For all the colossal change the retail industry has undergone in recent years, the retail revolution is only getting started, according to Dana Telsey, CEO and Chief Research Officer at Telsey Advisory Group (TAG).
Thanks to changing consumer behavior and the new ways of purchasing, retail sales are continuing to grow, Telsey said at recent Grow Live events in New York and Los Angeles.
With consumer confidence at a high, brands and retailers need to give consumers a reason to spend.
Millennial spending habits
Disposable income is the highest it’s ever been with the emergence of the millennial generation, both from inheritance from the baby boomer generation as well as the changing buying behavior, Telsey explains.
Where are millennials spending their money? According to Telsey, categories such as healthcare, wellness, and recreation, along with the experiential purchases, have seen a monumental increase over the past few years. Whether it’s a meal kit service like Blue Apron or wellness service like Drybar and Barry’s Bootcamp, Generation Z is spending more money on looking and feeling better.
Rise of “ization”
Another major trend retailers can anticipate is the rise of “ization.” Retailers need to prioritize personalization, localization and customization to meet the needs of the changing consumer. Convenience and experiences remain the key driver in this changing environment as mobile experiences continue to emerge as a vital strategy for retailers, Telsey said.
Tomorrow’s consumers are not only looking for experiences in their purchases but also their shopping. To entice the millennial generation, retailers need to develop new products. In many cases that means developing products online before moving them into stores. Bringing the online world to a tangible and physical store will deem very profitable for retailers ready to make that change. Brands like Hammitt and Outdoor Voices have successfully blended the online to offline trend through physical events and buy online and pick up in store.
Blurred line between digital and physical
Moving forward we can expect to see more of a blurred line between online and offline, Telsey shares. Consumers are expecting their digital experience to be both easy and efficient, but also expect those same characteristics in the physical aspect of retail as well. If companies can’t produce an enticing and pleasing physical experience, consumers will look elsewhere.
The health and beauty industry, for one, can expect continued growth, according to Telsey. Due to the rise of influencers and Instagram, the cosmetics and skincare industries have seen a nine percent growth. More specifically, the beauty industry has seen tremendous growth with daily emerging products daily.
Innovation and speed
When it comes down to it, Telsey says it’s all about innovation and speed.
“Speed of delivery to the customer and speed of product development to the shelves or website,” she said. “If you don’t have speed you can’t manage inventory properly.”
Without the proper insight into the health of your business, your future as a retailer will look vastly different than those retailers that continue to innovate themselves and their products.
Learn how NetSuite helps retailers prepare for the latest trends.
Source of the blog: NetSuite blog