The retail and wholesale industry continues to face major disruptions in 2017. Amazon’s purchase of Whole Foods underscores the fluid nature of the industry at this juncture. As the market witnesses the rise of multiple retail channels, increasing customer expectations and confident spending across major geographies, companies in the retail and wholesale sector that show agility in responding to the shifting landscape can reap rich dividends.
The current retail and wholesale sector is impacted by a host of complex factors. Understanding and awareness of the key trends that influence this sector are essential for future success and growth. Here are the key trends that are transforming the industry in 2017:
1. Disruption and change: The rise of new technologies, new business models and evolving customer expectations will make sure that the next few years in the industry are defined by disruption. Innovative players that are able to harness the winds of change and exploit fresh opportunities to realise profits will own the future.
2. Personalisation: Physical or online stores that can name a customer and offer assistance on the basis of their past purchase behaviour will continue to do well. However, customer expectations are evolving with most looking for a higher level of personalization, far beyond the traditional method of simply greeting someone by their first name. Stores that are able to offer innovative and personalised experiences by designing customer journeys in accordance with customer preferences will thrive in the coming years.
3. Seamless shopping experiences: Over the last 5 years, both B2C and B2B customers have grown to expect a smooth, hassle-free shopping experience. As customers switch regularly between in-store shopping to online shopping, stores that are able to deliver a seamless experience of transition from online to offline (and vice versa) are likely to dominate the future.
4. Omnichannel: The rise of ecommerce and changing customer expectations are pushing more and more companies to adopt omnichannel marketing. Ecommerce players like Amazon are opening up brick-and-mortar stores while Walmart is investing heavily in ecommerce. Small and large retail and wholesale businesses will have to build omnichannel capability if they are to survive and grow.
5. Smaller stores: As consumers continue to lean towards a more personal shopping experience, smaller stores that offer more convenience and easy accessibility will become more popular. We have already seen big-box retailers like Ikea and Target jump on this trend. It will also benefit local businesses and speciality stores that are able to deliver personalised and innovative services to the customers.
6. Mobile payments: While not ‘new’ per se, we are likely to see a much larger number of businesses enable mobile payments in 2017. Digital wallets are expected to take off in a big way this year and stores that do not offer the mobile payment option are likely to fall behind the curve and lose business.
7. Speed and discounts continue to deliver: Stores are offering limited-period discounts, same-day or same-hour shipping options, flash sales, pop-up stores and virtual markets to woo customers. Businesses that are able to deliver instant shopping possibilities, discounted rates and faster shipping will win more customers.
8. Strong global consumer demand: Consumer spending in the US continues to rise, while consumer spending in the UK dipped for the first time in four years. While the global consumer demand is expected to stay strong, the UK may witness a slowdown in the economy over the next two years. Retailers in the UK are responding to the uncertainty by combating the cost pressures through better utilization of technology. Online specialists and discounters continue to thrive.
9. Innovative, branded products: Crowded stores tend to smother customers with choice and businesses that are able to deliver effective, differentiated products continue to profit. Innovative products that customers can trust will continue to attract loyalty, cutting through channels and trumping discounters. Many brands will also use innovative marketing techniques – crowdsourcing of product ideas, for instance – to engage customers and seed brand loyalty.
10. Automation: AI (artificial intelligence) technology is beginning to see an increase in adoption by the wholesale and retail sector. While the key application of the technology focuses on customer experience improvement, it is also increasingly being used for improving business processes and reducing costs.
Is your business ready for what’s coming next? One effective and easy way to augment your cost reduction measures and to improve operational excellence is outsourcing your F&A functions.
How does that work? Why not talk with our Wholesale & Retail expert Nishant Kumar. Call on Call 0870 803 1033 or email on Nishant.firstname.lastname@example.org.