With 2021 in full swing, we can begin to look at how much the retail landscape has changed over the last decade. The financial crisis of 2008 kicked off an era of frugality that has affected every aspect of retail. From the bargain hunters to the daily closures of brick and mortar stores, many have coined this as the “retail apocalypse.” Large online stores like Amazon and discount stores across the US continue to drive deep discounts through Prime 2-day shipping programs.
Coupled with a changing, ever more tech-savvy consumer base who expect convenience and interchangeable service between in-store and online shopping, the omnichannel experience has become more in demand than ever. It’s an especially popular DTC CPG ecommerce strategy and will continue to become an important ecommerce trend in the future.
The only thing that we know from this shift in consumers is that traditional models no longer work. Supply chains are too slow, options aren’t diverse enough, and the GenZ consumers are focused as much on sustainability as they are style. This last decade may have seen the demise of malls as anchor stores like Sears, Kmart, Barneys, and Walgreens all announced massive store closures and bankruptcies. However, it would seem that those that have survived thus far are beginning to understand the new retail environment.
Many retail businesses must shift and accelerate their ecommerce operations. Although traditional marketing strategies are still relevant, retailers must develop an optimal ecommerce marketing funnel to drive customers to their online storefronts. They must invest in an exceptional ecommerce business platform and carefully access their marketing analytics to monitor their process and track crucial ecommerce KPIs.
It’s also essential retailers invest in the latest innovations in online commerce to ensure they deliver a superior customer experience to their visitors. More than half of consumers use their smartphones to shop online, so implementing a mobile responsive design is paramount to convert mobile users. Businesses must also utilize a user experience strategy so their customers can explore their online with ease. Companies can elevate their storefront using a headless ecommerce platform or EDI software integration to provide a customizable and efficient operation.
There is so much to think about when it comes to managing an ecommerce business, but fortunately, Nogin offers a revolutionary approach to ecommerce. A Nogin partnership allows brands to focus on growing their business while we handle all the technical aspects of running an ecommerce business, including development, platforming, marketing, and fulfillment.
Brands can’t compete with big retailers like Amazon and Walmart alone. Independent retailers must offer excessive discounting, and their operating costs are too expensive to run a profitable online business. Nogin helps significantly cut internal operating costs, such as free shipping, marketing, fulfillment, and returns while leveraging continuous research and development to employ the best strategies to convert customers.
Our proprietary ecommerce software and enterprise ecommerce solutions allow businesses to become more profitable, lower costs, and scale their business. We are the ultimate (and only) outsource ecommerce provider, and we’ve helped huge online retailers, including Honeywell, Frye, and Hurley, scale their online retail operations. Get in touch with us to see if you qualify for a FREE site audit and consultation to learn how we can help you leverage intelligent commerce that delivers exponential results.
The Future of Retail: 4 Predictions to Prepare For
Here are 4 key points of view on what the retail industry should expect.
1. Privacy Regulation Will Reshape Personalization
Coming on the heels of several high-profile data breaches in 2018, in which 20 or so major retailers’ consumer data was hacked and had personal information stolen, many states are working to enact sweeping consumer privacy legislation.
Leading the charge, the much-touted California Consumer Privacy Act of 2018 (CCPA) has just been put into effect as of January 1st, 2020. Similar to GDPR, it mandates that companies secure consent from their consumer base to collect and use their data.
This recent piece in Fortune explains its impact on retail pretty clearly: “The [CCPA], could play havoc with the online economy since so many companies—from tech giants to ordinary retailers—rely on targeted ads. “…while most consumers in the United States would welcome personal data protection rights similar to GDPR, the research found that on average, 71% of consumers express some level of frustration when their experience is impersonal.”
Many retailers are stuck in the middle, unprepared for this drastic data collection change. Major retailers like Walmart, Kroger, and Target are exploring if, like Amazon, they too could utilize their customer data to build an advertising business to increase cart value and use ads to mitigate revenue losses without relying on third-party systems. The bottom line is to make sure you have a good technology partner or risk opening pandora’s box of privacy litigation.
