5 Disruptive Retail Trends to Watch in 2016

To adapt to constantly evolving consumer demand in 2016, the retail and consumer goods sectors will continue to face disruption from consumer and competitive trends. The most successful companies within these sectors will invest in enhancing customer experience and adding unique value in pursuit of happy, loyal customers and enduring brand trust.

Based on my experience with retailers, manufacturers, and technology consultants, I predict the following 5 trends will disrupt the retail sector in 2016:

1. Cutting-edge technology:
   To enhance customers’ shopping experience and share relevant information with them, retailers will increasingly embrace innovative technology. For instance, Starbucks offers Apple Pay and Bloomingdales offers Google Wallet, services that allow shoppers to tap their mobile phones to pay and collect loyalty points. In addition, Apple’s location-aware iBeacon technology allows retailers to send coupons, targeted messaging, and sales items to nearby customers’ mobile phones. More retailers will adopt these technologies to enhance the customer experience with superior convenience and speed.
2. Local products:
   To simplify supply chain management, cut transportation costs, save time, and support regional prosperity, retailers will source products from more local manufacturers. For instance, in the grocery channel where freshness is the most critical success factor, a February 2015 Forbes article notes, “thanks to customer demand, using locally sourced fare is something that most … grocery stores can’t ignore.”¹Field, Anne. An Easy Way to Buy Local Food. Forbes. February 25, 2015. The compelling rationale for “buy local” programs will gain strength among both businesses and consumers.
3. Sustainability:
   To improve the shopping experience by making customers feel good for contributing to worthwhile causes, more retailers and manufacturers will demonstrate leadership in sustainability and corporate social responsibility. These practices involve a voluntary corporate commitment to legal and ethical best practices, and environmental friendliness. According to Nielsen, 55 percent of people around the globe are prepared to pay more for green products. To adapt to growing demand for green products, Target introduced “Made to Matter – Handpicked by Target,” a new collection of 16 leading natural, organic and sustainable brands.²Gettler, Leon. Green MashUP: 7 trends transforming retail sustainability. TheFifthEstate.com.au. February 17, 2015. In addition, Walmart’s ecommerce site now labels 3000 products, made by more than 100 companies, with a badge that reads “Made by a Sustainability Leader.”³Winston, Andrew. Can Walmart Get Us to Buy Sustainable Products? Harvard Business Review. February 24, 2015.
4. Omni-channel personalization:
   To deliver a consistent, seamless shopping experience regardless of channel retailers and manufacturers will respect customer data and social media. These business necessities help companies truly know and engage their customers. Data-driven, social companies understand the unique wants of a specific individual (vs. a more generic shopper profile or persona) and how to deliver value online and offline. For instance, Kroger has earned billions from its personalized coupon program. The retailer determines which products an individual customer actually wants to buy, then sends them customized digital coupons for several of those products.⁴McClearn, Matthew. Big Data is Changing Grocery. Marketing Magazine. June 19, 2015.
5. Transparency:
   To boost brand trust and consumer confidence, manufacturers will increasingly collaborate with retailers to share accurate, up-to-date product data so consumers know exactly what they’re buying. Consumers are increasingly savvy shoppers who demand safe products and more detailed product information, including allergens and organic certification. This trend toward more open communication prompted German discount retailer Aldi Süd to voluntarily announce in 2015 it will indicate the presence of any animal ingredients ‘hidden’ in its private brand food products to demonstrate public accountability and information-sharing.⁵Planet Retail. Aldi Sud voluntarily flags ‘hidden’ ingredients. May 6, 2015

To serve shoppers better in 2016, retailers and manufacturers alike will strategically adapt their business practices to be increasingly customer-centric. Specifically, they will invest in innovative retail technology, participate in more “buy local” programs, commit to corporate social responsibility, personalize service across all channels and demonstrate greater transparency.

What other disruptive retail trends do you predict for 2016?

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