5 Emerging Trends of Modern Retail

Emerging technologies and platforms will fundamentally transform the way buyers interact with their preferred merchants and brands. New battle lines are being drawn across various channels of retail and radical shift in buying pattern and preferences will exhibit pronounced shift from traditional standards.

5 trends that will contour retail in the immediate future:

1. Brands will increasingly represent a certain culture or ethos

Shopping, these days, are being increasingly driven by emotions than by sense of utility or the size of the buyer’s wallet. Millennials are gravitating towards brands that either demonstrate character or that seem to represent their personal attitude and preferences. Changing preferences and growing social consciousness has added newer dimensions and challenges to how brands represent and position themselves. More often than not brands are having to re-engineer their internal culture to align with and emanate a certain kind of external identity.

Funnily though brands and their ambassadors are increasingly becoming culture-coders-and-shapers, pushing consumers out of traditional strictures and shopping parameters. The consequences will only emerge with time, but businesses today proactively and decisively absorb and reflect the contemporary cultural buzz across the whole plethora of media – traditional and new age. Ostensibly more brands are influencing and shaping people’s choice, almost setting up wire-frames and stereotypes of a collective external cultural identity that ensures one’s integration with the modern world out there. Yet the brand themselves cannot be absolved of their views and responsibilities towards the emerging world views, values and cultural transformations.   

2. Quicker fulfillment & deliveries for online commerce

Most brands that have online presence, with similar product offerings and mixes, have started appearing largely homogeneous and are scampering to demonstrate differentiators. Recent studies indicate growing consumer impatience while waiting for product shipments. They are unwilling to wait more than 4 odd days now, down from nearly from a 6-day wait in 2012. Drones may only add the ‘Wow!’ element. In order to stay sharp and deliver distinct value to their customers, in the increasingly saturating e-commerce ecosystem, e-commerce platforms will have to comprehensively re-work their logistics and supply chain to ensure shorter wait for consumers. 

 3. Experiential merchandising on the rise

The millennials clearly are wary of the old model of retailing where businesses focused strictly on products getting sold! The millennials are increasingly demonstrating their affinity towards the experience rather than the product itself that they actually purchase, in-store or online. This trend of penchant for engaging and engrossing experiences while shopping is here to stay and grow, and it won’t just be served by re-modelling of stores or web pages. Technology will play a huge role in adding layers and astonishing experiences around tradition retail models. Advent and proliferation of social, mobile, analytics, cloud, virtual reality, IoT and AI will encourage brands to reinvent their merchandising strategies.

4. Subscription … subscription … subscription

Going by a McKinsey report, over 15% of internet shoppers signed up for subscriptions in 2017 and there are no signs of that going down anytime soon in the future. Curated products and assortments, in keeping with one’s past buying pattern and experiences only adds to the experiential retailing paradigm. If a consumer gets extended commercial benefits for signing up, along with assurance of deliveries of preferred merchandise on pre-defined frequencies, he would be more than happy to stay hooked as a loyal shopper, for long. This simmering pattern of curated personalized merchandised, delivered to the consumer’s door on a regular basis has started to look like a trend that has arrived to stay and will continue to gain momentum.   

5. Omni-Channel is here to stay

Proving detractors’ doom’s day predictions wrong, brick-and-mortar stores are not going anywhere, anytime soon. Their roles have transformed from just being the last mile point-of-sale counters to being an important cog in the much larger scheme of things as far as merchandising, interest generation, customer experience and branding is concerned. It is no more a dichotomy, rather an emerging truth that businesses will have to adopt, adapt to and grow across multiple channels.

Shoppers belonging to different decades have different shopping patterns, tastes, methods and choices. Whether they’re from the 70s, the 80s or the 90s, or whether they’re the Gen-X, Y, Z or the Millennials or the Baby Boomers – they all have their primary preferences of shopping methods and platforms. It has been observed that individual platforms and shopping experience have a direct and measurable impact on their buying pattern and decisions. The challenge for the retailers lie in being able to be seen and be actively present across platforms. At the same time, they need to create a framework of logistics, empowered by technology, to keep fulfillment streamlined for business across channels. For consumers, they seek a seamless shopping experience across various channels including but not limited to physical stores, kiosks, shop-in-shop, b2c websites, social media, marketplaces, etc. 

