Look around. What do you see?
Is it a world progressively moving toward digitalization?
Sure seems like it. But do the numbers confirm that?
Every seemingly ordinary task is now intertwined with technology in some way. Even shopping.
And the retail industry is rapidly adopting technology in efforts to meet customers’ preferences because the stakes are high.
Look at these retail statistics:
Retail is the type of trade where firms offer goods and services directly to customers, usually through multiple channels of distribution.
The term “retail,” as explained in Wikipedia, applies to a transaction where a seller fulfills orders from a large number of buyers. In retail, the buyers are also usually the end-users.
The retail industry has a great influence on the economic well-being and is often an early indicator of where we’re headed in terms of prosperity.
The Bureau of Economic Analysis is responsible for gathering information and, well, analyzing the important economic indicators.
Compiling statistics on retail sales is an important aspect of the work of the Bureau. Retail sales predict consumer spending trends. And consumer spending trends can, in turn, predict economic growth.
Well, the gross domestic product (GDP) is the primary indicator of economic growth. The thing is, the report on the GDP comes out quarterly.
On the other hand, data retail statistics come out monthly and while it doesn’t take inflation into account, it can still be used to assess the economic state.
The reason for that is the strong correlation between the retail industry and the economy in general. Consumers spending more means companies are earning more. This, in turn, means they can hire more people and pay them better. Or in other words – we’re doing well economically.
Retail sales statistics are clear:
(Source: The Balance)
The number shows the sales volume that exceeds the pre-recession high of $4.4 trillion spent in 2007.
Not only that, but the global retail industry revenue is expected to keep rising in the next few years.
In 2017, the volume of retail spending worldwide was at $23 trillion, which implies the industry will keep growing.
People will always need to buy new things. Still, retail has such an important role because it manages to successfully adapt to consumers’ needs.
Digitalization, in particular, will change the face of the retail trade industry in the years to come.
Are we going to witness a clash between online and in-store retail shopping?
Sales from online retail stores are steadily rising. Back in 2014, this global market’s value amounted to $1.34 trillion. In 2018, it was already $2.84 trillion.
In 2020, it’s forecast that the revenue will cross $4 trillion. By 2021, it’s expected to reach $4.88 trillion.
Even though online shopping keeps breaking records, physical stores remain an important part of shopping. And retail stats further confirm that.
The buyer’s journey involves research that spans across several phases.
We’ve all done it – going on our phones to look up an item that caught our interest.
Then comparing its price and quality with something similar.
After we’ve finally made up our minds that we’re definitely buying it – we add it to our online shopping cart – only to go to a retail store to actually try and buy it.
In case you didn’t know – it’s not just you. It’s how everyone buys stuff nowadays. And here are a few retail industry facts to back this up.
(Harvard Business Review)
Yup, it’s definitely not just you.
Salesforce and Google also weigh in with some retail statistics on the buyer’s journey.
These days we can’t help but turn to our phones for research – statistics show that clearly.
( Think with Google)
The retail industry needs to get comfortable with a customer journey that largely happens on people’s phones.
Now, all retail demographic groups prefer to “touch and feel” what they’re purchasing. That said:
Some argue that retail in its traditional brick and mortar ways is soon to be obsolete.
So, is retail dying?
The fuss around the “end of days for retail” is greatly exaggerated. It all comes down to businesses adapting to the changes, so they can serve their customers better.
And when brands are not able to do that – well, then we see some retailers going out of business. Blockbuster has been one example from the past years and this year’s news of Barney’s end is another.
Still, the answer to the question is no. Retail is not dying.
These examples are exceptions. The retailing sector generally shows great flexibility when it comes to embracing consumer trends.
According to an IHL Group report – for every company closing stores, there are 5.2 others opening new ones.
Census Bureau retail shopping statistics indicate that:
(Source: National Retail Federation – NRF)
And, surprisingly, the rise was driven by smaller stores.
It’s good to be a small retail business. The ones with less than 5 employees increased with the impressive 4,569 stores in the first quarter of 2018, compared with the same period in 2017.
Sales statistics for 2018 show a net increase in retail stores in the US.
So, retail stores are definitely not going away.
Especially considering retail sales data is showing:
(Source: Retail Dive)
That being said, retail is a dynamic and highly competitive industry – and no one is guaranteed success.
The retail market trend demonstrates the influence of digitalization but also the weight consumers’ expectations have on the sector.
