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Retail Trends

Tying it All Together

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While most retailers are focused on extracting every bit of revenue from the current calendar year, industry analysts are already looking ahead to identify the trends that will take root, the technologies that will be judged “top priority” and other changes in store for the retail landscape in 2013.

What follows is a compendium of educated guesses and forecasts, and the editors at STORES would like to think that most of them have value. Still, if we had to sum up our expectations for 2013 in one word, it would be “convergence” — tying together the web, Big Data, analytics, mobile, social and all things digital to deliver a seamless experience to shoppers.

Such convergence all but necessitates a cease-and-desist on the term “channel”: Shopping channel, multi-channel, omni-channel — all are yesterday’s news. Today’s shopper doesn’t bat an eye at the quest for omni-channel integration: She expects retailers to have a 360-degree view of her shopping behaviors, and her patience is wearing thin.

It’s quite possible that 2013 won’t be the year retailers get it all done. In fact, there’s a really good chance that it will take a few years for retail companies to tie all these technologies together to ensure that an engaging and relevant experience awaits shoppers whether they visit your store or browse your website from a computer, tablet or smartphone. Still, if this isn’t your goal, it’s time to rethink your priorities. is not going away, nor are eBay, Apple, Google or Facebook. These tech titans have played a starring role in reinventing the customer experience — and they’re not done. Amazon will open the doors of its overhauled fashion site any day now — a prospect that should make apparel retailers’ blood run cold. eBay has embraced mobile shopping and is rolling out same-day delivery of products from online and offline merchants in San Francisco.

Apple maintains its maniacal focus on refining customer capabilities and delivering products with broad appeal. Google Fiber promises to speed up connections in a way no one had predicted, and Facebook continues to change the way shoppers interact via social channels.

A number of retailers — Macy’s, HSN, Nord- strom, Saks, Urban Outfitters, Walmart and Starbucks — continuously raise the bar by making the customer the centerpiece of every business decision. They move quickly to try new things and are not afraid to make bets on emerging technology with an eye toward reshaping the customer experience.

Walmart, Nordstrom and Starbucks all have innovation labs. At Nordstrom, some of their best work is done on the selling floor — inventing and reinventing customer-facing technologies until they get it right.

Maybe a partnership is a better way to get up to speed quickly in the changing retail arena. Target has written the book on partnering with designers — the well-known and the up-and-coming — to bring curated shops to its customers. Nordstrom’s investment in Bonobos provided quick entry into a web-only business and equally swift learning.

Relentless pressure to do things faster may be felt most acutely by the CIO, particularly as every aspect of the business seeks to infuse technology into its daily operations. Here too, partnerships may be a means to keep up — and, in some cases, to get ahead.

Retail trends once took years to play out. Not anymore. As new ways to shop emerge — think virtual shopping walls now popping up in train stations — and an increasing number of retailers dabble in same-day delivery, there’s no question that retailing in 2013 will continue to be imbued with challenges. What’s the secret to survival? Change quickly. That’s the 10,000-ft. overview; what follows are predictions from a more granular perspective.

Mobile, Digital
The year just concluding will be remembered as the one in which mobile became embedded into the lives of consumers — and thus into the hearts of retail businesses large and small. Harnessing the power of mobile and digital technologies is imperative, especially since data shows that customers who use their mobile devices for commerce spend eight times as much as store-only shoppers.

• Mobile and digital technologies will continue to breathe new life into traditional stores via mobile POS, virtual fitting rooms, personalized fit options and smart shopping carts.

• Mobile POS will experience hockey stick growth, led by specialty retailers that will reduce former cash-wrap counters to a fraction of their size.

• Engaging with mobile shoppers is imperative; it can’t be intrusive — it must be relevant, simple and immediate.

• Showrooming is here to stay. How can retailers combat it? Step up the customer experience. Price matching, loyalty programs and personalized in-store service are good places to start.

• On the operations side, expect the “bring your own device” movement to gain ground.