The evolving retail landscape entails preparedness for brands to be able to charm and capture the buyers’ imagination at one or multiple channels of sale, keeping them engaged throughout the cycle of their decision making and eventually monetising their preference at some point-of-sale, online or brick-and-mortar. Focus on post-sale service, across channels and quick resolution of consumer grievance, if any, are bound to hold retailers in good stead, in the long run. Embracing these emerging trends and the transforming pattern of preferences and leveraging rapidly evolving and fundamentally disruptive retail technology landscape, brands and businesses can keep their nose ahead in the blitzkrieg of upcoming brands and aspirational retail players.   

Adoption of a new solution, product or service – the ‘psychology’ behind !

What led to the purchase of my second smart phone? Funnily, the question reared its ugly head only after I received the bank’s text reminder on my older phone that the expense has been credited to my already dwindling credit card. What was the rationale behind the buy? Should I blame it on my unenviable track-record of binge buying or was there a genuine (unidentified) need?

It’s never been easy to unearth the reason why a logical being would stray from rational economic behaviour. It’s been even more difficult to fathom how an individual’s values influence his choices in the in a given marketplace or under what circumstances an individual or an organization would like to be introduced to a new paradigm, product or service.

Typically, social scientists have drawn our attention to four distinct behavioural aspects that influence such adoptions or even considerations:

• Worth: Buyers tend to attach ‘perceived’ value to the alternatives available, rather than the subjective ones, fundamentally associated with the products or services.

• Frame of reference: Most buyers invariably resort to benchmarking a new offering against the existing alternatives (no wonder the buying decision becomes such a critical one when a new product is genuinely an ‘original’ concept with little or no comparable offerings. Uniqueness may not always be a ‘virtue’, after all!).

• Valuation: More often than not these referential evaluations boil down to a discrete ‘gain-loss’ comparison.

• The clincher: It has been found more often than not that the perceived notion of ‘potential losses’ leave far greater impact on consumers’ buying decisions than ‘probable gains’ out of adopting a new alternative.

The above-mentioned aspects merely cement the hypothesis well-established in behavioural economics known as the ‘Endowment Effect’ which says that people essentially assign greater value to things they own vis-à-vis the ones they don’t. Endowment effect in its very definition states that it becomes functional whenever the quantum of consumer’s ‘minimum acceptable benefits’ exceeds the ‘cost of acquisition’ that the consumer is willing to part with.  Such decisions are almost always influenced by, in addition to other cognitive considerations, a bias for status quo in a tight coupling with risk aversion.

Some economists assign a value three times greater to people’s regard for what they already have as compared to their perceived value of a new product they intend to invest in. So it’s a no-brainer that to get a prospective customer to buy into a fresh idea, the new product has to establish ‘perceptual’ benefits, many-a-times, over existing alternatives.

In some cases the ‘perceived’ improvements, it has been found, is just one of the many factors influencing the decision. Precise messaging, appropriate conveyance of the ‘value’ of the new product and veracious and credible ‘influencers’ are some of the strongest levers. Early identification of fans of the new concept go a long way in creating and leveraging convinced champions of the cause, in adoption of a new technology, product or service. Understanding and appreciation of the ‘need’ and the ‘behavioural pattern’ of the prospective users is no less important than ‘innovation’ itself, when it comes to predicting or even strategizing the success of the new product. 

Well, I am still trying to solve my own case of identifying the psychology behind burning some well-preserved cash in acquiring a fresh piece of the glitzy gadget. Till the time I manage to figure it out, I have decided to refrain from investing in another new smart device or even another ‘trending’ piece of OS or pricey app, at the least.