2015 has arrived and with it, the future of retail. FierceRetail spoke with industry experts to learn about the major trends on retailers' to-do lists as they navigate through the rapidly changing, technology-driven retail world.
First, e-commerce—led by mobile—will make leaps and bounds in its percentage of retail market share in 2015. As the technology on mobile phones improves and more retailers outfit their stores' sites and payment platforms for mobile, the consumers will follow.
Secondly, product delivery will stand at the top of most retailers' priority lists. As more and more retailers begin to offer one-hour delivery, order online/pick-up in-store and ship to store delivery options, brands will have to adapt by improving inventory information and changing the role of the traditional, physical store.
The use of in-store technology will continue to rapidly change the retail landscape this year, from creating personalized offers using store-based beacons, to outfitting store employees with tablets for product information and checkout abilities.
And finally, concierge services for all customers will become the new norm as retailers find ways to tailor offers and push sales based upon previous purchases of loyal consumers.
E-commerce still in growth mode
Customers will raise the bar for website content in 2015. "As online and mobile shopping continue to gain market share, consumers will begin to demand higher quality content, and whether or not retailers can deliver will ultimately determine their financial success," said Rory Dennis, CMO of Amplience.
Dennis predicts that shoppable videos will grow in popularity online, particularly for fashion brands. He also expects a heavy investment in creating interactive digital experiences for consumers.
In addition, he believes that online personalization will be key in 2015. "Those who are able to deliver a personalized, interactive experience online will develop a strong group of loyal customers committed to supporting the brand," said Dennis. "Those who cannot deliver this level of experience will miss out on market share and struggle to compete."
The online space will continue to be an important channel for consumer conversation. Brand websites, social media spaces and even venues such as YouTube will serve as platforms for customer-generated content that some retailers will more actively use as a marketing tool to develop and support brand identity. As already witnessed in 2014, social media has not only become a place for brand discussions, it can even serve as a platform for transactions as more and more social media outlets add "buy buttons" as an option in their feeds.
The launch of Twitter's long awaited "buy button" opens up new opportunities for retailers in 2015.
Apu Gupta, CEO of Curalate, said that retailers will need to make things like product pricing, availability, reviews and user generated content available on all channels, wherever requested. In other words, travel with the product wherever it lives, even if the channel is not owned by the retailer.
"Doing this is going to require retailers to make their e-commerce systems 'social ready,' making site information easily consumed by third parties to ensure a consistency of information across channels not directly owned by the retailer," said Gupta. "Ultimately, this is about acknowledging that for 'social commerce' to ever become a reality, the lines between social and e-commerce have to continue to blur—philosophically, strategically and technically."
No matter where they occur, the shift of consumers to online, digital purchases, will most certainly continue to rise, especially in certain sectors of retail such as electronics, apparel and sporting goods, according to Ron Klein, director of U.S. retail and consumer, PwC. And even newcomers to the online sector, such as groceries and furniture, will continue to be popular online purchases.
Mobile leaps ahead
In 2015, the role of mobile in retail will continue to grow. While mobile has already proved its worth for product research, the amount of actual transactions completed on mobile will also rise in 2015. Retailers who want to keep and grow market share will need to invest in this space in order to compete.
"Retail is going mobile," said Kenshoo CMO Aaron Goldman. "Heck, it's already gone mobile. By now, every retailer has a mobile strategy but what separates the wheat from the chaff is the ability to connect data across devices to make for a truly seamless customer experience." Mobile will continue to soar with the help of Apple Pay, which will make transactions easier, Goldman added.
Adam Marchick, CEO, Kahuna, agrees that the rise of mobile is like a tidal wave as consumers rapidly become more comfortable with the space. And even though more items are currently being purchased on tablets then on phones, Marchick said that gap will become smaller and smaller.
"More screen size, leads to more display, leads to more comfort, leads to higher purchase," he said. Even phone screens are becoming bigger and the technology will catch up to make it easier to purchase by phone. While he said the rate of shopping cart abandonment on mobile is currently high, as much as 90 percent, that will quickly change.
Marchick's company just launched RevIQ, which helps retailers increase shopping cart fulfillment. How does RevIQ work? If a customer adds an item to a cart and decides not to purchase, the customer later gets a message asking if he or she wants to complete the purchase. Marchick said this lifts the rate of transaction between 30 and 60 percent. "Personalized relevance and timely reminders work," he said.
Mobile is a start, but making sure retailers provide a personalized experience across all devices will be key.
In an omnichannel world, it's about sending a personalized message to the right person on the right device. And according to Marchick, device preference absolutely matters. He said that retailers who want to get ahead in 2015 need to invest in mobile. A great mobile app experience will reap rewards. "For a lot of retailers, mobile is still a checkbox," said Marchick, as it is somewhere between 1 to 2 percent of all purchases. "However, it's innovating at a much faster rate than brick and mortar."
Marchick acknowledges that mobile makeovers can be costly, but there are "light weight" ways for brick-and-mortar stores to get involved in mobile.
Consumers are already expecting fast-loading mobile sites to have easy-to-use checkouts. That will only increase in 2015.
"More e-commerce sites are going to be using flat design so their websites are seamless from one device to the next. Alternative payments like Bitpay, Apple Pay and other mobile payment platforms will gain huge popularity because of their ease of use. Plus, mobile advertising will gain market share as more people shop on their devices," said Ben Skigen, VP of e-commerce and marketing, Tonzof.
