Here’s What’s Trending in Retail So Far in 2016
It feels like we were just ringing in the new year, but the first half of 2016 has flown by. We’re actually closer to welcoming 2017 than the past season of well-wishes and resolutions.
And just like our personal experiences, 2016 has flown by for retailers — with tons of new developments. We’ve seen everything from a new Target store design to online dollar stores popping up. These changes have been great for the retail industry, with the first half of 2016 bringing the biggest sales gain in over a year.
However, just because the industry is doing great as a whole doesn’t mean businesses can sit back and relax; they must keep innovating and adjusting to trends. Lucky for you, I’ve pinpointed a few key takeaways from the beginning of 2016 that your brand should take note of.
The Retail Chatbot Craze Began
With Facebook’s launch of its new Messenger platform and the increase in artificial intelligence chatbots, the world is just crazy about those bots. The first brands to pick up on the trend were Uber, OpenTable and GrubHub.
This customer service hack is now used by retailers like Sephora, H&M, and even Pizza Hut and Whole Foods. These brands use chatbots to engage their customers and provide quick service in the form of makeup tips (Sephora), suggesting outfit choices (H&M), remembering past pizza orders and creating recipes.
Fast, but a little impersonal? Sure. But we can’t blame them. A recent Interactive Intelligence survey revealed that consumers value a timely response over any other service aspect. And though customer service is a huge part of a successful business, it is time consuming. Chatbots help alleviate the pressure of this task by always being ready to respond.
Retailers Upped Their In-Store Tech Game
As soon as retailers were catching on to retail apps and beacon technology, new and improved in-store technology took it to a new level.
Rebecca Minkoff, a high-end fashion retailer, recently partnered with eBay to open a store in New York, where the customer experience is heightened by "smart" dressing rooms. Customers can request help, order drinks and change the lighting with digital mirrors, as well as take advantage of the built-in "connected walls." These walls can identify which items are in the dressing room to help recommend different sizes and colors available for the shopper.
John Lewis and Lowe’s are also making strides. The furniture retailer and home improvement giant both recently launched virtual design options where consumers can "try on" different items for their home.
With these retailers jumping on the technology train, other brands will be pushed to innovate with their in-store experience. As 2016 moves closer to its end, we’re sure to see more and more tech home runs like these pop up.
High-End Retailers Took a Hit
Consumers are in a savings cycle, and high-end retailers can feel it. Morgan Stanley analysts are even naming the trend a "High-End Recession," with retailers like Restoration Hardware and Nordstrom feeling the pain.
Nordstrom reports that its discount chain, Nordstrom Rack, is performing better than the flagship. And Restoration Hardware has taken the high-end fall hard, with shares dropping 23 percent after consumers put on the purchasing breaks.
This drop in sales for high-end retailers is a warning sign for big-box stores as well. As consumers become more calculated about where and how they spend, they’ll seek out retailers that offer lower price points for the same kinds of items. Furniture and appliance retailers like Ikea are likely to take an even greater leap with in-home assembly of its merchandise, which gives the brand the ability to drop prices much lower than other similar retailers.
No matter what kind of retail business you’re in, these trends will have an impact at some point, whether in the later months of 2016 or years from now. Take note of these trends, take advantage where appropriate, and line yourself up for future retail success.
Kevin Cundiff is vice president of retail for Fortegra Financial Corporation, a Tiptree Financial Inc. company. Fortegra and its subsidiaries comprise a single-source insurance services provider that offers a range of consumer protection options including warranty solutions, credit insurance, and specialty underwriting programs.
