A 57-year-old family-owned luxury clothing retailer in Westport, Conn., unveiled a new technology initiative in its spring catalog enclosed in the New York Times this weekend: “the launch of our new online shopping site, now a fully integrated component of how we run our stores and our business.”
E-commerce, at last! Welcome to the 21st century, Mitchells. Now here are some other new technologies to keep your eyes on: Drone delivery, virtual reality shopping, and mobile payment systems.
A new survey of more than 1,400 U.S. consumers conducted by retail communications agency WalkerSands reveals “what consumers want in an omni-channel shopping experience and how retailers can use technology to increase sales in 2015 and beyond.” If you’re just getting around to e-commerce, you might need to do some catching up.
According to the agency’s second annual Future of Retail Study, the industry is set to be transformed by the “rapid rise of mobile commerce, introduction of Apple Pay, and same-day shipping experiments with drones and couriers.” Retailers have also been “shaken up by point-of-sale hacking scandals, marketplace Alibaba’s massive initial public offering, and the evolution of Black Friday from one day of deals into its own promotional season.”
The takeaway: “Technology has forever changed consumer shopping habits” and “continues to shape the future of retail.”
Here are three ways WalkerSands says retailers can keep up with consumer shopping demands.
1. Make online shopping a stellar experience. Asked “how often do you shop online?” precisely zero survey respondents told WalkerSands “never,” and 68 percent said they shop online more than once a month. “Online shopping has become so commonplace that retailers have to make the experience as easy and convenient as possible if they want to continue growing their e-commerce revenue,” the agency says. “With consumers shopping online more frequently and spending more across an increasing number of product categories, retailers that remove as much friction from the online shopping experience as possible will capture the most additional sales.”
One way Mitchells is stepping up the level of online service for its customers: personal style advisors who can view customers’ virtual closets to make recommendations online and in-store. Another thing the store got right? Free shipping. Eighty-three percent of Future of Retail survey respondents said free shipping, followed by free returns, make them more likely to shop online.
2. Make paying secure and flexible. For in-store purchases, 40 percent of consumers say they’ve used a mobile payment app in the past year. That’s up from just 8 percent in 2013. Google Wallet and banking payment apps such as Chase QuickPay are most popular, followed by retailer payment apps such as Starbucks’. Only 4 percent of respondents had tried out Apple Pay. And, of course, the majority of respondents had not yet used any mobile payment technology. More than half said they have security concerns and nearly half cited privacy concerns.
While 56 percent still consider cash the most secure payment method, 59 percent of respondents admitted to carrying less than $20 in their wallet at the time of the survey. “With cash on the decline and hacking scandals eroding trust in traditional point-of-sale systems, retailers who embrace mobile payments and convince consumers it’s a safe way to make a purchase might be able to offer the best of both worlds,” reports WalkerSands.
3. Don’t doubt the drones. WalkerSands’ data suggests that even if technology like drones and virtual reality seems futuristic to retailers, “consumers expect them to shape their e-commerce experience in the not-too-distant future.” In fact, 88 percent of consumers said they would trust a drone to make a delivery, 77 percent would be willing to pay for one-hour drone delivery, and 66 percent expect to get their first drone delivered package within 5 years.
Virtual reality is another potentially transformative tech for retail. With the ability to don a 3D headset in order to virtually try on clothing at their computers, shoppers will have one less reason to go to a brick-and-mortar store. “Virtual reality has the potential to increase e-commerce revenue, but it may further hurt brick-and-mortar sales,” according to WalkerSands. “Twenty-two percent of consumers say they will be lesslikely to visit a physical store with the introduction of thistechnology."
WalkerSands’ conclusion: “Retailers should think about how emerging technology might fit into their overall strategies, while also realizing that untested tech may turn out to be nothing more than hype in the end.”