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Lifting the lid on retail trends

A raft of developments are emerging to meet changing consumer expectations. RICHARD SHAPIRO provides insight on the top trends to impact retailers in 2017.

Last year was an exciting one for the retail industry. A parade of innovative options, widgets and new businesses wowed consumers and continued to drive a sea change in their preferences and expectations. Online and bricks-and-mortar retailers alike found themselves scrambling to stay relevant and competitive. Retailers can expect more of the same in 2017 as shifting consumer attitudes force them to rethink and possibly reinvent their channels, product mixes and service strategies.

The New Year promises to be a winner for retailers and consumers alike. Looking ahead, here are some of the trends expected to feature.

The rise of the review

When Amazon began encouraging its customers back in 1995 to post reviews of the products they were purchasing, the initial reaction was that the online retailer had lost its marbles. Some critics considered it a recipe for retail suicide. Fast-forward 20 years and reviews are now a fixture of retail that consumers trust and rely upon more than ever.

Who doesn’t scour reviews to find the ‘perfect’ hotel or vacuum cleaner? Consumers have become review junkies, studying product comments and relying on the customer community to answer their toughest questions.

In 2017, businesses will be evaluating comments from their customers and their competitor’s customers more diligently, using ad hoc reviews strategically and responding to those who comment in a more systematic fashion.

Bricks-and-mortar is still relevant

Bricks-and-mortar will experience continued stagnation in 2017 because of the onslaught of online shopping; however, this stagnation comes with a caveat as the good news for many terrestrial retail categories, particularly jewellery, is that the basic human need to see, touch, feel and try items before purchasing is an enduring one that will keep traditional retailers alive.

Online searches for locations nearest to shoppers are on the upswing, indicating that consumers still want ‘hands on’ before they buy. Further proof of the power of bricks-and-mortar is the fact that Amazon has announced plans to expand its physical footprint by opening stores in Australia.

More brand-only stores

Brands will continue to open company-owned boutiques. This concept holds undeniable appeal for any brand wanting to tell and control its own story, sales, inventory and service ethos in a way that many department stores are simply unprepared to do.

This doesn’t mean brands will cease selling product via independent retailers but it does mean they will be more selective and allow only those retailers who provide exceptional customer service to carry their inventory.

Sensory customer experiences

The customer experience is all encompassing. Stores today aren’t just about the products and services they offer. Look, feel and aroma are all key brand markers important to the experience now. Brands are creating proprietary scents not only for use in stores but also for use in the packaging of online purchases – consumers will recognise the brand before they even open the box! Lighting, colour, scent, texture, sound and taste will all become an integral part of the competitive differentiator.

Amazon’s Phase 2 – shopping with Alexa

Amazon continues to take centre stage and it’s not only due to great customer service, competitive pricing, an unbeatable product mix, reliable user reviews, strong support and the gold standard Prime membership program offering member discounts, same-day delivery and entertainment options.

Now, Amazon’s ‘Just Ask’ feature on virtual assistant Echo (Alexa) has essentially made shopping effortless. Alexa offers daily promotions and special deals, supported by a device in Echo that knows the customer’s buying history, delivery address and payment preferences. The reverberations of this winning combination will be felt by every retailer; it’s a game changer forcing other businesses to work even harder to make their shopping experience easy.

Geo-fencing, geo-targeting, geo-conquesting

Location and proximity-based messaging with store beacons is fast becoming a predominant tool that bricks-and-mortar retailers use to communicate with nearby and in-store customers. It’s still early days for this technology yet it already takes many forms – US clothing and accessories retailer American Eagle Outfitters sends targeted offers to any shopper with the store’s app installed just as that shopper pulls into the car park; meat production company Oscar Mayer uses deli counter beacons to geo-target customers, highlighting menu specials including its products. Geo-conquesting, meanwhile, allows businesses to send customers messages when they are about to visit a competitor.

Luxury watch brand Audemars Piquet is another example of retailers using beacon technology – when a customer picks up a watch in-store, a screen providing information about that model’s price and technical specifications automatically opens on a nearby smart device. Beacon technology is poised to outgrow its current, relatively-limited geographic range in 2017 as an array of new applications emerge.

Virtual shopping

Retailers will enhance and personalise the in-store shopping experience through the use of holograms and virtual reality displays. One such application lets customers ‘try on’ an outfit without ever changing clothes, while others create entire virtual environments.

Retailers will be particularly drawn to the technology as they discover how relatively little physical space is required to create dynamic 3D experiences. Outdoor sports retailer The North Face has fashioned a display that places the customer in the middle of Yosemite National Park, while US hardware giant Lowe’s uses Microsoft’s HoloLens technology to let any homeowner design their virtual dream kitchen with every imaginable appliance.

Shopping centres in transition

The traditional shopping centre is passé. Today’s consumer wants everything conveniently located in one place. Thus the shopping centre is being redefined as a multi-purpose space that showcases not only traditional staples such as clothing, fashion accessories, home goods and food but also neighbourhood-style shops and services.

