It’s time to get on board for a year of changes in the retailing environment

By Dion Wilson,

It is a new year, and its time to make some resolutions concerning business. Now, I had every intention of discussing the problems showrooms faced last year, and still face in the coming year. However, I did not want to start the year off with what is wrong, but rather with what can be done to make it right. So, rather than glass half empty, let's look at things as glass half full. Let's discuss what is changing in the future for retail. 

Retailers are investing more in e-commerce

The biggest focus for many legacy and big-box retailers this year is to continue to invest heavily in their online operations, even if it has come at a cost for many in recent quarters. But, boosting their own e-commerce capabilities isn’t enough for some retailers. Online marketplaces — where retailers can sell their wares through third-party sites like Amazon and Alibaba — continue to grow, as many retailers use them to reach a wider audience. According to NRF's "State of Retailing Online 2015" survey, 32 percent of retailers plan to spend more on online marketplaces than last year. 

Although the idea of selling through a competitor sounds self-annihilating, the reach it offers is hard for many retailers to overlook. According to Forrester, more shoppers started their shopping journeys by researching purchases on Amazon in the third quarter of 2014 than researching on search engines.

Omni-channel is not an option for retailers anymore

It is just business. Omni-channel is the retail buzzword du jour — and for good reason. As retailers continue to invest in mobile and e-commerce ventures, the ability for consumers to seamlessly shop from one channel to the next while retailers account for inventory is a challenge that all retailers are grappling with — and one that few have fully mastered yet.

An online presence is the now bare minimum for many retailers, and omn-ichannel capabilities are becoming increasingly necessary Deloitte's "Navigating the Digital Divide" report stated that 64 percent of transactions in stores are influence by digital, with many parts of the shopping journey taking place even before the customer steps into the brick-and-mortar location. 

“In a world where nearly everyone is always online, there is no offline,” Deloitte’s report read. “So, it is not about the digital business, it is just business. It’s not about e-commerce, it is simply commerce.”

Brick-and-mortar is becoming more of an experience 

The millennial generation's predicted annual spending will reach $1.4 trillion in 2020, according to Accenture. Looking to attract the millennial generation, retailers are taking advantage of their flexible brand loyalty and penchant to spend more on experiences rather than things. Reatailers are enticing them with increasingly unique formats and interactive opportunities when shopping in their stores.

Driven by millennial preferences and the need for a distinct advantage over online retailers, such as Amazon, retailers are turning their stores into destinations for discovery. Apple’s open-concept showrooms are the one of the best examples of this type of retailing. But, experiential formats are now becoming more mainstream as traditional retailers rethink the role of physical stores. Retailers like Macy’s and Target are testing alternative merchandising displays and building navigation mobile apps for shoppers to use in-store to find inventory and alert them of sales.

The trend is even coming full circle as pure online retailers eye the benefits of physical stores. Bonobos, Warby Parker, and Birchbox have all opened and continue to expand their brick-and-mortar showrooms and stores in the U.S.

Retailers fighting discounting with focus on merchandise

Retailers have always been keenly attuned to their customers' needs. As the economy improves, consumers are holding onto their desires for discounts and sales, forcing many retailers to compete on factors other than price, including merchandising and product quality. American Eagle has been seeing some success with this approach, with sales up in the most recent quarter thanks in part to a greater focus on the quality of its jeans, despite a move away from heavy discounting. 

Abercrombie, another teen retailer fighting its way back from several dismal quarters, is focusing on the value of its signature brand, doing away with logos, and shifting to a more "timeless" look to appeal to older audiences who might be willing to spend more. Moving forward, expect retailers to place a greater focus on the quality of their products and perhaps, like American Eagle did recently,  even reduce inventory to do away with clearance markdowns.

Mobile use is growing among consumers  

Mobile phones are quickly becoming ingrained in consumers' everyday life: 64 percent of American adults today own a smartphone, according to Pew Research, up from 35 percent in 2011. And, 52 percent of smartphone owners in the U.S. report checking their phones a few times an hour or more, according to a Gallup poll. 

Retailers are beginning to see consumers using these devices in every step of their shopping journey, from finding inspiration from their favorite fashion blogger to a mobile checkout in-store. In 2013, retailer ModCloth found that 60 percent of its Thanksgiving sales came from mobile. E-commerce giant Amazon has more mobile-only users than Facebook. 

More to the point for brick-and-mortar, 75 percent of store shoppers are using their mobile device in stores, according to InReality. These shoppers are checking for deals from the retailer (or its competitor), consulting with friends via text when trying on wares, and updating their social media accounts while waiting in line. Retailers have and will continue to make mobile shopping — both in-store and out — a priority by investing in mobile apps and beacons for in-store use, in-app shopping capabilities, mobile payments in stores and mobile advertisements. 
So as you can see, it's a new year with many new changes. Can you use this information to your advantage and make it to work with your business? I hope you said, "yes." I have said before, companies spend millions on discovering all this information, make it work for you! 

Dion Wilson is manager of Waterhouse Bath & Kitchen Studio, and an interior designer who has worked in the Kitchen & Bath industry for two decades. Under his direction, Waterhouse has garnered national attention. He is considered one of the industry’s leading social media experts. Dion can be reached at 419-874-3519,; or Find him on Facebook at or on Twitter @dion1701.

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