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Retail Predictions for 2017

The past year has been filled with major events in eCommerce that are sure to shape its future, from the first delivery by drone to Walmart’s acquisition of As 2016 has come to an end, it’s now time to look ahead at 2017. Here are our top six retail predictions for the coming year.

1. Consumers Will Want Everything Faster

Emphasis on saving time when shopping: Thanks to services like Grubhub, Instacart, and Amazon, buying groceries, food, and other household products is as easy as clicking a button. Everything can be delivered straight to your door, without ever having to step foot in a store. In 2017, expect an increase in other services offering a variety of products in this manner to become more prominent.

Instant gratification: Amazon made two-day shipping the standard for shipping speed. Customers have become accustomed to speedy shipping and will soon start to expect one-day or even same-day shipping. According to Deloitte, only 35 percent of customers are even willing to pay for shipping, and 18 percent of shoppers would refuse to purchase if delivery time was one week, double the percentage compared to two-day shipping.

2. Personalized Shopping Experiences Will Draw in More Customers

Personalization: Expect increasingly customized interactions between retailers and customers, from coupons tailored to consumers based on purchasing history or abandoned carts to an increase in retailers utilizing IoT (Internet of Things).

Bigger focus on loyalty programs: With retail giants like Amazon dominating the online landscape and Walmart dominating the physical landscape, smaller retailers will be looking for ways to differentiate themselves from their larger counterparts. A repeat customer typically spends 67 percent more than a first-time customer, so loyalty is incredibly valuable. Loyalty programs will continue to be a tried and true method in order to drive repeat business.

3. Mobile’s Importance Will Continue to Rise

Enabling mobile devices as key shopping tools: When 80 percent of internet users own a smartphone, you know they’re going to be using them to browse and shop online. Having a smooth mobile site is crucial to ensure that you can keep a customer’s attention. As we’ve mentioned before, mobile users turn to their smartphones and tablets as personal shopping assistants, whether researching an item or purchasing on the go. Expect that trend to continue and for retailers to focus even more on optimizing the mobile experience. Purchasing on the go can also lead to buying online and pickup in store, which can begin on a mobile device. We’ll talk more about this later on. Increasing 9 percent from 2015 to 2016, mobile usage influenced 37 percent of in-store sales, according to a study by Deloitte. The growth may be slowing over time, but the usage is stronger than ever.

Optimized promotions for mobile: Marketing emails are often opened on mobile devices and optimized accordingly, but purchases are still completed on desktop most of the time. Expect to see retailers invest more effort into allowing for a smooth transition from email to mobile-optimized sites where consumers can complete their purchase on the same device.

4. The fall of the Superstore

Niche targeting: Giant retailers will continue to move away from big-box stores and focus on opening small stores more focused on certain niches, such as downtown locations for the city-dwellers looking for a quick stop and shop. Target, for example, has opened up multiple City Targets specifically for these reasons. This shift will be driven by a focus on increasing the flexibility and accessibility of stores to cater to consumers.

Capturing the millennial mindset: “What the millennial generation wants, it gets,” is a generic observation as demographics have shifted. Indeed, millennials now make up the largest customer base. So, retailers will increasingly need to cater to them and adapt strategies to capture this crucial segment. In 2016 there was a decrease in brand loyalty, as millennials tended to move away from major retailers. It’s a generation that pays attention to where products come from and the origin of materials used to make them. They value transparency in corporate practices. A combination of these two factors will lead to an increase in specialized, often local shops that cater to such expectations.

5. Omni-Channel Experiences Will Improve

Online-to-physical transformation: Modern consumers currently have the ability to shop online yet pick up their purchase in person, allowing them to jump from mobile to physical. Most retailers so far have been struggling to properly execute this transition. Blurring the lines between online and offline is the next step, and Amazon is already leading the charge with “Amazon Go.” The test program involves a grocery store in Seattle where customers use their smartphones to enter the store, grab their items and simply walk out. This completely negates the checkout process, since customers are charged afterwards based on sophisticated image/spatial recognition technology.

Physical-to-online optimization: While Amazon is working on moving from online to physical, Walmart is bolstering its online presence. Last year Walmart acquired, which itself recently acquired These new additions to the Walmart tent greatly expand its online offerings and improve its positioning as a competitor against Amazon. Expect to see more historically brick-and-mortar retailers adopt similar acquisition strategies, in hopes of accelerating their online capabilities and subsequently improving their customer experience across channels.

6. The Line Between Brands and Retailers Will Get Blurrier

Brand protection: Brands are beginning to take more control of how they are perceived. Brands like Coach and Michael Kors are shying away from wholesale department stores in order to keep their consumers from continually getting discounts provided by department stores (which get blamed for lowering the brands’ value). Brands such as Nike that have their own stores are in complete control of how their products are presented, and they are more able to maintain their high brand equity. We foresee that more brands will gravitate towards stricter MAP enforcement policies to preserve their value and fend off gray market sellers as well.

Private label expansion: The shift from a purely symbiotic relationship between retailers and brands to a more complex, competitive one will come from both sides. It will be complicated by a rise in private label products, as retailers try to expand their reach and avoid working exclusively with brands.

We hope these predictions will help you plan your retail strategies for the next year and give you an edge over your competitors. We look forward to 2017, and we’re excited to see what the new year has in store.

Contributing Writer: Matt Chow

Min-Jee Hwang

Min-Jee is the former Director of Marketing at Wiser. She has extensive experience working with SaaS companies and holds a BA from Carnegie Mellon University and an MBA from NYU Stern.

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