By Brian Walker
CEO & Founder, Retail Doctor Group
In our previous blog article we covered off: 5 future retail trends (immersive experiences versus transactional shopping, agile and distributed supply chain, the rise of the branded offer, customer loyalty loop, hyper personalisation); how are legacy brands adapting to the trends and; what steps your business can take to stay ahead of the curve.
In this final part of the series, we look at our next set of future retail trends and what should retailers do next to stay ahead of the curve.
The Rise of Social and Live Commerce
Social media has had a significant impact on the growth of social commerce. Consumers are turning to platforms like Facebook, Instagram, Google Shopping, and TikTok to interact with retailers.
The trend of using social media for shopping has been accelerated by the pandemic, which led to more people shopping online and using social media to interact with retailers. This was, of course, born out of necessity during lockdowns, and by the natural progression of innovation and evolution.
RDG’s recent research shows that 47% of respondents use social media channels for shopping. Furthermore, the social commerce industry in Australia is expected to grow steadily over the forecast period, recording a CAGR of 9.8% during 2022-2028, and expected to account for A$4.4 billion in 2030.
Retailers will need to focus on building a robust social media presence, creating engaging content, and providing a smooth and seamless path to purchase in order to take advantage of this trend.
This will help retailers cater to the needs of the younger demographic and ensure customer satisfaction. Retailers that do not adapt to this trend risk being left behind in the e-commerce market.
Case Study – Instagram | In-Chat Payment Feature
To deliver an easy and frictionless experience to customers, Instagram has introduced a new way to make a purchase on their platform. With this new feature, users can purchase products from businesses and track orders via direct messages on Instagram in the United states.
RDG Differentiation Tip – RDG research shows that social media usage varies significantly for different personalities, not just age groups. Thus, it’s vital that brands understand their customers’ emotional needs and invest in the appropriate channels, rather than waste valuable time and marketing spend on social media channels just because they’re on-trend.
Brand Humanisation – Driven By Neuroscience
Consumers are driven by emotions when making purchasing decisions, with 95% of those decisions being influenced by emotions, according to Harvard Business School. In order to connect and resonate with consumers, brands must have a deep understanding of who their customers are and what journey they are on.
When there is a fine line separating one brand from another, the one that has formed an emotional connection with the customer is more likely to close the sale. Personalisation and humanisation of a brand allows for building trust and inspiring loyalty by understanding the needs and desires of customers, and creating a personalised experience that aligns with their emotions.
Brands will connect with consumers on a subconscious level, creating shared values and principles that help craft offers and messages that align with the customer’s identity and emotions. This means that brands will increase their focus on building an emotional connection with customers, ensuring that they connect with the brand’s attributes and cues.
In the future, retailers will focus more on creating emotional connections with customers through personalised and authentic experiences that align with the customer’s values and emotions. By doing this, retailers can ensure that their brand is not easily swayed by competitors’ offers and solicitations.
Brands that establish an emotional bond with their customers will have a greater chance of building trust and loyalty, thereby driving sales.
RDG Differentiation Tip – Brands must understand the underlying mechanisms of consumers’ behaviours – how they make decisions, what motivates them, and how they respond to different marketing messages. RDG Limbic Insights™ can help you gain deeper insights into customer needs, preferences, and pain points, which can inform business decisions and improve overall performance.
Get Circular/Sustainable Sustainability
The trend of being mindful of packaging, its impact on the environment, and reusing or recycling products has grown as an after-effect of the pandemic. The pandemic created an increased focus on environmental and sustainable practices, particularly when it comes to packaging and its impact on the planet.
According to RDG Insights 2022, 46% of Australians say their values and the way they look at life has changed since the pandemic. As a result, they are now focused on their impact on the planet, and are more aware of the need to recycle and reduce waste. Additionally, an increased number of Australians state that their values and perspective on life have changed since the pandemic began. Brands will need to adapt to this trend by finding ways to connect with customers in a sustainable way.
This could include using local suppliers, offering eco-friendly products, or actively engaging in sustainable practices that align with local and Australian businesses. Consumers are not only looking for brands to make donations to sustainable causes, but they also want to see brands actively participating in sustainable practices. Brands that can demonstrate their commitment to the environment and sustainable practices will likely see an increase in customer loyalty and brand trust.
Case Study – Iconic | Re-Sale Platform
The Iconic is an online fashion and lifestyle marketplace that recently unveiled a new feature to allow customers to resell their past purchases in partnership with re-sale platform, AirRobe. The new “add past order” feature allows users to rent, resell, or recycle their previous purchases with just one click.
RDG Differentiation Tip – Different consumers have different interpretations of this trend. However RDG research shows that sustainability is a “Hygiene Factor” for interacting with brands – it is no longer a differentiator. Consumers expect sustainability and are looking beyond this for causes that align with theirs. Retailers will need to have a clear stance on what is important within their business.
What Should Retailers Do Next?
Change and innovation will continue to impact all aspects of retail and consumer behaviour in 2030, accelerating the profound implications for many business models of the present. Getting ahead of the curve requires businesses to stay abreast of retail trends that will impact their success.
Retailers will succeed today, tomorrow, in 2030, and beyond if they embrace change and consider the following questions:
- Where will your sector be in 2030 and beyond, what are the trends dictating rapid transformational change?
- Where will your business be positioned and how will you define the roadmap to embrace these changes?
- What could these trends mean for your sector retailing in the future, and where will future revenue streams occur?
- What is the future of brand, channels to market, and the way in which your industry customers will choose you or your competitors?
- What will your future-proof organisation need in key roles?
- What aspects of the model value will adapt and how will they drive future income over the next 5-10 years?
- How can we separate/differentiate from competitors? What is innovation, and what is defendable?
Where to Next?
As a business owner, we know it’s hard to stay informed of trends along with everything else you have going on. Our RDG Strategy Division will give you the answers to grow your business and help you stay ahead of the curve.
Retail Doctor Group will help you with:
- Insights and research findings to adapt and learn from industry and sector trends
- Development of roadmaps detailing how to leverage the insights to strengthen current market position and differentiate from competitors.
- Improved understanding of best-practice business operations with key action steps to achieve improvement
- Increasing the independent understanding of your strengths and weaknesses
- Data to support decision making for the next 12-18 months
- Customer and market information that supports corporate strategy and gives data to execute strategy.
In this everchanging retail world, our future predictions go beyond the trend. Don’t let your business get left behind.
Brian Walker is founder and CEO of Retail Doctor Group, a retail advisory and consultancy group and the Australian elected partner member of the global retail expert’s alliance Ebeltoft Group. As an Internationally renowned retail expert and experienced retail speaker, Brian understands what makes retailers and brands successful. Want to learn more about the future of retail? Contact us on +61 2 9460 2882 or firstname.lastname@example.org.