who use these solutions now, only 29% will stick with them by the end of the year.
Growing security awareness will fuel the growth of decentralized encrypted storage platforms. According to the same report, only 12% of retailers were using dedicated private clouds in 2019 — by the end of this year, the estimate is set at 20%.
The opportunities that cloud computing provides invade in all retail sectors:
- Building digital assets and storing more customer data.
- Improving the efficiency of day-to-day management operations since relevant insights are easier to access.
- Increasing the speed of order fulfillment since different stores can exchange data easier, offering customers a seamless experience.
6. Marketing and advertising automation
Over the last couple of years, retail business owners have realized the power of retargeting and running online ad campaigns as opposed to using traditional promotion tools; however, the full potential of marketing automation is still uncharted territory. Here are the practices of e-commerce and brick-and-mortar store owners should follow to improve the efficiency of their marketing efforts in 2020:
- Planning email marketing based on customer behavior — knowing the time that people usually check their inboxes, the amount of time it takes them to read emails, and incorporating these insights into email drips will help strengthen the connection with customers.
- Templated ads. Intelligent marketing systems and tools help marketing managers save time and not have to set up every new ad from scratch. Instead, they can use assistive technology to calculate optimal bid settings and audiences for the next campaign.
- Predictive marketing tools — these systems help detect marketing insights based on the result of the campaigns you currently run.
7. Dynamic pricing
Fixed pricing models have proven to be inefficient — especially once businesses started scaling internationally. Naturally, salaries and living costs are different across the world — which is why the products of international brands with fixed pricing are simply too expensive for third-world and developing countries.
To help retailers scale comfortably, the concept of dynamic pricing was introduced. In 2020, the following dynamic pricing tactics will become widespread and practiced among new businesses to penetrate the market:
- Penetration pricing — starts off by offering products at the lowest cost possible and increasing pricing after the brand has established a reputation and a following.
- Peak pricing — adjusting the price according to demand to ensure a stable turnover of goods.
- Segmented pricing — developing offers at all price ranges to appeal to wider consumer markets.
- Geo-based dynamic pricing — lowering the cost of goods for customers who live in places with a lower median salary, in order to remain competitive in local markets.
8. Location-based offers
Location-based services have become a must-have for brick-and-mortar store owners, especially since physical stores are facing a huge crisis due to the rise of e-commerce.
The fluctuating speed of internet connection worldwide has made location-based services harder to introduce; however, with the implementation of 5G this year, Bluetooth and beacon- and location-based services (LBS) will become easier to implement and use.
Retailers will be able to guide users to their stores and provide in-store directions to create a better shopping experience.
You can consider implementing LBS in one of the following ways:
- Bluetooth’s beacons;
- Connected devices and IoT;
9. Deep retail
Some of the trends, mentioned above, are intertwined with deep retail — the practice of using big data, machine learning, and the use of AI to get to know the customers on a deeper level.
In 2020, face and voice recognition technologies are expected to develop at an impressive pace — the value of the voice recognition market is expected to grow almost three times in the next four years.
Being able to detect customers’ emotions from their tone of voice and facial and eye movements will give business owners more authentic, impossible-to-forge data, taking personalization to the next level.
Needless to say, as the amount of data business managers can collect grows, the need for new regulations and restrictions will appear — by 2025, deep retail practices will be strictly regimented.
10. Higher user experience demand
Another trend, rather — a challenge, that small retail business owners will have to deal with is growing customer expectations set by global corporations like Amazon. Needless to say, large-scale analytics and automation tools are often too expensive for nascent businesses to afford — yet, global corporations have these innovations at arm’s reach.
In 2020, the discrepancy in technological means that corporations and SMEs have access to will increase even further as more innovations make it to the market.
Trendwatching and implementing the best technology practices in 2020 will expose you to new markets and scaling opportunities cut operating costs, and help to convert leads into customers more efficiently.
To make sure your business is equipped with the right technology for new industry transformations, contact bvblogic. We will build an efficient solution for every facet of your business — marketing, logistics, and customer relationship management. Contact us and let’s discuss your project together.