As we enter the first weeks of 2019, and retailers finalize their plans for the year ahead, it’s important to understand what new opportunities are shaping the retail landscape. Throughout 2018, Sidecar spoke with retail experts in our ongoing influencer interview series. Hailing from Internet Retailer, MIT, the Spiegel Research Center, and more, these industry leaders helped us understand the biggest trends impacting the retail business.
In these conversations, Sidecar asked one common question: What trend or opportunity do you think will have the biggest impact on retailers in 2019?
The responses we received varied and signal a year of major transformation for retailers. Whether it’s grappling with the rise of marketplaces or enhancing customer experience, there are several areas where retailers will need to adapt their strategies for the year ahead. Below some of the brightest minds in the industry share their predictions for the future of retail.
1. Marketplaces Will Evolve to Capture Greater Customer Loyalty
In retail, the role of platforms, also known as marketplaces, is growing significantly. The Amazon marketplace is a very unique platform. Google Shopping Actions is another example. They are not selling directly to you, but they are enabling you to buy from retailers like Costco or Walmart. Pay systems, like Samsung Pay, Apple Pay, and Google Pay, are also platforms. And all of these are vying for the customers’ loyalty.
Let’s say I tend to buy electronics from a specific retailer, and I just started using Apple Pay for my purchases. While using Apple Pay, I see that there is a more affordable electronics retailer on the platform. So who am I most loyal to? Did I just shift my loyalty from the retailer to the platform?
The growing role and influence of platforms in consumers’ lives makes a new problem and opportunity for retailers for the next several years.
Tom Collinger | Executive Director, The Spiegel Research Center,
A research division of Northwestern University’s Medill School of Journalism
2. Actionable Analytics Will Unlock Customer Value
I believe this biggest opportunity in 2019 is analytics. I think retailers have a lot of data now. Even mid-sized retailers have database programs today. They can track what customers are buying or not buying, browsing or not browsing, what device they’re using, etc.
Having all of that data is great, but I think it’s important to use analytics to figure out what types of customers you have, and personalize your communications to them. Then you can push them to become omnichannel customers or grow them in some other way that’s valuable to your brand. That’s really the biggest opportunity.
Rebecca Wang | Professor of Marketing, Lehigh University
3. Retailers Will Uncover New Customers on Marketplaces
Retail has been changing so rapidly in the last couple of years. With consumers shifting to mobile and consumers shifting to marketplaces, it’s moved away from the traditional online retail channels. I think it has been challenging for retailers to know what strategy will work best for them, in particular for marketplaces.
There are good and bad aspects to marketplaces, and for many years the industry was really focusing on the bad and how they take away from the retailer. But the real opportunity here is that retailers can market their products to a different audience and attract new customers through marketplaces. Taking advantage of these new channels will be retailers’ biggest opportunity in 2019.
Fareeha Ali | Research Director, Internet Retailer
4. Customer Experience Will Reign Supreme
Customer experience analytics is a big area of growth, which will help retailers get insights on their target audience and how to improve their online and offline experiences. Retailers should really focus on customer experience and make the right kinds of investments to improve it. That means making the shopping experience more enjoyable, making it easier for shoppers to find what they’re looking for, and effectively meeting their needs.
Customer experience leaders outperform the market significantly and customer experience laggards underperform the market significantly, according to Forrester. They found that top companies that focused on customer experience had a 43% increase in returns over five years, compared with companies with poor customer experience which saw a decrease of 34%.
Sharmila Chatterjee | Professor, MIT Sloan School of Management
5. Competition Won’t Be Going Anywhere
I think the biggest challenge and opportunity in the years ahead will be increased competition. I think brick-and-mortar retailers are finally tackling the e-commerce phenomenon. And I think that they’re going to up their game in terms of both pricing and making the shoppers’ experience better.
That’s where I see the future of retail in 2019. It’s an acknowledgment that competition actually will increase for brick-and-mortar retailers, both at the brick-and-mortar level as well as their e-commerce operations. That’s going to intensify pricing competition online and raise the bar for how retailers serve shoppers in their stores. Retailers will really have to up their game across the board in 2019.
Rafi Mohammed | Pricing strategy consultant and author of The Art of Pricing: How to Find The Hidden Profits to Grow Your Business