The holidays used to represent the retail industry’s biggest moment of the year. But recently, thanks to Amazon’s dominance of the business news cycle and dour headlines of store closures and bankruptcies, retail’s profile has remained high year-round. Lurking behind the headlines are the defining indicators of retail’s evolution, which will come more clearly into focus during this holiday shopping season.
Here are the five things that will define Holiday 2017:
Holiday 2017 will be a turning point for stores: By Holiday 2018, we’ll look back at this holiday season as the time where the act of shopping within physical stores finally moved forward. The old face of the store is quickly being retired, and a new face is emerging. Early evidence that retail is crossing the chasm is already in place—Birkenstock and Barney’s partnered on a ‘pop-up box’ concept in NYC; Engelhorn brought a Tesla showroom into its Mannheim, Germany, flagship store; Nordstrom opened Nordstrom Local featuring wine and manicures but no merchandise, and Apple talks of ‘town squares’ where consumers gather to experiment with products. In ancient Greece, these were known as Agoras—places for the community to gather that also served as a marketplace.
This season, look for more retailers to focus on attracting consumers not just shoppers. This will be especially important for specialty retailers. One example: Nespresso and its new ‘immersive coffee experience’—with a connection to a sub-culture or particular social group.
More Orders without Checkouts: Retailers and brands will continue to invest in technologies to drive sales, like mobile, AI [artificial intelligence] and social media, but this holiday we expect to see them invest in initiatives that “flatten” the shopper’s journey by merging steps together. What does that mean? Online shoppers can now buy merchandise from a product detail page (PDP) without having to tap their way to the checkout page. That’s thanks in large part to integrated mobile payments like Apple Pay and Android Pay. In fact, Apple reports that the number of Apple Pay users is growing by one million per week. On retail sites that have Apple Pay available throughout the journey (including PDP, shopping cart and checkout) we at Salesforce Commerce Cloud expect 7-10% of iPhone orders will flow through Apple Pay this holiday.
Influencers will influence far more shoppers: Social platforms are already driving REAL traffic to retail sites—5% of all mobile traffic comes from social according to the latest Shopping Index—we expect to see that rise to 7% this holiday season, which suddenly represents a top 5 traffic source for retailers. Much of that traffic will be paid social, and some organic brand social.
A rising share of social traffic contribution will come from influencers, both well-known celebrities and micro-influencers. Retailers and brands are investing in management of programs to cultivate and leverage these influencers like never before, attracting consumers from the major social properties and pulling them to their sites. At the same time, though, this trend will place on shoppers the burden of distinguishing between authenticity and sponsorship while scrolling through the social/influencer landscape.
Mobile will soar to new heights as AI becomes a huge sales driver: Mobile traffic to retail sites will soar to 60% across the globe this shopping season, and orders placed on phones will approach 40% on some typically high-mobile days (Christmas Eve, Christmas Day and Boxing Day). Shoppers that engage with AI-based personalization will account for nearly one-third of all digital commerce revenue during the season. As retailers integrate AI ‘beyond the box’ of the product detail page and into more impactful areas like category pages, personalized landing pages and even site search results, shoppers will come to rely more on product recommendations over older “findability” techniques like navigation.
Click and collect will boost the season’s slowest shopping days: Sixty percent of shoppers aged 25-44 are already interested in using click and collect (for more on shopper preferences, check out the ‘Shopper-First Retail’ report), and as more retailers ramp up their efforts to offer it more broadly, usage will certainly increase. This trend towards click and collect could change the dynamics of the digital shopping season; typically, December 20-24th are the weakest digital shopping days of the season. If shoppers have an expanded window in which to buy online and still receive the order prior to Christmas, those lighter end of season days could very well see a sales bump.
While some trends are easier to predict than others (cough, cough, mobile, cough), the season almost always brings some surprises. One certainty in retail is that the shopper-first initiatives, those which focus on making it easy on the shopper to buy, will lead to success.
Salesforce Commerce Cloud provides the e-commerce technology used by 80 of the Top 1000 online retailers in North America.