6 Digital Retail Trends to Look Out for in 2017

6 Digital Retail Trends to Look Out for in 2017

The future of retail is here. From artificial intelligence to interactive shopping centers, technology will continue to influence retail in 2017. Take a look at six of the digital retail trends expected for the upcoming year.

Increased Use of AI Technology for Predictive Retail:

The next generation of smart assistants and connected devices will make shopping more immediate and personalized for the consumer. Devices such as Amazon Echo and Google Home are already using voice recognition to pick up on a user’s daily patterns to make shopping effortless. By knowing the consumer’s buying history, these connected devices can suggest additional products to buy, or even remind the consumer to repurchase an item without needing to even click a “buy” button online. Predictive retail will continue to develop and inspire interactions with consumers before, during, and after purchases.

AI is also being applied to enhance customer service by using chatbots on social media. Brands such as Burberry, Tommy Hilfiger and American Eagle have already started experimenting with chatbots to create life-like conversations where consumers can ask questions, place orders, and get advice. One example is Macy’s On Call, which allows shoppers to wander through selected stores, ask questions, and get location-specific details.

Burberry’s Facebook Messenger chatbot
Burberry’s Facebook Messenger chatbot (Image: Burberry)

Conversational commerce is set to improve in the upcoming year to provide even more interactions between brands and consumers to increase customer loyalty. By incorporating AI more, brands and retailers will also be able to process more consumer data, discover behavioral patterns, and provide a more personalized experience.

The Change of the Traditional Mall & Brick & Mortar Stores:

While E-commerce and M-commerce are continuing to rise, the brick & mortar stores are not going away, and 2017 looks like they will provide a more all-encompassing experience. Retailers will need to enhance and personalize the in-store experience to stay relevant.

Today’s consumer wants everything he needs conveniently located in one place. The shopping center of the future will redefine the traditional mall into a town center or meeting place offering retail, offices, entertainment, residential apartments, restaurants, and other services.

There is a fading distinction between bricks and clicks, and the use of technology in stores will also continue to increase. Using location and proximity-based messaging, stores can communicate with nearby and in-store customers to provide a more “digitally-enhanced” experience. Furthermore, AI and VR technology will be used in-store for trying on accessories using augmented reality, and self-checkouts will become readily available for faster purchasing.

Furthermore, traditional stores will start to specialize their selections with smaller stores. For example Target, who are investing in smaller stores in urban environments to save space & costs, and provide ease and efficiency for consumers.

“Shopping has transitioned from a ‘we need it to we want it’ and that will keep going,” says Vincent Zawodny , vice-president at CallisonRTKL , a global design consultancy. “Residential and commercial will build into spaces, meeting all consumer needs. It will not be a shopping center but an experience. The shopping center of the future will change and we need to do it right.”

Immediacy Continues to be Dominant:

As we saw in the recent Fashion Weeks around the world, more designers are embracing the see-now-buy-now model to produce and sell collections instantly to consumers. These collections are in-season and available to consumers directly after the runway show – both online and in-store.

“The reality is that the customer does not shop early anymore, they buy now to wear now,” says Ken Downing, Fashion director at Neimen Marcus. “It’s important for designers to think about what they’re designing and when it’s being delivered into stores.”

The see-now-buy-now model will continue to flourish into 2017, but other solutions to cater for the consumer’s instant gratification needs will become prominent. The era of free-shipping is no longer an option, but it’s a requirement for consumers, who want to receive their purchases as soon as possible.

An average of 80% of shoppers want the option for same-day shipping, but only 53% of retailers currently offer this option. Today, Amazon and others are experimenting with drones or other technologies to provide faster delivery, however, it is not always practical for smaller retailers. While there are logistical and technical costs associated with this, even if same-day shipping is not an option, retailers will need to find a way to meet the demand of customers with faster delivery options.

Rentable Fashion & The Sharing Economy:

“Rentable fashion” is becoming increasingly popular for consumers who want instant access to luxury, without the high price tag. According to a recent report by Future Market Insights, North America is estimated to dominate the overall revenue share of the global online clothing rental market and is estimated to account for 42.3% market share by the end of 2016. By the end of 2026, the global online clothing rental market is expected to be valued at $ 1,952.4 million.

An Omni-Channel Experience at Rent the Runway's New Flagship StoreAn Omni-Channel Experience at Rent the Runway’s New Flagship Store (Image credit: Rent the Runway, Architectural Digest)

This sharing economy is known for other goods such as taxi sharing, and allows owners to turn their possessions into revenue streams, and is becoming more prevalent in the apparel industry with companies such as Rent the Runway. Consumers can get the benefit of using something for a short period of time, while paying a fraction of the cost – all with instant access online.

The Rise of M-Commerce & Social Commerce

As consumers are becoming more reliant on their mobile devices, mobile commerce is expected to increase in 2017. There are close to 4.8 million mobile payment users worldwide, which is expected to rise in the upcoming year. In addition, 70% of all mobile users in the US are expected to make a mobile payment in 2017, totaling $60 billion in sales.

Retailers are already seeing the benefit of incorporating m-commerce with localization to find stores, voucher codes to use in-store, and one-click checkouts. However, mobile phones also make social commerce more accessible by allowing shoppers to browse, purchase, and share products through various apps and social networks. One example is Instagram’s shoppable photo strategy, where brands such as Kate Spade, Warby Parker and Burberry are allowing followers to view an image and see price, colors and payment options.

While many brands have a large social media and the use of mobiles into their branding strategy, these additional services will provide customers with greater opportunities to shop, browse, and buy on-the-go.

The China Effect:

At approximately $630 billion of sales in 2015, China’s online retail market is the world’s largest, nearly 80 percent bigger than the United States’, which it overtook some two years ago. This shift can be seen both in the consumer expectations and how the apparel industry is positioning itself for the future.

Chinese consumers are becoming more connected, travel more, earn higher wages, and are more aware of global fashion trends. E-commerce accounts for 13.5% of all retail spending, and it is increasing in rural areas as well.

China’s apparel industry is also focusing on building its own brands, investing overseas, and controlling their own global supply chain. One way of achieving this is through the “Made in China 2025” program, aimed at restructuring the manufacturing sector and investing in high-tech projects such as robotics, smart factories, and big data & analytics.

While the rest of the world will be investing in similar technologies to advance, it will be interesting to watch how China is building itself up for the upcoming year.

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Dana Soffer

Dana Soffer

Director, Corporate Marketing
Dana has over 15 years experience in international marketing and communications for leading global B2B and B2C companies. She currently develops and executives corporate marketing communication strategies, builds brand identity and manages public relation efforts. Dana has a BA in Human Behavior & Marketing from Colman College of Management.