In 2014 online retail sales in the UK rose by 15.8% in 2014 (fetching a healthy £45 billion ). In 2015 this figure is expected to grow even further, increasing a burgeoning part of the UK’s economic recovery.
This rise in sales is not just due to global economic factors technology advances in data-driven marketing, mobile and in-store technology have truly transformed online storefronts and the local high-street.
2014 was certainly the year when multi-channel, data-driven customer engagements truly began to show tangible results. Behavioural and automated data solutions have allowed retailers to customise offers in real-time when shoppers are online, increasing potential sales tremendously.
In 2015 multichannel will continue to evolve with the blurring between offline and online strategies and key trends to look out for include interactive shop windows, automated personalisation and back-office innovation.
One area that has not quite reached its full potential is in-store use of wearables and low energy Bluetooth devices such as iBeacons to increase sales. While these innovations have shown promise in what they can deliver in terms of targeted, location-based marketing services such as coupon promotions, we have yet to see marketers truly take advantage of its capabilities in the UK.
In 2015, retailers need to focus on leveraging new platforms to get the most out of social selling, wearables and interactive shop window experiences. At the same time they should jealously guard the customer relationship from tech giants like Google, Facebook and Twitter.
In addition, one of the hottest trends will be in back-office innovation. It may not be everyone’s idea of ‘sexy’, but an upgrade of the back-office is a vital part of improving front-of-house interaction.
Looking ahead to 2015, these are the key innovations that I believe will significantly impact the retail sector:
Mobile will bring the shop window to life: Next year mobile will play a more prominent role in bridging the gap between consumers and the shop window.
The perfect example: Burberry’s interactive mobile-enabled shop window at Parisian department store Printemps which allows consumers to connect to Printemps’ Wi-Fi and interact with individual scenes from the store’s story board which tells the story of a little boy travelling with his teddy bear from Burberry’s Regent Street flagship store to Printemps in Paris.
For retailers this is a tactic designed to deepen the relationship between brand and consumer with fun, exciting engagement.
Social e-commerce will threaten the brand-consumer relationship: The growth of social e-commerce (evidenced by Twitter’s recent ‘Tweet to Buy’ announcement) will threaten to disintermediate the relationship between a company and its customers. Brands must approach selling through social media channels with caution or they might end up turning into glorified ‘transaction fulfillers’.
3. Digital wallets
Physical wallets will begin to disappear: Companies like Starbucks, with its mobile app that allows customers to pay cross-border and in different currencies, are starting to pave the way for a digital wallet world.
Although the ‘death of the physical wallet’ is not imminent, more retailers will be experimenting with smartphone payments.
4. Automated personalisation
The automation of personalised experiences will take off: Retailers everywhere will be automating the process of using customer shopping data to personalise their experience.
For example, until now online stores predominantly based product recommendations on a customer’s demographic or segment. Soon, online stores of all kinds will begin to personalise recommendations by leveraging a higher amount of real-time customer information, much like in an iTunes or Netflix recommendations list.
5. Systems investment
Focus will turn from front-end ‘shiny stuff’ to back-office ‘nuts and bolts’: Marketers have invested heavily in improving the customer-facing aspects of their online presence, but many have ignored vital back-office improvements required to deliver a seamless customer experience.
Retailers who want to deliver flawless fulfilment and endless aisles will in 2015 be adopting the ‘nuts and bolts’ to upgrade their back-offices, like click-and-collect, inventory management and product information management.
As the physical and digital worlds will continue to collide, retailers will need to work even harder to stay connected to their customer. Technology will play an integral part.
If you are interested in wearables, please visit IoT Tech Expo Europe in London’s Olympia this December, 2-3, 2015.