Do you still feel the need to go into a store to checkout a product in person before purchasing? According to Invesp, 78% of online shoppers don’t look at a product in a store before buying it online.
Buyer behavior has shifted with free shipping, convenient free returns, sizing tools, and more. This shift has led to a change in the retail climate which will allow some retailers to flourish and others to perish. The National Retail Federation has stated, “online and nonstore (catalogs, etc.) sales are projected to nearly triple the year-over-year growth rate for the entire retail industry in 2017”
The US Economy
It has been almost 10 years since the 2008 recession. The United States economy is building back to where it was and so are consumers with how they spend. During the recession, many Americans halted their spending, cut “fat” in their budgets, and only purchased items on sale or with a coupon.
These habits have continued the last few years, so much so that most shoppers no longer buy full-priced items.Think about the last time you saw something you needed or wanted to buy. Did you dig through your email to see if you had a coupon code? As the economy builds, however, consumers will become more confident in their spending and spend more.
Meeting Consumer Needs
With the retail landscape changing from brick and mortar stores to some online business to a lot of online business, retailers either evolve or go extinct (a little Darwinian metaphor, for you). In the last year, we have seen big stores such as Wet Seal and American Apparel file for bankruptcy. Matthew Shay, CEO of the National Retail Federation, says “The business model has to evolve quickly to meet the needs of consumers. […] When there’s that level of volatility, you’re going to see businesses that aren’t going to remain competitive and new businesses emerge.”
New Business Models
Not only are consumers shopping more online than in-stores, but they are open to new online shopping experiences. There are now flash sale commerce sites like Zuilliy or more of a sharing model like Rent the Runway. Even more exciting is the rise of monthly subscription services such as Trunk Club, Stitch, Fix, Birchbox, and Hello Fresh.No longer do you need to go to your long-standing department store to find clothes in your style and size, you can have items shipped directly to your house with free returns.
Why do go to your local makeup store to try our new beauty products when you get 5 testers a month? And grocery shopping? Forget it. Your dinner is now shipped directly to your house with easy to follow recipes and all the ingredients you need. The personalized and convenient service these new business models create add another level to the online shopping competition.
Staying up to date with shopper trends and habits will help you build an organization that evolves with the market. Knowing what and how your customers want their products will give you the competitive advantage over other retailers in the same space.