Retail in 2015: Make-or-break for Bitcoin but cross-border commerce goes crazyby
The retail sector has experienced a period of unprecedented change – and all the signs indicate that this innovation is set to continue throughout 2015.
Summarising how the industry has been developing, Alan Morris, executive chairman of Retail Assist, says: “The way people shop has changed more in the last 5 years than it has in the last 20. The age of online has revolutionised the way we shop and we have seen a progression from desktops through to laptops, mobile and tablets aiding our online shopping habits and forcing retailers to reinvent themselves in the digital age.”
With consumer spending continuing an upward trajectory - growing from £272bn to £278bn between close of Q2 2014 and 2015 – retailers understand the importance of keeping in step with consumers. And this is expected to lead to further innovations in the coming 12 months. So what retail trends will dominate the landscape in 2015?
The retail experience will be more important than ever
“The once separate worlds of retail and entertainment have firmly collided,” says Mike Bishop, MD of Rakuten.co.uk. “Consumers today want to buy into a brand experience which reflects their tastes, on and offline. To provide this experience retailers have diversified their offering, but this has often been in a siloed way with services existing separately. As we enter 2015, retailers are bringing these distinct offerings together under one branded roof, online and on the High Street. Not only will this empower retailers to deliver a better connected experience to consumers, but it will also unleash an enormous opportunity to cross-sell and strengthen consumer loyalty across the entire retail and entertainment ecosystem. ”
Click-and-collect will continue to grow in popularity
“This still holds massive scope for future developments,” says Morris. “Not only will the service become more popular, with a predicted 76% of online shoppers using the service by 2017, but will also help to shape and develop the High Street. This Christmas click-and-collect sales were estimated to reach highs of £3 billion, which is a 40% increase on last year. Additionally, retail consultancy firm Conlumino has predicted that each trip to collect click-and-collect purchases will result in a spontaneous spend of £27. With results like this and currently only two thirds of the top High Street retailers offering the service we expect this number to expand rapidly in 2015.”
Cross-border commerce will unleash a world of opportunity for retailers
“The growth of cross-border commerce looks set to accelerate in 2015 as the first truly global marketplaces launch, giving consumers the chance to buy from retailers anywhere in the world,” predicts Bishop. “This paves the way for merchants to access markets in other countries and expand their reach internationally. For retailers, entry into new markets through a global platform offers the opportunity for significant growth, particularly in smaller markets where there is less potential to grow internally.”
Retailers will start to monetise in-store advertising
"As the battle with online continues, forward-thinking bricks-and-mortar retailers will start to use their shop space to place in-store advertising based on data provided from retail analytics," suggests Adrian James, VP of Sales and UK managing director at Walkbase. "Selling advertising space based on audience data will allow brands to get closer to their end customers while allowing the retailer to maximise the value of their floorspace and potentially increase the basket size when a customer visits."
Contactless payment technology will have greater penetration
“Mobile phones used to do nothing more that send text messages and make calls, but the rise of the smartphone and advances in technology have changed all that, opening up many new ways to make payments and do your banking on the move,” notes Morris.
“Contactless payment technology is the future and account-to-account payments by mobile will soon be available to everyone. Currently most debit and credit cards require customers to enter a PIN to make a payment but already we are seeing that consumers can simply hold their card up to a reader for small value payments. This technology is also being integrated into mobile phones, such as Starbuck’s payment app where you can swipe your mobile phone across a card reader to pay for your items.”
2015 will be make-or-break time for crypto-currencies
“Payments have been a hotbed for retail innovation globally in 2014 and we can expect to see much more of this next year, however the biggest shift is likely to come in the consolidation of the plethora of payment methods now available to consumers. 2015 will be a make-or-break year for crypto-currencies, like Bitcoin, which have yet to make their presence felt in terms of transaction volume,” predicts Bishop.
“It will be the year in which we find out whether these currencies will survive, fulfilling the promise of a global currency, or fade away as legislation and security concerns limit consumer uptake. If crypto-currencies take off and gain widespread usage and acceptance, we will see substantial impact on international transactions – a massive step toward a truly global marketplace.”
‘Shoppable videos’ will emerge
“Video content which generates retail sales are already starting to emerge, and with further advancements such as embedded digital watermarks; it will mean that catalogues and televisions will be turned in to shops, allowing us to buy products with the click of a television remote or tap of a mobile device,” says Morris.
“When watching an advert on television you will be able to click on a model or characters outfit and be linked straight through to the relevant webpage where you can then purchase this item. This is a definite game changer in the world of retail technology, turning a marketing campaign in to an additional brand touch point.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.