3 Retail Trends Under the Radar in 2015
Recently, we read a post from Bob Phibbs, also known as the Retail Doctor, about his 7 retail industry trends for 2015. Bob actually mentions 22 trends in his full report, which you can download here.
We agreed with many of Bob’s predictions. Like him, we think Thanksgiving is becoming just another shopping day. For other trends, however, we have a different perspective. We were also surprised that some of the trends we expect to see in 2015 did not make his list.
Let’s start with a trend we agree with, but see even more opportunity than the Retail Doctor thinks.
“The Year of the Braggie”
Bob Phibbs says “Hotels are being encouraged to get travelers talking about their travels in a sort of you’re not here but I am brag to their social network. While the selfie involves taking a photo of one’s own self, the braggie involves uploading photos of travel perks and hotel accommodations within minutes of arrival so that friends and followers see what they’re missing out on – and what they might look forward to for their own future travels. (…) User-generated content is huge, and retail brands must stand ready to encourage and showcase such content. It is always better to have word of mouth talking in glowing terms at the start of an interaction, and not afterwards… based on potentially bad service.”
Our take is that mobile applications have enabled on-the-spot bragging for years, but enticing reviews from consumers has really only been done at the grassroots level. We agree with Bob Phibbs that 2015 is the year for large brands to start soliciting more feedback from consumers. For the travel industry, that might mean a prompt that appears on a boarding pass and requests feedback about the flight. For retailers and restaurants, there’s a great opportunity to reward customers who provide feedback, whether it’s with an upgrade, a free dessert or a discount on a future purchase. We think, however, there is a learning curve involved in soliciting feedback, particularly since consumers’ default can lean towards criticism instead of praise. The opportunity for brands to interact and use the ‘braggie’ to surprise and delight the customer in order to build loyalty can be particularly powerful, and that’s why we think it’s a trend that should be considered and adopted by retailers.
On the other hand, we have to disagree with Bob on this one:
“Mobile Payment Will Struggle”
The adoption of mobile payments technology has sped up with Apple Pay and CurrentC being two of the most prominent players in the news. Although we agree that mobile payment is still in its infancy in many ways, we believe mobile payments will begin to see accelerated growth in 2015 as more providers come on board. With the number of iPhone 6’s sold in the past few months, at the very least consumers will try it one time out of curiosity. The key to adoption will be that they find mobile payments convenient, and then we will see the rise of mobile payment, as customers continue paying with their devices.
There are also three trends that we see as becoming key in 2015:
- The Revenge of the Lower-End Consumer
The recovery has really been all about luxury retailers and the wealthy shopper. For the lower-income consumer, however, any gains in salary have been swallowed up by inflation, rising gas prices and healthcare costs. The drop in gas prices, however, will impact the lower-end consumer more than any other group. 2015 could be the revenge of the lower-end consumer, who will have extra money to spend. Retailers who appeal to them have cut inventory for years, and will now need to increase their inventory to meet the pent-up demand.
- Beacon Technology
The low-cost technology is still in its infancy in many ways, and only starting to be tested by retailers. LoyaltyOne wrote a great article last year about how beacons could be the next step toward customer personalization. If a retailer doesn’t develop a beacon technology strategy in 2015, they will simply be missing the boat. Beacons can be installed at little cost and provide great customer insights that can help increase loyalty and wallet share.
- Fashion: The Next Big Thing
It has been more than two years since the last big ‘must have’ fashion trend. Do you remember what it was? Let’s take you back to 2012 when colored denim was the ‘it’ item. It was the last time a trend had an impact on specialty retail sales. Retailers are hungry for the next big thing and after a fashion lull this long, this should be the year where the next ‘it’ item that must be in every wardrobe arrives, and consumers hungry for that next must-have item will be ready to spend.
Did we miss some trends? Disagree with us about the ones we called out or think there are others? Let us know in the comments section below.
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Rodney Davenport is Vice president, Corporate Affairs and Head of the Strategic Insights Group. Under his leadership, the team leverages qualitative and quantitative research and information to identify and understand the impact of economic, market, industry, regulatory, human capital and competitive activities on Alliance Data’s businesses and Company, enabling them to project key indicators and impact to the company.
Tom Colven is a Senior Strategic Insights Analyst at Alliance Data. In his role, he ensures leadership and associates are provided with timely industry, competitor, and market-related intelligence and analysis that supports and aligns with the company’s business decisions and growth.