But will retailers be able to keep up?
"Retailers are starting to tinker with technology, like geofencing and beacons, that recognize the consumer when they are near or walk into the store," said Elana Anderson, senior VP worldwide marketing, Demandware. "But this acceleration of consumer adoption and technology advancement only means that retailers must accelerate their learning and ensure their mobile strategy keeps up with the pace of customer expectations. Retailers that fail to pay attention risk being left behind."
"Stores will invest in digital marketing strategy devices such as beacons to help them come up with new ways to target promotions to increase probabilities into shoppers," said Klein. When it comes to mobile, he acknowledges that the United States has some catching up to do as a point of payment processing. But new payment methods such as electronic wallets make it easier and easier to steal share from the traditional systems. All of this processing and info sharing will require a big investment from retailers, leaving different retailers adapting at different speeds.
Whether it's one-hour delivery or fulfillment for pick-up at a local store the same-day, delivery speeds are getting faster. Amazon set a new bar when it launched one-hour delivery in Manhattan last month. "Same-day delivery is the new black of retail trends," said Scott Fenwick, senior director, Manhattan Associates. He expects that the topic will be a hot one throughout 2015 as more and more retailers experiment with it.
"Trials will be focused in geographically small, primarily urban areas to begin with, for logistics reasons. But as experimentation continues and same-day shipping becomes more ubiquitous, the stigma associated with its expense and operational complexity will start to fade and more consumers will start to view it as a realistic option in a new list of attractive delivery approaches," said Fenwick.
Consumers are demanding to have everything sent to their door, and if retailers aren't ready to deliver they'll pay the price.
Convenience is the name of the game and retailers will need to keep pace. "Retailers rushed to invest in order fulfillment and distribution solutions this year  to enable a global view of inventory and find ways to make that inventory available to all of their customers, regardless of where or how they shop. And going forward, retailers will unveil more options to consumers to make shopping as convenient as possible and never lose a sale," added Anderson.
If retailers need to fill orders more quickly, store locations will start to serve as mini-distribution centers. Retailers will be able to test new formats and functions, such as the pick-up point acting as a showroom model as opposed to a shopping destination.
In 2015, infusing technology into the physical store will be paramount for retailers. There is still much room to grow in the way of technology, which is a costly piece of the retail puzzle, not to mention there are differences of opinion on useful it will be and what to spend money on. But the increasing use of Bluetooth and beacons will continue as retailers look for more location analytics and ways to personalize offers.
Breton Birkhofer, client success manager, Euclid, warns retailers there are still some details to flesh out with the use of iBeacons: managing them, using them, the expense and in-store maintenance. And of course, for these tracking and personalization systems to even work, shoppers need to download the retailer's app.
So while online purchases begin to rise, in-store transactions will remain the breadwinners for many retailers. Getting bodies in-store always translates to opportunities to upsell and for impulse buying. Therefore, investing in brick-and-mortar for technology will be paramount.
"To truly capitalize on the promise of all channels in the coming years, we will see increased investment in technology that encourages customers to visit stores and helps associates provide selling experiences tailored to individual customers. Clienteling solutions, for example, will enable store associates to better understand their customers' shopping patterns, likes and dislikes," said Fenwick.
The idea in 2015 will be to move closer to that seamless shopping experience. In time, RFID technology will enable checkout to be as seamless as possible. In the near future, a shopper will be able to pick up an item and pay for it automatically on their mobile device as they walk out of the store. "It probably won't come on in mass in 2015," said Klein, "but this is what retailers are striving to achieve."
Investing in the experience
For many consumers shopping is now about the experience, not just running to the mall to pick up the latest apparel. Therefore, retailers this year will focus on tailoring customer service to create a unique and exciting in-store experience. This means installing innovative solutions such as interactive displays or high-tech fitting rooms. "More of a Bonobos approach" Birkhofer cited as an example.
While data at Euclid shows that traffic at malls will continue to decline in 2015, those shoppers that do visit the mall will be more engaged through technology. Eventually, most shoppers will be checking out of a store using a seamless POS system such as Apple Pay.
"In store engagement will be a huge component to expect as the role of the store changes in this omnichannel world," said Birkhofer. A shopping experience could mean starting online, heading to a store to test a product, and then finishing the purchase online. "From our perspective, online is still growing rapidly and mobile will begin to pick up as well, but physical retail is still a vast majority," he added.
Traditional in-store experiences like malls will still be important in 2015.
Finally, Klein believes more retailers will invest in clienteling in 2015. Concierge-like services will peak interest, such as tools that help sales associates know customers' shopping histories and automated personalization so that a computer can generate smart suggestions.
More brands will continue to focus on personalization and storytelling in their digital strategies, according to Skigen. "Google has already proven that spammy marketing tactics will only get you so far and for so long, so it's imperative for brands to add value beyond the transaction with engaging copy, content and design," he added.
So what will make a retailer stand out this year? "Product, product, product and customer, customer, customer," said Klein. "Exclusive products and services make a retailer the stand-alone destination for that product and service," he said.
And what retailers will top the charts in 2015?
Skigen predicts Amazon and Walmart will stay at the top of the list with their enormous supply chains and reach. "Though we're excited to see what Alibaba and Wayfair have planned for 2015 after going public earlier this year. We believe that companies that can leverage technology to streamline logistics and mine data to produce specialized, targeted advertising will be the big winners next year."