Today’s face of retail is changing. New people behaviors and technologies are causing new business models, strategies and tactics to change beyond the traditional retail mall. Below is a list of trends I’m watching, experimenting, and adopting. As we head into the holidays, and help retailers earn their major revenue share, here’s some future trends to be tracking.
Ten Trends For The Progressive Retailer
- People desire purpose beyond profits. The 2008 recession has left a bad taste in everyone’s mouth. Powered by social media, people organized their mistrust. Today’s youth generation expects corporations to serve a greater purpose than just generating raw profits, reports this Deloitte study. New trade councils have emerged, such as Sustainable Apparel Coalition, Sustainable Brands, and B-Corporation ratings to promote brands that uphold the Triple Bottom Line of society, sustainability, and stakeholders.
- Sharing emerges as business model over consumption. The hot movements on the media’s lips are Airbnb, Lyft, and Uber, but how do they impact the regular retailer? We’re seeing thousands of services emerge that enable people to borrow, rent, gift, and get goods from their peers rather than buy them anew. Pleygo (I’m a member) enables me to get toys on a rental model, all delivered to my door. Furthermore, the gift economy, like Yerdle, threatens retailers as people give products, avoiding commerce altogether. H&M and Marks and Spencer also offer swapping used goods for in store coupon “Swhopping,” yielding loyalty and social good.
- Local neighborhood commerce enables new opportunities. Beyond popup stores, expect new business models to emerge where physical goods are ‘forward deployed’ (term originated by Andy Ruben) in neighborhoods, enabling products to be obtained on demand. Lockitron offers to make anything a secured location, accessed only by a mobile app, and, perhaps, with mobile pre-payment delivery.
- On-demand delivery sends products direct to home. Two models are emerging: Local delivery models like Postmates, Instacart, and Google Shopping Express enable local merchants to compete with Amazon by tapping delivery networks to get products to homes within hours. Also, the Subscription Economy, coined by Zuora, emerges as goods are sent to homes on a regular basis by such as TrunkClub, Dollar Shave Club, Beauty Box, and Citrus Lane. In those models, there is no longer a need for people to visit a retail location.
- Now, 3D printing offers customized products, and impacts supply chains. While in existence for over 24 years from companies like Stratasys, 3D printing is increasing in popularity along with online services like Shapeways and 3D scanning of your body. Expect retailers to experiment with these new technologies as Victoria Secret did when they hosted their latest fashion show, and with Appalatch offering 3D-printed wool sweaters perfected for your body type. See how the innovation of 3D printing can impact your business model.
- Marketplace models extend brand beyond core value proposition. Staples Marketplace, Patagonia Common Threads, and now TOM’s shoes have marketplaces that offer used goods, or goods made by other artisans or makers. This trend secures a brand in other categories beyond their core value proposition, producing a network effect. TOM’s marketplace indicates that their effort is beyond raw profits, extending to the social good of makers that are around them.
- New forms of data improve customer and brand relationship. While we’re all familiar with the internet of things, sensors, RFID, and other age-of-context data types, what matters is how they are used. Over the last 10 years, customers have been empowered to rate products and companies, but now, we’re seeing companies rate their customers, encouraging good behavior in exchange for good service.
- Alternative currency spurs new transaction opportunities. Reputation points, Klout perks, and more have been in constant discussion as marketers have attempted to quantify influence and behavior. But new decentralized currency platforms like Bitcoin have emerged, leaving regulators confused, and a handful of retailers, such as this online games and gift card retailer, adopting it. Bellwether Virgin Galactic announces they’ll be accepting Bitcoin for their $500k flights, a great coup for Bitminers the Winklevoss twins.
- Crowd funding offers the highest form of loyalty and, shared destiny. Big brands don’t need to crowd fund, but they do it for a few reasons: to identify product demand, to allow prepayment, and to harness the highest form of loyalty, shared destiny. Expect more companies to tap crowd funding as it’s caught the attention of federal regulators in recent hearings. See how Betabrand taps the crowd for commitment, and U-Haul launches the Investors Club.
- Crowd-created products tap endless innovation. The Maker Movement enables people to produce their own goods, and offer those goods to their community in online marketplaces or physical world events. Savvy brands like Nordstrom/Etsy, Ford/CustomMade, GE/Quirky are partnering with artisans and creators to develop unique, new goods. Companies that tap their own market to design, create, and manufacture products around their own brand are more connected, empowering others, and ultimately becoming more resilient.
Summary: Using powerful technologies, the people are becoming empowered to get what they need. They’re exhibiting new behaviors beyond traditional consumption, including funding, designing, and creating, which align to their goals, not those of Wall Street. This crowd-like company is a powerful force that savvy retailers can tap into to become more connected and innovative. Companies that tap these new trends will undergo significant business model change, but will then integrate the crowd into their business model, making companies resilient.
Thanks to digital business executive, Ethan Holland who provided some of these relevant links, and also cleverly coined the phrase “Mechanical Clerk” in relation to Trunk Club’s remote personal stylists.