What does 2016 have in store for the retail industry? Being aware of the most significant global trends — and integrating them into their operations wherever possible — will not only benefit retailers throughout the current year, it will also put them ahead of the competition in terms of their flexibility to address and adapt to innovations that aren’t even on the horizon yet (but that doesn’t mean they won’t be upon the business sooner rather than later).
PYMNTS recently connected with a couple of executives from MasterCard — Max Chion, Executive Vice President of Global Acceptance Products, and Michael Cyr, Executive Vice President of U.S. Market Development — to get both a domestic and worldwide perspective on the current retail landscape. The pair took note of six key trends in the space that MasterCard believes are well worth retailers’ time and effort to familiarize themselves with.
Getting Consumers “In The Moment”
Cyr tells PYMNTS that about half of the consumer respondents to a recent MasterCard survey said that their top frustration related to shopping is retailers not knowing what they want. The solution to this problem will lead to what Cyr describes as “a new era — the personalization of retail.”
Building a personalized retail experience, in MasterCard’s view, will require a focus on the “micro-moments” of consumers’ decision-making processes. Data will be pivotal in this regard, as retailers that effectively leverage insights from loyalty programs, marketing engagement and enhanced analytics will be able to provide “a more curated experience,” says Cyr, that is defined by “highly relevant, personalized product recommendations and promotions. “
Channel The Apple Store Experience
Here’s an anecdote: Sixty-two percent of shoppers do more research online than in the past. And since the average grocery store carries more than 42,000 products, “it’s likely that customers know more than sales people about any one item,” observes Cyr.
To maximize the opportunity of the new paradigm, wherein in-store retail personnel are moving away from being traditional “salespeople” and more towards serving as concierges in place to assist increasingly knowledgeable consumers only as needed, MasterCard advises that retailers utilize more complementary technology — such as beacons — within their physical locations, turning shopping trips into omnichannel experiences.
As Cyr puts it, “Think of it as the Apple Store approach at scale.”
The Socialization Of Shopping
Cyr says that another of MasterCard’s survey findings is that close to 80 percent of consumer purchases are informed by a connected device. Third-party reviews posted online are approaching becoming as influential on shoppers’ decisions as recommendations from their family members and friends.
As a result, MasterCard predicts that, in 2016, the savviest retailers will expand their digital presence through methods such as implementing buy buttons, facilitating P2P product education and describing products in more conversational language — i.e., less marketing jargon — on social commerce platforms.
Convenience Is Retail’s Table Stakes
There are nearly 10 billion connected devices on the IoT today, with that number expected to approach 50 billion by 2020.
“In a world where connectivity is a given,” remarks Chion, “convenience will be table stakes.”
Essential for retailers on that front, posits MasterCard, will be the integration of innovative technologies — such as the company’s own Groceries by MasterCard, a refrigerator-linked shopping app — that work in concert, saving customers time without sacrificing security.
Chion adds that “interconnectivity and seamlessness will be the true differentiators” in this regard.
Digging Deeper With The Chip
With chip-enabled card technology having taken hold in Europe ahead of the United States, Chion notes that shoppers in the former region are now taking advantage of a wider variety of options — including multi-account access and multiple payment and currency options — enabled by chip cards that have become interactive.
Checking In With The Travel Economy
Data analyzed by MasterCard SpendingPulse showed that 2015 was a record year for retail spend on airlines and lodging. A major aspect of consumer vacations, according to the company, is shopping — for brands they know, as well as experiencing the discovery of new ones.
“This is happening within countries but also amplified across borders, particularly for categories like luxury,” says Chion.
MasterCard attests that the increasing connectivity among once-disparate regions of the world is a prime opportunity for retailers.
Taking a holistic view of the six retail trends that they shared with PYMNTS, Cyr and Chion highlight that a unifying factor in all of them is customer experience. Retailers that focus on delivering the best experience possible, the pair concludes, will be the ones most likely to gain sales ahead of their competitors.