The 5 Most Critical Trends That Digitalize Retail
The rise of mobile technologies and digital disruption have changed the retail business as well as the implementation of the levers of retail mix and the behavior of shoppers. As one of Turkey’s largest and most deep-rooted digital commerce solutions companies, we discussed 5 critical digital transformation trends in retail.
1. Omnichannel DNA
While omnichannel may have been considered a buzzword at one point, this approach is now the new normal for today’s merchants. According to a McKinsey & Company report, omnichannel shoppers now represent one in every three shopping journeys. More than 60% of shopping journeys now have a digital component for either research or transaction—a share that is projected to grow at a rate three times that of in-store sales.
The future of omnichannel shopping journey relies on voice assisted shopping, set to grow over the next four years to a value of US$40 billion by 2022. Most smart speakers depend on assistants from existing e-commerce giants – which opens up new doors into consumers’ homes for retailers.
Hyper-personalization may be summarized as the use of behavioral and real-time data to create highly contextual products, services and communication strategies relevant to a specific individual in a particular situation. AI, image recognition and mood analyses provide a deep and detailed understanding of consumer attitudes, reactions and patterns.
There is an undeniable reality that customers want and expect a personalized shopping experience. Today 91% of customers prefer retail brands that offer personalized recommendations and 3 out of 4 customers are ready to actively share their personal data in exchange for more personalized campaigns.
Whilst the importance for deep retail (to generate hyper-personalization) continues to grow, some major players have already mastered the importance of tailoring their offerings to their customers.
3. Social Commerce
As the use of digital technology for businesses becomes increasingly popular, this convergence of social media and e-commerce provides companies with a vehicle to simplify the purchase process and make effective use of social media advertising for their brands.
There are some key important figures that must be taken into consideration:
- 43% of consumers research products online via social network platforms
- 55% of the global online population is affected by social media
4. Marketplace vs Brand Competition
Marketplaces are popular online shopping platforms, since customers are attracted to the large number of products offered, typically at lower prices. The top online marketplaces in the world amounted to $1.66 trillion in sales in 2018. Sales on marketplace websites, like those operated by Alibaba, Amazon, eBay and others, accounted for more than 50% of global online sales in 2018, according to Internet Retailer’s analysis. The growth of these e-commerce websites is one of the reasons why many large brick-and-mortar retailers, including sportswear e-retailer Fanatics Inc. recently began selling on marketplaces.
Despite what you might have heard, brick-and-mortar retail isn’t dead. In fact, 61% of shoppers would rather shop with brands who also have a physical location than ones that are only available online. Nearly 80% of shoppers will visit an offline store to purchase an item they need or want immediately.
On the other hand, retail apps are one of the 4 most commonly used applications on users’ devices. Data for the first half of 2019 show that smartphone users mostly use mobile apps for purchases.
Briefly, taking these trends into account, do you think your company is prepared to stand out in the future of the digital commerce industry?