Monitoring the evolving consumer behavior helps brands to stay afloat.
Retails sales stats tell us that customers want to have options when it comes to shopping. Even if in the end they prefer to go to a physical store.
Convenience is the key. Which is why you might want to invest in improving the in-store experience. That way, you’ll make sure you can deal with the constantly growing buyers’ demands.
Virtual experience is one of those new trends that customers gladly welcome.
(Source: National Retail Federation – NRF)
Innovations like augmented reality, in-store navigation, and smart dressing rooms contribute to more engaging customers’ experience.
The automated payment system is another enhancement that attracts customers, according to retail statistics. And, to top it off, self-checkout and mobile payments also add to a satisfying buying experience.
And while such technologies are not cheap, investments in that direction are paying off.
Buyers welcome solutions that make for convenient and fast browsing and buying.
In its Summer 2019 Consumer View, the NRF found that:
Faster and easier to do – what’s not to like?
Retail stats mobile payments were even more appreciated as:
Those two aspects of the shopping journey are a must for an optimized customer experience.
Cutting down the time for research at the pre-purchase phase also needs to be part of the retailers’ priorities. After all, the easier you make it for your clients to reach the buying phase – the higher your sales will be.
Taking the guesswork from your customer’s purchase experience gives you a head start.
Like it gave some of the top retailers in 2018.
In 2017, the US was the driving force in the retail industry. It had 7 retail chains in the top 10 largest retailers, according to Deloitte’s report- Global Powers of Retailing.
However, a ranking published in NRF’s magazine Stores showed only 3 US-based companies made it in the top 10 largest retailers in 2018.
Amazon follows with a revenue of $164.1 billion. And while it’s ranked second in total global revenue, Amazon remains the largest online retailer in 2019. The third-largest is Schwarz Group with $101.94 billion in revenue for 2018.
These companies have been able to successfully adapt to retails trends and provide customers what they need.
Amazon showcases that perfectly with its Amazon Go stores.
Amazon’s physical shops offer buyers the familiarity of in-store purchases and some of the convenience of online shopping experience. No checkout lines or any cash exchange.
The stores don’t even have a single employee. Everything is managed with artificial intelligence and payments are automatically made from the customers’ Amazon accounts.
While there are still debates around whether the stores should be adopted widely, we can’t deny the company is on the right road to customer satisfaction town.
The future of retail stores is intertwined with technology and a convenient shopping experience.
Gartner’s predicts that:
Not only will enterprises turn to AI to help them with customer demands – we’ll see research efforts concentrating on clients’ experience as well.
Knowing your customers is important. So much so that almost half of all research projects will concentrate on finding the key to consumers’ hearts.
The future of retail is an omnichannel, holistic shopping experience done fast.
Experts expect that 2020 will be the year of everything fast. Same-day deliveries will set the new standard.
And retailers will feel the push to optimize their strategies and look for opportunities to invest in technology.
But we shouldn’t forget that customers are at the center of everything and dedicating resources for building loyalty is a greater priority.
Consumer statistics indicate that retailers will need to take steps toward:
Brands are being challenged to personalize retail customer experience like never before. Targeting groups of customers through mass emails or other mass marketing campaigns don’t make the cut.
Today it’s all about the customers and retailers are stepping up their game.
Companies have to aggregate customer data through multiple marketing channels and analyze the information to help them profile their customers.
Refining each customer’s profile will help provide value based on individuals preferences.
Those two are no-brainers. Customers want things fast and they’re demanding retailers race to get their attention. To do that, take the steps we already mentioned. This will ensure an efficient and transparent shopping journey, which will keep customers interested.
By now, this word should be a mantra for the retail market. After all, even the implementation of technology in the retail industry serves the purpose of creating convenient shopping. No matter the changes the sector faces, this will remain the biggest driver of brands’ success.
Identity theft is a serious issue and securing all personal data in the best possible way is paramount.
Facial-recognition software, for example, holds boundless potential and is already being introduced successfully around the globe.
Nevertheless, retailers boost their sales if they implement measures to protect customers’ privacy.
Whether online or offline, content is king.
But we should clarify that is only when it’s timely and relevant.
Simply having a cool technology is a waste if it doesn’t connect the consumer to useful information.
Retail statistics say it clearly – customers want to have it all. They’re not saying goodbye to good old mall shopping, but they still want their shopping experience to evolve.
Combine the comfort of familiarity with emerging technologies and you’ll find your business more profitable than ever.