Something happened this past holiday season that retailers have never seen before. Consumers retreated in record numbers from stores and malls to shop online from the comfort of their home – and retailers took notice.
For the first time in history, online sales outpaced in-stores sales. Take a look at the stats: Cyber Monday was the biggest day in U.S. online shopping ever; e-commerce revenues were up 16.4% from 2014. Conversely, brick-and-mortar sales decreased 10.4% from 2014, according to ShopperTrak.
So what does this mean for retailers in 2016? In short, consumer shopping preferences are continuing to shift online and retailers relying heavily on in-store sales need to rethink their strategies – and fast – to stay profitable.
Tactic #1: Follow Shoppers Online
Some of America’s largest retailers – Walmart, Macy’s, Gap, J.Crew and Target to name a few – plan to close hundreds of locations in 2016 and focus on digital initiatives that keep pace with consumers’ changing behaviors and drive revenue. Analysts predict others will follow suit. Citing the growth of e-commerce companies that offer low prices, fast shipping and the convenience of online shopping, many brick-and-mortar retailers have struggled to stay profitable; moving online may be the answer.
Tactic #2: Get Personal with Shoppers
Retailers are combining personalization and innovation to attract new and repeat customers who want unique, engaging shopping experiences. For example, emerging online brands Warby Parker and Bonobos are revolutionizing the retail experience with ideas like their widely successful “guide shops,” which allow consumers to try on products, receive fashion advice and place orders to be shipped to their home. Create an experience people enjoy and the investment will pay off.
Tactic #3: Bridge the Omni-channel Gap
More and more retailers are blurring the line between online vs. offline. The “new” shopping experience moves customers seamlessly from mobile app to website to retail store, generating engagement, sales and revenue along the way. Physical stores are now an extension of the online store, serving as fulfillments centers for e-commerce orders and pick-up locations for consumers who buy online and ship to store.
Tactic #4: Go Mobile
Hyper-localized offers, app-based push notifications and other emerging mobile technologies are game-changers for retailers’ customers and staff. Location-aware targeting lets retailers communicate with consumers at the moment they’re most likely to make a purchase, offering discounts and recommendations based on a customer’s location, purchase history and other targeting factors. Plus, mobile devices give sales people new tools to serve their customers better, from real-time inventory and promotions lists to instant check-out for in-stock items.
Trend #5: Look to the Future
Looking past the year ahead, changing consumer behavior will continue to shape the future of retail and only those who adapt will secure a portion of consumers’ growing spending power. While emerging technologies will allow brands to deliver a seamless and hyper-personalized experience across multiple channels, investments in data will provide the opportunity for optimization and analysis of results.
As consumer shopping habits continue to shift, retail as we know it may never be the same. But one thing is for certain, retailers who don’t keep pace with changing preferences will struggle to hold onto their customers’ loyalty and spending. What tactics do you predict will have an impact on retail in 2016?