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It has been difficult to gain much traction in the retail industry over the past few years. A downturn in the economy coupled with the arrival of the digital marketing age turned the entire industry on its head. Consumers were tight-fisted with their retail spending dollars, and it got even harder to draw in those who were still spending into the individual stores.
What a difference a few years make. The economy seems to be picking up once again, and other consumer trends are having a positive impact on the retail industry. To help sort through all of these changes, here are five retail trends and their implications that marketers should consider.
1. The economy appears to be improving
The latest jobs report1 shows that jobs are increasing and unemployment is decreasing. When combined with data on consumer spending overall and daily spending in particular, this bodes very well not just for the holiday season, but for the entire upcoming year. It also means that retail marketing strategies will need to be developed that can target consumers who might finally have some disposable income. Competition for this share of wallet will be fierce. Consider how you can set your marketing communications apart from competitors. Apply what you know about the consumer's past buying behavior and be as relevant as possible in retail marketing communications.
2. Demographic trends create new retail marketing challenges
Improved targeted marketing will need to take center stage as demographic trends evolve. While aging baby boomers are placing a greater emphasis on youth and vitality, Gen Y may be outspending them by 2017.2 When coupled with a shift to multi-culturalism, these trends highlight the fact that consumers can no longer be targeted as one homogeneous group. Customized communications need to be developed, which speaks to the wants and needs of each individual group. Even if you don’t have demographic characteristics in your database, consider how to develop surrogates based on past purchases to get at actionable insights. Also consider how to adjust digital ad messaging and content based on context and media placement.
3. The industry calls it omnichannel, consumers just see it as the retailer
Retailers now need to be able to communicate with users on multiple channels simultaneously.3 In reality, consumers might not recognize the distinctions between varied channels; for example, consumers might expect to have access to the same product selection in an app versus a mobile site. Marketing strategies need to be developed that will seamlessly communicate to prospective customers online, via their mobile device and in-store. Stores cannot afford to be just “brick and mortar” anymore; they need to be available anywhere and anytime consumers are in the mood to buy.
4. Mobile is on the move
Perhaps this is one of the most important consumer trends affecting retailers. Ninety percent of Americans have a cell phone they often describe as “something they can’t imagine living without.”4 Consumers are using their mobile devices and cell phones to assist in the search and shopping processes, often resulting in in-store purchases. Highly effective mobile websites and mobile couponing can be used to drive traffic to the store. Delivering mobile-optimized emails is now a must. Consumers aren’t tolerant of emails that lack usability. Retailers have to do everything possible to ensure their emails are being received and read. Retailers are aggressively competing for share of mind and share of wallets. Mobile-optimized emails are simply a must in email marketing. One of the trends in email creation is designing for mobile-optimized emails, and then making necessary adjustments for desktop. This philosophy seems to be counterintuitive to previous practices in email marketing. We recently made this adjustment in email creation and were able to double click-through rates.
5. The dollars continue to move online
By 2016, it is estimated that more than half of the dollars spent in U.S. retail will be influenced by the web.5 Commerce is shifting more and more online and will require improved strategies in website development, shopping cart capabilities, email marketing, search engine marketing and content marketing to truly attract, engage and interact with the next generation of consumers. Ensure your retail communications are as data-driven as possible to create optimal relevance.
These retail trends clearly point to the need for a new range of thinking when it comes to developing marketing and communication tactics to engage and motivate today’s consumers. Retailers will need to rely on highly targeted offline and online communication opportunities to build their brands and grow their businesses. J&C conducted our own retail study in 2013, which showed that two out of three consumers surveyed prefer personalized communications versus general information. Contact us to learn more about applying these and other retail trends to marketing strategies that work.
Topics: Retail Industry