In these new shopping centres, consumers will find everything they need, including doctor’s offices, schools, libraries, hair salons, grocery stores, real estate and business offices, restaurants, movie theatres and, yes, residential apartments. The idea is once people enter, they’ll never have to leave. Look at Hudson Yards in Manhattan and similar projects in Australia like Arden Gardens in Melbourne and Northshore Hamilton in Brisbane as the new standard.

Instant gratification

Consumers feel busier than ever before and they appreciate instant gratification. This, coupled with the staggering popularity of mobile and online shopping, have given rise to an army of consumers who purchase on their devices then drive to nearby outlets to retrieve their bounty. Savvy computer hardware and software business Newegg now offers a free ‘will-call’ service option that provides local customers the convenience of pick up from the Newegg Hybrid Centre in place of shipping. Bricks-and-mortar retailers that make the pick-up process an effortless and positive experience for online buyers are sure to generate repeat business. Naturally, this won’t work with all jewellery purchases but may be an option for branded jewellery products that customers are comfortable purchasing online.

GPS delivery tracking

Today’s consumers expect companies to have technology in place to pinpoint deliveries. Some businesses do fulfil this request but others have yet to make the necessary investment. If shoppers want to know if that pizza they ordered is still in the oven or almost at the door, Domino’s has the solution. Similar to Uber’s technology, the company’s ‘pizza tracker’ uses GPS to let customers know exactly where the driver is on the route. No matter what the good or service is, telling customers their purchases are “on the way” is no longer adequate.

The packaging revolution

Everyone loves receiving parcels and this feeling is being upgraded through enhanced package design. Packaging is an integral part of the customer experience, significant for both the brand and the retailer. It is another piece of the differentiator puzzle and supports a business’ unique signature. Can anyone imagine receiving an Apple product in a large box filled with styrofoam peanuts or bubble wrap?

Subscription services

Companies such as Harry’s and Dollar Shave Club have become fierce competitors to Gillette, a division of Procter and Gamble – shavers, razor blades and shaving creams arrive automatically and are specifically tailored to a consumer’s individual preferences.

This is built-in repeat business and what more could any retailer ask? In addition to consistently selecting and sending only the right stuff, astute subscription services such as Trunk Club, Birchbox and Loot Crate utilise innovative, distinctive packaging that enhances the customer experience. It’s happening in the jewellery sector too. Businesses such as Myntbox, Bezel Box and Rocksbox are offering jewellery on a subscription service basis.

Peer-to-peer e-commerce

Social networks have for some time permitted and occasionally even helped users sell to one another but with the official entry of Facebook Marketplace – the social media giant’s version of peer-to-peer e-commerce allowing users to buy and sell items within their personal networks – retailers owe it to themselves to take notice and watch what happens next.

Renting versus owning

The notion of a sustainable economy is often in the news and one result is an increasing appreciation of the economics of sharing, especially among the youth. How often is a suitcase used? What about a leaf blower? Does every home on the block really need one? Rent the Runway has revolutionised the way women are ‘purchasing’ evening gowns and accessories, while subscription service Rocksbox uses a ‘loan’ model. This trend is neither new nor a trifling one in some European nations so don’t be surprised as it takes hold in other regions.

Membership/loyalty programs

No doubt inspired by the success of Amazon Prime, most major retailers are experimenting with membership programs. Bed Bath and Beyond is looking to eliminate its coveted “20 per cent off a single item” coupon that customers receive in the mail, online or clip from a magazine. The business has initiated an invitation-only, fee-based membership loyalty program that offers 20 per cent off the entire purchase any time a member customer shops in one of its stores or online. Free shipping is included, of course. Given that membership fees have historically helped improve business margins, it’s a win-win combination, especially for those consumers who are already loyal shoppers.

Smart garments

Wearable technology was a significant trend last year and there have been more major advancements – fashion designers are working to create gowns that use technology to glow in the dark and produce other special effects, for example.

With the advent of IBM’s Watson technology, apparel manufacturers are making garments that think – fabrics that get lighter or heavier as the temperature changes from day to night; Nike just released self-lacing sneakers.

While this trend is more to do with apparel, it’s possible that jewellery pieces might start including technology similar to those in smart watches. This is only the tip of the iceberg where wearables are concerned and the sector will develop in years to come.

Trends come and go but an overwhelming number of consumers now describe customer service as “very important” when selecting a business. According to the 2016 Microsoft State of Global Customer Service report, 55 per cent of customers have higher expectations for service today than they did a year ago. With transactions ‘de-humanised’ through innovation, the human element is even more central. Embrace the noteworthy 2017 trends, run with the changes and remember that any channel can employ the human connection.

Think human-connect first then work backwards to add the technology features that customers are most likely to use, love and tell their friends about.


For more 2017 retail trend insights, click here.

Richard Shapiro

Contributor • The Center for Client Retention

Richard Shapiro is founder of The Center For Client Retention, offering research, training and consulting services, and author of The Endangered Customer: Eight Steps to Guarantee Repeat Business. Learn More:


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