Big Data, actionable analytics

Retailers display mixed emotions about Big Data: They recognize that it is fundamental to business — even on a par with real estate, inventory and labor — but a topic they once discussed with zeal is now talked about in more prudent tones. As executives try to keep their heads above the data deluge and leverage the information they collect, they’re acknowledging that execution is much harder than they thought it would be — especially as data from social media becomes more nuanced and complicated.

A growing number of CIOs concede their companies are leaving money on the table as a result of poor information management, so the emphasis is squarely on extracting value from all of the information from every customer touchpoint. If you’re still trying to clean up your data, you’re way behind. Merchants’ day-to-day decision-making must be based on the data that underpins the business. Art still has a place, but it’s several paces behind science.

• Over the next 12 months, retailers who have spent the last two years wrestling data issues into submission will yield positive results, creating a greater divide between those proficient at optimizing information and those that are struggling.

• The customer experience is at stake, and the window is closing on those who fail to use pertinent data to improve the shopper experience across myriad touchpoints. If retailers are not talking to shoppers on a more personal level, the conversation will end … quickly.

• As Big Data becomes more mainstream, visualization applications intended to help retailers more quickly recognize trends and business swings will gain greater adoption.


The customer has been king since the beginning of time, but he can now shop any store at any time from anywhere. To say he now has most of the power seems like an understatement, and that power is derived from the mobile device in the palm of his hand.

All this power and knowledge has negatively impacted pricing, making it essential for retailers to pull out all the stops when shoppers engage with their brand. It’s not just about selling; it’s about cultivating a relationship.

• Millennials will reshape retail … for better or worse. They display characteristics closer to their grandparents’ thriftiness than their parents’ endless consumption. They pay attention to what goes on behind the scenes at big corporations and are less enamored with luxury items. Value is key; experiences are preferred.

• Consumers are becoming increasingly polarized; the latest figures show 15 percent of Americans — approximately one in seven — live below the poverty line, and the economic gaps between shopper segments aren’t expected to close any time soon.

• If you want to get closer to your customers, talk to them via social media. Brands that have a two-way conversation gain insight into what their customers want and care about.

In an effort to be more in sync with today’s shopper, technology is being woven into the store environment wherever it makes sense. Getting shoppers to interact with in-store technology translates into more time spent on the selling floor and more opportunities to cross-sell and up-sell. Services are more vital to the mix, too.

Time-starved consumers covet speed and convenience — arch enemies of the supercenter and big box shopping experience. Neither is on the brink of extinction, but they can’t ignore these shifts in shopper behavior. Smaller footprint stores are trending; big boxes need to reconfigure real estate to aid shoppers who want to get in and out quickly or risk losing them.

• In a major shift, retailers will invest more in store associates, not less, in the coming year. The need to have subject matter experts — rather than mere order-takers — is critical if retailers are to hold fast to the promise of a better shopping experience.

• Look for faster growth in urban environments, a reversal of the pattern seen for several decades. Target and Walmart have set the stage; others will follow.

• Traditional stores will take on new importance as retailers dive into same-day delivery and use the store on the corner for replenishment. Sophisticated inventory management systems are essential, which tells you that only a handful will make the grade.

• “Gamification” is gaining ground in retail, slowly reinventing the way associates learn. Retailers are beginning to apply elements of game theory to the teaching of sales tactics and internal procedures.

Alternative Payments
Juniper Research expects sales via mobile payment to increase nearly 400 percent by 2017. Gartner basically agrees, forecasting the space to grow 350 percent by 2016. Little wonder, then, that this area will be top of mind in the coming year — and why so many players are vying for a piece of the pie.

One to watch in 2013 is the newly-formed Merchant Customer Exchange (MCX), a consortium of big retailers who are working on a mobile-commerce solution that will be able to integrate a wide variety of consumer offers and retail programs. Backing from this group should also help ensure wide adoption. Merchants say the app will reduce costs and inefficiencies and help them get closer to customers with personalized offers.

• It’s fair to say that retailers will continue to live in a mixed payments world where magnetic stripe cards and chip-and-pin cards vie for the upper hand. Still, if global business cohesion is the goal, universal acceptance of EMV is a must — and time is not merchants’ friend.