2. Online Shopping Will Accelerate Even More
Surprisingly enough, ecommerce growth spurs in-store retail. A long-standing fear has been that online-only brands would poach in-store sales. However, studies have shown that more than 55% of shoppers still prefer to shop in-store than online, up from 47% just a year ago. A key factor in this shift seems to be convenience.
Many consumers claim that allowing them to buy items online while still picking them up in-store is often faster and easier than waiting for an Amazon delivery. As more brick-and-mortar stores adopt this omnichannel marketplace, enabling consumers to buy online and pick up in-store or enjoy curbside pickup, these ecommerce sales extensions will fuel growth in physical stores.
According to Statista, global ecommerce sales are expected to top $4.8T by 2021, with the latest ecommerce growth forecast suggesting that ecommerce sales in the US alone are projected to be around $600B by 2024. As brands start to realize this partnership between their online efforts and their physical footprints, it will look less and less like online retail is cannibalizing in-store sales and more like a symbiotic relationship.
3. Sustainability is no longer just a marketing buzzword
No longer is sustainability just a nice-to-have addition targeting conscientious shoppers. No longer is sustainability just a nice-to-have addition targeting conscientious shoppers. Generation Z shoppers have fast become the target audience for brands and retailers, and according to eMarketer, 68% of Gen-Z shoppers are increasingly considering sustainability when making purchases.
To meet these consumer’s expectations, retailers and brands are forced to focus on more sustainable business practices. The key will be tapping into highly tailored customer profile technologies to anticipate consumer demand from waste reduction to eliminating physical samples. AI machine learning personas will help to address this more consumer-conscious market.
4. Gen Z’s are now IN
Speaking of Gen-Z, they have officially replaced the millennial as the most sought-after demographic. Colossal changes in retail happened over the last decade of the millennial generation. As millennials flock to ecommerce sites and fast-fashion brands like H&M and Zara, department stores such as Macy’s and Sears have suffered, closing hundreds of stores across the US. Part of the reason is when millennials do spend money. They are spending more on experiences like restaurants and traveling.
Millennials were less drawn to aspirational, designer brands, and they are perfectly happy saving money by buying private-label lines, which further hurts traditional department stores. The fall-out has been swift as Millennials are being blamed for the bankruptcies of staple brick and mortar stores like Toys-R-Us.
As marketers look forward to this new decade, opportunities will be abundant for retailers and brands to meet these omnichannel needs of the new consumer. Amidst economic uncertainty, those brands that can meet their consumers on their own terms with sustainability and convenience will have the greatest opportunity to capture market share while minimizing costs. With the right data platforms and AI integrations, retail is still looking up. Here’s to the next decade!
Future of Beauty, Fashion, and the Clothing Retail Industry: How to Stay Ahead of the Competition
The fashion and beauty industry is booming online. Brands in the luxury ecommerce space continue to successfully leverage celebrity collaborations to attract new users online. Many smaller brands can also quickly get started using ecommerce dropping or 3PL ecommerce fulfillment to start selling products without a huge upfront investment.
The best plan is to focus on your catalog and product page optimization to increase your chances of converting visitors. The latest iOS update has made it tougher to track rich data that informs businesses of ideal candidates to target. It’s imperative to review the right techniques to make online sales. Check out our thorough and informative guides to help stay ahead of the competition:
- Ecommerce Product Listing Strategies
- Retail Pricing Strategies
- Retail Markdown Strategies
- Customer Retention Strategies
In the Age of Amazon, There is Only One Way to Compete
There is only one way to compete with big-box stores and online titans like Amazon: Nogin. Our team of Nogin geniuses will manage your ecommerce operations, and when you migrate to our proprietary platform, you’ll NEVER have to replatform again. Brands are drained of their resources trying to manage fulfillment, marketing, development, and all the endless ecommerce factors needed to run a successful online store.
Nogin will liberate you from the nerdy tech stuff while maximizing your store regardless of the latest shifts in the industry. Get in touch with us and learn how we can help you!