• In mid-November, Square surpassed $10 billion in processed payments (not including Starbucks payments). With a recent launch in Canada, future growth is ensured, but not without competition from the likes of PayPal Here and Visa’s If more retailers follow Starbucks’ lead, Square’s small but mighty retail footprint is certain.

• A digital wallet saves time and is one less thing to carry, but a wallet-free world is not in the cards for 2013, mostly due to limited near field communications (NFC) capabilities and too few merchant devices capable of transacting mobile payments.

Emerging technologies — NFC, mobile POS, touchless payments, RFID, e-receipts — are all expected to drive near-term retail sales, improve efficiencies and increase customer satisfaction. They also pose challenges to retail security.

Loss prevention professionals have worked hard over the last 24 months to break free of the traditional security-only mindset. Today, more and more have a seat at the table as companies gain greater understanding of how LP permeates every aspect of the retail business — from e-commerce data breaches to dealing with security issues raised by mobile POS.

• Organized retail crime is increasing and becoming more violent. Retailers must have a plan to address it and everyone needs to know it.

• It’s time for retailers to build out their wireless infrastructure to support the expanding role of mobile in the store. Most will have two goals: engage the customer and protect the air. Look for wireless deals to be signed at a fast and furious pace as shoppers expect to have Wi-Fi everywhere they shop.

• Retailers are likely to partner with experts to build security services that enable them to stay ahead of disruptive technologies. With so many changes coming down the pike and limited manpower, staying ahead of the bad guys these days takes a village.

Tech Talent
The job of the retail CIO has never been easy, but layers of additional complexity have been added over the last decade. Next year should bring a shift away from the “do more with less” mantra and toward doing more with digital innovation.

The problem is that while so many of today’s retail CIOs are nothing short of brilliant when it comes to large-scale proprietary systems, they’re quick to admit that digitizing the interface between the enterprise and the customer is not their strong suit. Equally problematic is the fact that they’re being pressed to lead digital technology innovation for every aspect of the business, from marketing to store operations to HR.

• The competition for tech talent is heating up as retailers try to keep up with the pace of change.

• Looking to ramp up expertise and jump the learning curve, some retailers will buy small, entrepreneurial tech companies, delivering talent, expertise and speed to market in one fell swoop.

• Vendor partnerships will become more prevalent. The need to get from A to Z virtually overnight requires rethinking relationships and opening some once-restricted doors.

Cutting Edge
As if there are not enough tasks on retailers’ plates for the coming year, there are a handful of trends bubbling up that require attention — and, perhaps, action. Will any or all of these unfold in the next 12 months? It’s hard to say, which is reason enough to pay close attention.

Keep an especially close eye on the rise of television commerce (t-commerce). Various reports indicate that nearly half of Americans are interested in making purchases directly from their TVs. It’s not yet clear whether they’ll use their remote control or mobile device for these transactions, but t-commerce is coming — and there’s no time like the present to prepare for the future.

• Google Glass puts a camera, microphone, wireless communications and a tiny screen into a pair of futuristic-looking lightweight glasses. Eccentric? Yes. Toy for geeks? Sure. Still, it makes you think about wearable technology like health monitors for patients with chronic conditions. Doesn’t seem all that quirky now, does it?

• Online shopping app Wanelo filters many websites including major retailers and Amazon. Like Pinterest, it saves items the user likes but isn’t ready to purchase onto a board; unlike Pinterest, it directs the user to the purchasing destination.

• Google Fiber recently went live in Kansas City, offering 1Gbps speed for just $70 per month — radically faster and cheaper than what traditional ISPs are offering. On an Ethernet connection, Google Fiber boasts speeds of 600 to 700Mbps, with Wi-Fi topping out around 200Mbps. Once this bar is raised, there’s no going back.

• PayPal has joined with Comcast and TiVo to enable consumers to buy goods from their TV sets. Zeebox, a popular U.K. app that recently launched in the United States, already has Comcast, Viacom and NBCUniversal as equity stakeholders and a partnership with American Express to enable purchasing. Expect the floodgates to open soon.